File No. 453

House of Representatives, April 16, 2012

The Committee on Energy and Technology reported through REP. NARDELLO of the 89th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING CONSUMER PROTECTION FOR UTILITY CUSTOMERS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 16-44a of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Each public service company, as defined in section 16-1, regulated pursuant to sections 16-19 and 16-19e and serving more than three thousand three hundred customers shall (1) on each customer's bill, notify customers at least annually that a listing of the salaries, and other forms of compensation, of its directors and officers and the salaries, and other forms of compensation, of the directors and officers of any holding company, as defined in section 16-47, that controls such public service company can be obtained from the Public Utilities Regulatory Authority at the customer's request, and (2) not later than July first, annually, submit to the authority a listing of the salaries, and other forms of compensation, of all its directors and officers and the salaries, and other forms of compensation, of the directors and officers of any holding company that controls such public service company, during the preceding fiscal year. [Any such public service company that files Securities and Exchange Commission Form 10-K, Part III with the authority pursuant to an order of the authority shall be deemed to be in compliance with subdivision (2) of this subsection.]

(b) The authority shall maintain and make available to the public a listing of the salaries, and other forms of compensation, of directors and officers of each public service company regulated pursuant to sections 16-19 and 16-19e and serving more than three thousand three hundred customers and the salaries, and other forms of compensation, of directors and officers of any holding company that controls such public service company. The authority shall mail such listing to any person that requests it.

(c) No public service company or holding company that controls a public service company may compensate any director, officer, executive or employee an amount exceeding three hundred fifty thousand dollars annually using funds received from ratepayers of such public service company. No public service company or holding company may increase the level of compensation of any director, officer, executive or employee above three hundred fifty thousand dollars annually based upon such director's, officer's, executive's or employee's employment by more than one public service or holding company. The compensation for such director, officer, executive or employee from shareholder funds shall not be limited by the provisions of this subsection.

Sec. 2. (NEW) (Effective from passage) Each electric company and electric distribution company, as those terms are defined in section 16-1 of the general statutes, shall reimburse any residential customer of such company for spoilage loss of any food items or refrigerated medications caused by a lack of refrigeration during any electric service outage lasting longer than forty-eight hours, provided (1) such reimbursement shall not exceed one hundred fifty dollars for any such outage for food items and two hundred dollars for any such outage for refrigerated medications, (2) such customer files an application for reimbursement with such company not later than thirty days after electric service is restored, (3) such customer submits with such application an itemized list of any spoiled food items or refrigerated medications and proof of such spoilage loss, and (4) (A) such customer's household income is not greater than sixty per cent of the state median income at the time of such outage, (B) such customer or a member of such customer's household received benefits from a food assistance program administered by the Department of Social Services pursuant to subdivision (9) of section 17b-2 of the general statutes or section 17b-790a of the general statutes at the time of such outage, or (C) such customer's household received assistance from an energy assistance program implemented pursuant to section 16a-41a of the general statutes not more than twelve months prior to such outage. Such proof may include, but not be limited to, any credit card statement, bank statement, receipt or check demonstrating that such customer purchased such food items or medication or any photograph of such spoiled food items or medication. Upon approving such application, such company shall reimburse such customer in the form of a credit on such customer's bill. Such company shall recover the amount of such credit through the systems benefits charge established pursuant to section 16-245l of the general statutes, as amended by this act. The total amount of any such reimbursements shall not exceed ten million dollars annually.

Sec. 3. (NEW) (Effective from passage) (a) No public service company, holder of a certificate of video franchise authority, electric supplier or telecommunications company, as those terms are defined in section 16-1 of the general statutes, shall assess any late fee to any customer of such company or holder for failure to timely pay such customer's monthly bill if the due date of such bill occurs during any period in which such customer was without service for more than twenty-four consecutive hours, provided such customer was not without service due to such customer's nonpayment. Nothing in this subsection shall prohibit any such company, holder or supplier from assessing any late fee on any subsequent monthly bill.

(b) Each public service company, holder of a certificate of video franchise authority, electric supplier or telecommunications company, as those terms are defined in section 16-1 of the general statutes, shall credit the monthly bill of any customer of such company or holder if such company or holder fails to provide service to such customer for more than twenty-four consecutive hours during any monthly billing period, provided such customer was not without service due to such customer's nonpayment. Such credit shall be in an amount equal to such customer's daily service charges and fixed charges multiplied by the number of days such company or holder failed to provide service to such customer.

Sec. 4. Subsection (a) of section 16-245l of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) The Public Utilities Regulatory Authority shall establish and each electric distribution company shall collect a systems benefits charge to be imposed against all end use customers of each electric distribution company beginning January 1, 2000. The authority shall hold a hearing that shall be conducted as a contested case in accordance with chapter 54 to establish the amount of the systems benefits charge. The authority may revise the systems benefits charge or any element of said charge as the need arises. The systems benefits charge shall be used to fund (1) the expenses of the public education outreach program developed under subsections (a), (f) and (g) of section 16-244d other than expenses for authority staff, (2) the reasonable and proper expenses of the education outreach consultant pursuant to subsection (d) of section 16-244d, (3) the cost of hardship protection measures under sections 16-262c and 16-262d and other hardship protections, including, but not limited to, electric service bill payment programs, funding and technical support for energy assistance, fuel bank and weatherization programs and weatherization services, (4) the payment program to offset tax losses described in section 12-94d, (5) any sums paid to a resource recovery authority pursuant to subsection (b) of section 16-243e, (6) low income conservation programs approved by the Public Utilities Regulatory Authority, (7) displaced worker protection costs, (8) unfunded storage and disposal costs for spent nuclear fuel generated before January 1, 2000, approved by the appropriate regulatory agencies, (9) postretirement safe shutdown and site protection costs that are incurred in preparation for decommissioning, (10) decommissioning fund contributions, (11) the costs of temporary electric generation facilities incurred pursuant to section 16-19ss, (12) operating expenses for the Connecticut Energy Advisory Board, (13) costs associated with the Connecticut electric efficiency partner program established pursuant to section 16-243v, (14) reinvestments and investments in energy efficiency programs and technologies pursuant to section 16a-38l, costs associated with the electricity conservation incentive program established pursuant to section 119 of public act 07-242, [and] (15) legal, appraisal and purchase costs of a conservation or land use restriction and other related costs as the authority in its discretion deems appropriate, incurred by a municipality on or before January 1, 2000, to ensure the environmental, recreational and scenic preservation of any reservoir located within this state created by a pump storage hydroelectric generating facility, and (16) the cost of any credit to any residential customer for spoilage loss of any food items or refrigerated medications pursuant to section 2 of this act. As used in this subsection, "displaced worker protection costs" means the reasonable costs incurred, prior to January 1, 2008, (A) by an electric supplier, exempt wholesale generator, electric company, an operator of a nuclear power generating facility in this state or a generation entity or affiliate arising from the dislocation of any employee other than an officer, provided such dislocation is a result of (i) restructuring of the electric generation market and such dislocation occurs on or after July 1, 1998, or (ii) the closing of a Title IV source or an exempt wholesale generator, as defined in 15 USC 79z-5a, on or after January 1, 2004, as a result of such source's failure to meet requirements imposed as a result of sections 22a-197 and 22a-198 and this section or those Regulations of Connecticut State Agencies adopted by the Department of Energy and Environmental Protection, as amended from time to time, in accordance with Executive Order Number 19, issued on May 17, 2000, and provided further such costs result from either the execution of agreements reached through collective bargaining for union employees or from the company's or entity's or affiliate's programs and policies for nonunion employees, and (B) by an electric distribution company or an exempt wholesale generator arising from the retraining of a former employee of an unaffiliated exempt wholesale generator, which employee was involuntarily dislocated on or after January 1, 2004, from such wholesale generator, except for cause. "Displaced worker protection costs" includes costs incurred or projected for severance, retraining, early retirement, outplacement, coverage for surviving spouse insurance benefits and related expenses. "Displaced worker protection costs" does not include those costs included in determining a tax credit pursuant to section 12-217bb.

Statement of Legislative Commissioners:

In section 2, "loss to any food" was changed to "loss of any food" for clarity and internal consistency; and in section 3(b), "service for such customer's" was changed to "service due to such customer's" for internal consistency.

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

The bill requires electric companies to reimburse certain customers for losses to food or refrigerated medications that result from an outage that lasts more than 48 hours through the systems benefits charge.¹ The state and municipalities, as ratepayers, would incur increased costs to the extent the systems benefits charge is insufficient to cover these expenses.

The bill also limits the amount of compensation for utility company officers and employees and waives late fees and credits monthly bills during certain outages. These provisions are not anticipated to have a fiscal impact.

The Out Years

The annualized ongoing fiscal impact of the systems benefits charge would continue into the future subject to inflation.

OLR Bill Analysis

sHB 5542

AN ACT CONCERNING CONSUMER PROTECTION FOR UTILITY CUSTOMERS.

SUMMARY:

This bill limits, to $350,000 annually, the maximum amount of compensation for utility company officers and employees that can come from ratepayers. It expands disclosure requirements for the compensation paid to utility officers and employees.

The bill requires electric companies to reimburse customers who are low or moderate income or receive food or energy assistance for losses to food or refrigerated medications that result from an outage that lasts more than 48 hours. It caps the reimbursement at $150 for food and $200 for medications. It pays for this provision with the systems benefit charge on electric bills.

The bill requires utility companies, certain cable TV companies, competitive electric suppliers, and telecommunications company to

1. waive late fees for their customers if the due date for a bill occurs during any period when the customer was without service for more than 24 hours and

2. credit the monthly bill of any customer if the company fails to provide service to the customer for more than 24 consecutive hours during any monthly billing period.

These provisions do not apply if the outage was due to the customer's nonpayment. The late fee provision does not bar a company from assessing a late fee for subsequent monthly bills. The credit must equal the customer's daily service charges and fixed charges multiplied by the number of days the company failed to provide service to the customer. These provisions apply to cable companies with certificates of video franchise authority (e.g., AT&T). They do not apply to other companies that hold certificates of cable franchise authority, i.e., most of the cable companies. Very similar credit requirements apply to all cable companies under existing law.

EFFECTIVE DATE: Upon passage

COMPENSATION FOR UTILITY EXECUTIVES

The bill bars utility companies and holding companies that control utility companies from compensating any director, officer, executive or employee more than $350,000 per year using funds received from ratepayers of the utility company. It bars the companies from increasing the level of compensation of any of these individuals above this amount based on his or her employment by more than one utility or holding company. This provision does not affect the amount of compensation from shareholder funds.

Under current law, each utility company with at least 3,300 customers must, by July 1 annually, submit a list of the salaries of its directors and officers to the Pubic Utilities Regulatory Authority (PURA). This requirement does not apply if the company has already filed a Securities and Exchange Commission Form 10-K, Part III with the authority pursuant PURA's order. All companies with more than 3,300 customers must at least annually include a bill insert that informs that they can obtain the listing from PURA.

The bill extends these requirements to (1) non-salary compensation received by the officers and directors and (2) officers and directors of holding companies that control utility companies. It eliminates the exception for companies that file the 10-K form.

REIMBURSEMENT FOR SPOILED FOOD AND MEDICATIONS

To be eligible for the reimbursement:

1. the electric company customer must have a household income of no more than 60% of the state median income at the time of such outage;

2. the customer or a member of his or her household received benefits at the time of the outage from the supplemental food assistance program (SNAP, commonly known as food stamps) or the food assistance program for legal immigrants administered by the Department of Social Services; or

3. the customer's household received assistance from the low income home energy assistance program not more than 12 months before the outage.

An eligible customer must submit with his or her application an itemized list of any spoiled food items and proof of such spoilage loss. The proof may include, among other things, credit card or bank statements, receipts, or checks demonstrating that the customer bought the food or medications. Upon approving the application, the company must reimburse the customer with a credit on his or her bill.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute

¹ The systems benefits charge is funded by a rate set by the Public Utilities Regulatory Authority. Effective January 1, 2012, the average systems benefits charge for CL&P is 0.143 cents per kilowatt-hour to collect $23.7 million in 2012. The average systems benefits charge for UI is 0.2367 cents per kilowatt-hour to collect $13.3 million in 2012.