Energy and Technology Committee

JOINT FAVORABLE REPORT

Bill No.:

HB-5542

Title:

AN ACT CONCERNING CONSUMER PROTECTION FOR UTILITY CUSTOMERS.

Vote Date:

3/28/2012

Vote Action:

Joint Favorable Substitute

PH Date:

3/20/2012

File No.:

SPONSORS OF BILL:

Energy and Technology Committee

REASONS FOR BILL:

The bill relates to disclosure of executive compensation and limiting the use of rate payer funds for compensation. Also contains credits for lost food and credits for customers during prolonged service outages as well as waiving late fees for customers by utility companies.

Substitute Language:

The language specifies that no public service company or holding company may compensate a director, officer, executive or employee above $350,000 annually using funds from ratepayers of the public service. It does clarify that compensation from shareholders funds would not be limited. Section 4 prohibits accessing a late fee if the due date of the bill falls in ay period when a customer was without service for a period longer the 24 hours. In Section 4 it specifies that the cost of any credit to any residential customer for spoilage of food or medications be included in the systems benefit charge.

RESPONSE FROM ADMINISTRATION/AGENCY:

PURA testified concerning the bill and suggested in some areas that they have and exercised their authority regarding executive compensation. In other areas they asked for clarification of the language.

OCC supports section 1 of the bill and section 2 with reservations because cost would be shifted to the systems Benefits Charge which would mean the rate payers would pay.

They support section 3a with some suggested changes but they have reservations with the customer credit established in section 3b.

NATURE AND SOURCES OF SUPPORT:

CT Legal Services supports the bill

RESA supports the bill with an amendment to sections 3a and 3b with an amendment to remove “electric supplier”. (The language in LCO 2840 in the substitute language was not changed.)

NATURE AND SOURCES OF OPPOSITION:

AT&T opposes Sections 1 and 3. They feel the language in Sect 1 would make it more difficult for public service companies to attract and retain qualified officers, etc. Also the requirement to notify PURA of executive/director salaries would be an additional administrative burden on their company. They also question the description of “rate payers” and call them “customers”. They are also opposed to the probation of charging a late fee on customers. They don't believe this is necessary since they frequently issue credits to customers that would exceed the pro-rata amount defined in this bill. They are concerned that this request would be difficult to administer and additional costs would be passed on to consumers.

CL&P and Yankee Gas opposed the bill but suggested Sections 2 and 3 should only apply for gross negligence of willful misconduct

CT Water opposes the bill because of the compensation language.

UIL doesn't believe the bill is necessary since PURA reviews all operating costs and compensation when the company seeks to amend its rate. They are also opposed to an arbitrary cap on compensation as it applies to any public service company. They believe public service companies are being singled out.

Section 2 requires that they compensate lower income customers for food spoilage by an outage longer than 48 hours regardless of the cause or extent of the conditions that caused the outage.

Verizon points out that this section 1 would make it difficult for them to attract and retain qualified Management. They wanted an exemption for this section. They we are also concerned about the credit provisions and the fact that it would create a different system in Connecticut than the other states feeling that it would have a negative impact on a nationally uniform policy that would create customer confusion and increased costs.

NECTA opposed Section 3 – They don't believe that this section is necessary and that during the storms last year they complied with the currant outage laws and they cited a comment by Attorney General Jepson “After determining that their CT customers lost service these companies (cable TV companies) put their customers first. The recognized the real hardships many people across the state experienced from an extended loss of power following 10/29 snowstorm. The companies should be recognized and commended for doing the right thing,”

CBIA opposes this bill based on the compensation provisions in this bill.

Reported by: Richard Ferrari

3/29/12