Sen. Markley: We should pay back ratepayers for the hidden tax.

June 6, 2011

Hartford, CT – Today Senator Joe Markley (R-Southington) offered an amendment to repay all CL&P customers who paid a hidden tax on their electricity bills from January 2011 to July 2011. The idea failed along party lines, 14 to 20.

If Senator Markley’s amendment had passed, ratepayers, small businesses and municipalities would all have received refunds.

“I saw a bill received by a small business in Cheshire which included over $1,000 in taxes on electricity every month,” recalled Senator Markley.

The state comptroller had recently reported that enough surplus money had been collected that the $646.6 million securitization is no longer necessary. Thus, the tax on utility bills is expected to be taken off.

“If we agree that this sneaky tax should be abolished, then we certainly ought to compensate those who have paid the tax. Otherwise, CL&P customers will have been taxed — in some cases, such as small businesses and towns, heavily – -while UI customers and others have not paid the tax at all, and never will,” said Senator Markley.

The treasurer’s office never bonded for the money because of a court case filed by Senator Markley. The suit claimed that the utility tax was unfairly levied by the Department of Public Utility Control (DPUC), an agency that doesn’t have the authority to tax, and only applied to certain rate payers, not all rate payers.

“The securitization was a bad policy which we have an opportunity to make right,” remarked Senator Markley.

The governor and comptroller and one of the utility companies all recently made public statements suggesting state government not only cancel the “hidden tax,” but also credit customers for the $40 million paid in so far. Here is an excerpt from online news organization, the CT Mirror:

  • “I certainly would not be against that,” Malloy told Capitol reporters last week, though he quickly added that stopping the surcharge from going forward was his top priority.
  • In a written statement issued when he announced the latest surplus projection on June 1, Comptroller Lembo wrote that “any repeal should include, if possible, refunds to impacted ratepayers.”
  • Additionally, Richard Soderman, director of legislative policy for Northeast Utilities – CL&P’s parent company said, “We’re still hopeful we could get the $40 million back to return to our customers.”

    • “I am disappointed that a majority of my fellow Senators, voting on party lines, did not support my amendment,” said Senator Markley. “All we ask is equity and transparency, which this amendment would have provided. I will continue to work to make sure this tax is repealed and the funds restored to the rate payers.”