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Penalize Power Companies for Outages: Panel Report

HARTFORD, Conn. – Connecticut utilities should be fined or prohibited from implementing rate hikes if they don’t meet “reasonable performance standards” during prolonged, widespread, storm-related power outages, the state’s Two Storm Panel recommends in its final report approved Monday.

The panel says the standards should be similar to those of states such as Massachusetts, Maryland, California, Illinois and the state of Washington that penalize power companies when they fail to meet standards approved by their state legislatures. The standards would be established by a panel appointed by Connecticut’s Public Utility Regulatory Authority.

In addition, newly elected mayors and first selectmen, as well as key state officials, must be trained in emergency and disaster preparedness within 45 days of taking office, according to the report.

Those are among 82 recommendations included in a 39-page report by the panel, appointed by Gov. Dannel P. Malloy after Hurricane Irene knocked out power to a record number of Connecticut Light & Power Co. and United Illuminating households in late August.

Malloy expanded the panel’s scope after the historic October nor’easter resulted in even more power outages – a record 809,000 – to CL&P households, and additional outages to UI customers.

“This key is accountability. There has to be official state-sanctioned standards the utility companies must meet that are tied to financial consequences,” Two-Storm Panel Co-Chairman Joseph McGee said Monday.

“We found that the utility companies, particularly CL&P, were severely lacking in both management and performance standards and it showed during extensive and prolonged power outages during both storms,” said McGee, vice president of the Business Council of Fairfield County. “That is not acceptable, and following a national trend, there must reasonable state standards established.”

Former CL&P President and CEO Jeff Butler resigned after being criticized for the company’s extensive power outages during the October nor’easter. The company was also blasted in a report by James Lee Witt, former head of the Federal Emergency Management Agency.

Witt’s Washington, D.C., firm, Witt Associates, stated that CL&P was not only unprepared for the storms, but also made “critical mistakes and was seriously undermanned” during the Oct. 29 snowstorm.

Another key recommendation by the panel is that the power companies either hire more employees or formulate a better plan to bring in emergency out-of-state back-up crews during storm disasters.

“This was another serious problem that the panel felt was strongly lacking during both storms,” said McGee. “This is also an area in which official state standards must be set.”

Fortifying the state's power-line infrastructure, planning for higher storm surges in coastal areas, developing improved communications among local towns, the state and the power companies, and more extensive tree trimming are also among the panel's major recommendations.

Specifically, the panel recommends that the Department of Transportation’s maintenance budget be increased by $1 million a year for three years to pay for more tree trimming.

“Downed trees were considered the main reason for downed power lines,” said McGee.

However, finding the estimated $2.2 billion CL&P estimates it will take over the next 10 years to upgrade infrastructure “could be a difficult task,” Malloy indicated during a press briefing Monday.

The panel proposes moving some power lines underground at critical infrastructure areas such as hospitals, developing micro-grids and strengthening existing overhead wires.

"Connecticut’s infrastructure had increased significantly, while the manpower associated with the maintenance and repair of that infrastructure had decreased significantly," the report says. "The result was that although Connecticut has faced far more significant storms, such as Category 3 hurricanes, both Tropical Storm Irene and the October nor’easter left record numbers of residents without electricity, communications, heat or reliable supplies of water."

“We did many things right in the wake of these two storms, but when the margin of error is zero – like it was for these two storms – we have to do better,” Malloy said in a statement Monday morning.

Malloy said he will study the report’s recommendations and that his office will respond within the next week or two, likely making proposals on critical issues that would need legislative approval.

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