PURA Wants to Penalize CL&P for 'Deficient' Response to 2011 Storms

In its final decision regarding the utilities' power restoration efforts following Tropical Storm Irene in Aug. 2011 and freak fall snow storm Alfred in Oct. 2011, the state Public Utilities Regulatory Authority (PURA) has affirmed that Connecticut Light & Power Company's response to the subsequent widespread outages was "deficient and inadequate" and therefore may reduce the utility company's allowed return on equity at its next ratemaking proceeding.

PURA — formerly known as the Department of Public Utility Control (DPUC) before it merged with the Department of Environmental Protection to form the Department of Energy & Environmental Protection (DEEP) last year — is calling for a to-be-determined partial reduction in CL&P's next rate increase as a "penalty for poor management performance and to provide incentives for improvement," according to a DEEP press release. In addition it recommends that any request on behalf of the utility for reimbursement of storm related costs be reduced.

As of present CL&P has no rate requests pending and has not submitted any requests for recovery of storm-related costs.

Perhaps more important, PURA is asking CL&P to establish a “heightened state of readiness” in preparation for future storms and to take steps such as more aggressive tree trimming, increasing communications and securing additional mutual assistance. The regulatory body has also asked CL&P to submit, on a periodic basis, a detailed plan showing that it has adequate line and tree crews in place in order to respond to major storm events. Future rate increases should be based on the utility's "readiness," the PURA report states.

Overall CL&P must take "concrete, measurable steps to embrace the need for aggressive, extensive restructuring of both its attitude toward storm management and establishment of new practices for execution of future storm response,” states the final report, released Aug. 1. PURA released a draft report on July 17.

PURA asks CL&P to "develop a heightened state of readiness, and document that such a state exists, including assessment of the company’s own line workers, line workers from sister companies, contractors, a statement of the mutual aid assistance organizations to which the company belongs, and the resources likely available from those organizations."

"Such heightened readiness will focus on resources likely to be available during the first 48 hours of a major storm event to assist in efforts to ensure public safety," the report states.

In developing its 26 Orders, some of which apply specifically to other utilities, including telecommunications, PURA considered testimony gathered through numerous public hearings, as well as the conclusions of three previously-completed reports analyzing the storm response from different perspectives: a report from public safety and crisis management consulting firm Witt Associates; the findings of Gov. Dannel Malloy's "Two Storm Panel;" and a report from Liberty Consulting Group commissioned by PURA.

Berlin-based CL&P has reportedly taken steps to improve emergency response procedures, including appointing a new head of emergency preparedness and beefing up its tree trimming budget.

“It’s important to point out CL&P has already taken several steps to improve our emergency response procedures, as we recently demonstrated in the four-day statewide preparedness drill where we received positive feedback from state and local officials," said company spokesman Mitch Gross. "We continue to make significant upgrades to our system and improvements to our Emergency Response Plan that will have a positive impact on our ability to restore power in future storms.”

PURA's final decision (see attached PDF) does not appear to reflect over how repair crews prioritize power restoration efforts, although their testimony was included in the report itself. Rather than micro-manage utility company operations, the state appears to prefer a punitive approach to incentivising improved power restoration efforts.

In a statement released Aug. 1, Connecticut Attorney General George Jepsen said “The intent of this review was not just to point out the obvious – that CL&P failed to meet its public service obligations in the wake of these storms – but also to hold the company accountable for its failings and lay the foundation for future improvement so that these failures never happen again.

"This decision provides strong incentives for CL&P to make the management changes necessary to improve its storm preparedness and response the next time that Connecticut endures a major storm and to take steps to address issues like tree trimming, communication and securing mutual assistance," Jepsen wrote. "It also lays groundwork to seek additional rate benefits in the future in light of the inadequate response and its consequences."

[This article was updated at 5:08 p.m. to include a quote from Connecticut Light & Power Spokesman Mitch Gross.]