More often than not, public officials earn greater political mileage out of stirring up a public frenzy than they do for whatever results from their calls to action.
Back in late 2011, everyone from Attorney General George Jepsen and U.S. Sen. Richard Blumenthal to Gov. Dannel P. Malloy were racking up political points for boisterously calling for the public lynching of Berlin electric utility Connecticut Light & Power. The company just had its second major power outage in two months — leaving more than 675,000 customers without electricity, some for up to 11 days — and bungled its communication with the public, repeatedly missing projected restoration deadlines.
After the politicians’ frenzy successfully deflected public criticism away from their own shortcomings — most notably the failure to clear roads of debris so CL&P crews could restore power — the focus changed to how much CL&P should pay for what was deemed an inadequate and deficient response to the outages. Huge numbers were tossed around, some calling for a fine as high as half of CL&P’s total restoration costs, possibly leading to a penalty of $143 million.
CL&P slyly waited three years to ask for a distribution rate increase, which was the first opportunity the Public Utilities Regulatory Authority had to level any kind of penalty for those 2011 storms. The preliminary verdict was rendered last week: CL&P will suffer a $4.4 million loss in its revenues.
That wasn’t quite the fine public officials were demanding. Now, however, that penalty appears to be a footnote in the latest frenzy Blumenthal & Co. are stirring up in the CL&P rate case. In advance of PURA’s Dec. 17 ruling on its preliminary findings, the politicians’ focus is more on CL&P’s profit margin — which PURA actually reduced — and the raising of the basic connection-service fee.
Of course, the CL&P beancounters would tell you the company is losing more than $4.4 million as a result of the 2011 outages. Back in 2012, the company agreed to forego $40 million in restoration costs in exchange for getting state regulatory approval of the $5 billion merger of its Hartford parent Northeast Utilities with Boston-based NStar.
Whether we count the fine as $4.4 million or $44.4 million — both of which would seem low to Connecticut residents who sat in the cold and dark for more than a week in November 2011 — the real penalty was never about the fine. CL&P’s true punishment was the public outcry and subsequent hit to its reputation.
Utility companies are never going to be beloved. They will certainly never achieve the elite status of an Apple or a Google, but CL&P lost something more in the aftermath of those outages. Orange electric utility United Illuminating isn’t beloved either, but its regulatory requests don’t stir up near the outrage as those of CL&P. What CL&P lost in those storms is the benefit of the doubt — not just from politicians but customers as well.
Meanwhile, even though PURA slashed CL&Ps requested $221 million rate increase request by more than 40 percent, Blumenthal, Jepsen and others are still out there railing against the idea that CL&P would get any increase at all, earning all the political points they can muster.
