Gov. M. Jodi Rell said today she wants to expand the investigation into allegations the operator of New England’s power grid wrongfully paid power companies nearly $86 million in ratepayer funds for energy they never produced or intended to supply.
The state Department of Public Utility Control, at the governor’s request, lodged a formal complaint with federal energy regulators. Rell is also asking the U.S. Department of Justice to examine whether any criminal activity was associated with the case.
Monday, Attorney General Richard Blumenthal announced that he has launched an antitrust investigation into ISO-New England’s power grid and some power generators, alleging they swindled consumers out of almost $86 million. Of that amount, $20 million was from Connecticut ratepayers.
Blumenthal said the generators failed to provide “a watt of power” despite being paid under a federal rule that calls for them to supply the region with electricity when requested by ISO-New England, which runs the grid.
He said the generators have received $85.8 million since 2006, but failed to provide any power when asked on 108 separate occasions. Most of those requests came during peak demand and had to be met from other generators, leading to duplicated costs to consumers.
“Ratepayers in Connecticut and the rest of New England have been taken for a ride,” Rell said. “ISO-New England made costly deals with New York power companies, paying them $85.8 million over two years just to be on stand-by in case we needed extra electricity. But the companies never provided any extra electricity.
Rell’s complaint asks the Federal Energy Regulatory Commission to order the full repayment of the $85.8 million, of which about $23 million is due to Connecticut ratepayers, as well as possible penalties and interest. It also asks FERC to eliminate the current market monitoring system at ISO-New England and replace it with an independent, third-party monitor so this situation can never be repeated.
Rell is also asking U.S. Attorney General Eric Holder to investigate the possibility that the stand-by contracts were deliberately structured to ensure payments to the power companies with little or no risk that they would actually be asked to supply electricity.
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