Connecticut General Assembly Considers Measures to Rein in Lavish Spending of CMEEC

by | Jan 27, 2017

Leaders of local municipally owned utilities are expressing strong opposition to a bill (SB No. 79) proposed by state Senator Heather Somers ( R-Groton) on January 12, that effectively would eliminate the Connecticut Municipal Electric Energy Cooperative, The Day of New London, Connecticut, reported on January 25.

The measure was introduced in the wake of the coop staff’s lavish trips to the Kentucky Derby for the past four years – billed as “strategic retreats – and the oversight and ethical issues that the trips have raised. The trips collectively have cost $1.02 million for dozens of participants, including CMEEC board members, staff, family members, and municipal leaders throughout the region, according to the local news outlet.

Somers has submitted two companion bills that have been referred to the legislature’s Joint Committee on Energy and Technology: one that would repeal Chapter 101a of the General Statutes — the law that created CMEEC — and a second bill that would allow municipal electric utilities to create “joint purchasing agencies.”

She said on January 25 that she expected opposition to her bill, the local news outlet said, but she defended the proposal in reaction to continuing news reports of CMEEC’s lavish and excessive spending, as well as its failure to provide detailed financial reports on its profits and excessive spending.

“CMEEC was created under Connecticut General Statutes and was intended to serve a public purpose to provide the most low-cost and reliable source of power to its members,” Somers said. “Every day we learn of more excessive spending and missteps. They’re an institution that has absolutely lost its way.”

Somers’ two bills are among four submitted for the new General Assembly session that relate to the embattled electric energy cooperative, owned by six member municipally owned utilities in the state, including Norwich Public Utilities, Jewett City Utilities and Groton Utilities, which also owns Bozrah Light & Power.

Several Norwich-area legislators have proposed a bill (SB No. 4) mandating that CMEEC follow state Freedom of Information laws regarding posting of meeting agendas, minutes, financial information and business conducted.

And a fourth bill (HB No. 5234) would require CMEEC “to provide detailed disclosure and itemization of all expenses for which the municipal electric utilities will be responsible.”

Six ethics complaints are being investigated in Norwich and one in Groton City against municipal officials who attended the trips, the newspaper said.

While state legislation created CMEEC, and the member utilities own the cooperative, there has been little to no regulation of the entity, and state utility regulators have no authority over the cooperative or its members, state officials have said.

The FBI in late October launched an unspecified investigation into CMEEC and its member utilities, The Day stated that officials at the utilities have confirmed.

Somers said she contacted the state Attorney General’s Office this week to ask for an inquiry into CMEEC’s actions and financial practices. She specifically asked that the office examine the CMEEC Margin Fund, defined by CMEEC officials as the source of the Kentucky Derby trip. The fund contains revenues from electricity sales to nonmember entities and management fees CMEEC receives from the Metropolitan District Commission.

“I urged them to look at this margin fund,” Somers said. “If they’re a nonprofit, why do they have this margin fund? The mission is to serve the ratepayers and the citizens.”

She also objected that CMEEC is paying for the attorney to represent four Norwich board members and three Groton board members in ethics complaints filed against their participation in the Derby trips.

Leaders of Groton and Norwich utilities told the newspaper that they plan to speak strongly against any legislative action that would eliminate CMEEC and will instruct their Hartford lobbyists to track the bills.

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