Senator Somers, Senator Formica Release Statement on Accountability Legislation

May 31, 2017

Senate Bill 4 Calls for the Most Basic Ratepayer Protections Concerning Municipal Electric Utility Cooperatives

 HARTFORD, Conn. – Today State Senator Heather Somers (R-Groton) and State Senator Paul Formica (R-East Lyme) released the following statement regarding Senate passage of Senate Bill 4, An Act Concerning Municipal Electric Utility Cooperatives. This legislation calls for the most basic ratepayer protections and transparency concerning Municipal Electric Utility Cooperatives, specifically the Connecticut Municipal Electric Energy Cooperative (CMEEC), which includes the towns of Groton, Norwich, Bozrah, Jewett City, South Norwalk, East Norwalk and Norwalk.

 I want to extend a humble thank you to my fellow lawmakers for supporting this important, bipartisan legislation,” said Sen. Somers. “This bill directly addresses recent financial misconduct of an organization created by the legislature to obtain and deliver the lowest utility prices for ratepayers. CMEEC has engaged in highly questionable spending practices and have broken the trust of many ratepayers. Our communities deserve transparency and accountability. In a time where every dollar counts, this legislation works to restore confidence in the process as a whole, ratepayers deserve to know exactly how their hard-earned payments are being invested, allocated and spent.”

CMEEC was created in 1976 and was designed to work with its members, local municipal utility companies, to acquire and deliver low-cost, reliable power. CMEEC has engaged in highly questionable spending practices – most recently it was discovered that the organization spent $360,000 on a lavish trip to the Kentucky Derby for more than 40 people. Although this was reported as a strategic retreat, the trip in 2016 had no business agenda. The public soon learned that the Kentucky Derby trips were an annual occurrence and the expenditures totaled over $1.2 million and like previous Derby trips there were no seminars nor business calendars.

Further investigation into the municipal utility officers’ participation in the trip by the Norwich Ethics Committee uncovered that the funds used to pay for the 2016 Kentucky Derby trip were derived from the town’s ratepayer stabilization fund; a fund that were meant to be held at CMEEC to provide a cushion for ratepayers when market prices spike – but CMEEC funded extravagant trips instead.

“This legislation is about transparency and accountability,” said Sen. Formica. “It asks for straightforward ratepayer protections for customers and businesses that have no ability to find another provider. I am proud to stand with my fellow legislators and demand honesty and fair dealing. These customers deserve answers. Unfortunately, the truth is we still don’t know the extent of these abuses. This organization can no longer remain indifferent to the public’s call for accountability. “

Senate Bill 4 will require CMEEC to conduct a five year forensic examination and look back to examine and account for its financial operations. The forensic examination will be administered by a certified forensic auditor and include a review of all revenue and expenditures. CMEEC will be required to post on its website and provide participants the results of the forensic examination, CMEEC will also be required to provide a copy of the report to the General Assembly’s Energy and Technology Committee.

Senate Bill 4 now heads to the House of Representatives for final passage.