Several General Assembly bills would target CMEEC

January 28, 2019 GMT

The spring legislative session promises efforts by legislators to tighten controls and increase oversight and transparency of the state’s only municipal electric energy cooperative, which has been racked by controversy, including the indictment of five of its officials on federal corruption charges.

State Sen. Heather Somers, R-Groton, who had spearheaded legislative changes to the oversight and governance of the Connecticut Municipal Electric Energy Cooperative in 2017, has filed several bills this month that would add more controls and force financial disclosure of CMEEC operations.

State Rep. Charles Ferraro, R-Cheshire, has submitted a bill titled “An act requiring the adoption of recommendations of certain forensic examinations,” aimed at implementing the recommendations of a five-year forensic audit of CMEEC’s finances. The audit, done by the firm CohnReznick, was a product of Somers’ 2017 legislation.

The increased state attention to the previously obscure cooperative owned by six municipally owned electric utilities started in fall of 2016, when CMEEC’s hosting of lavish trips to the Kentucky Derby for top staff, board members, their families and invited guests was brought to light.

The FBI launched a two-year investigation that led to indictments of CMEEC CEO Drew Rankin, Chief Financial Officer Edward Pryor, Norwich Public Utilities General Manager John Bilda and former CMEEC board members James Sullivan of Norwich and Edward DeMuzzio of Groton. They face one count each of conspiracy and three counts of theft from a program receiving public funds. Rankin and Sullivan face the same charges in a second indictment stemming from CMEEC’s payment of nearly 370,000 in legal bills in response to the subpoenas during the two-year investigation. Pryor has filed a federal civil lawsuit against CMEEC demanding advancement of legal costs for the criminal defense, and CMEEC officials are discussing in closed-door sessions how to handle the legal cost issue.

CMEEC officials said Friday it’s too early to comment on proposed legislation, before bills are better defined and presented for public hearings.

“We look forward to reviewing any legislation that may be introduced and providing comment at that time,” CMEEC General Counsel Robin Kipnis said in an email.

In December, Groton City Mayor Keith Hedrick, chairman of the Groton Utilities Commission and a CMEEC board member, put together a presentation for local legislators on the value CMEEC brings to its member utilities. Hedrick has been tracking Somers’ proposed legislation but said he couldn’t comment on changes she has expressed verbally that are not yet included in the written bill language.

Somers’ proposals would call for disclosure of certain financial charges on customers’ bills of CMEEC member utilities, disclosure of contracted power deals once they are signed, and continuing five-year audits of CMEEC’s books. One bill would require both CMEEC and municipal electric utilities to “provide the same detailed information and disclosures as are required for utility companies regulated by the Public Utilities Regulatory Authority.”

Hedrick said some of the proposals he would support from his position as Groton utilities chairman, including the mandate that CMEEC seek reimbursement for the legal costs of defendants found guilty of crimes. But he would oppose legislation that would end up costing the member utilities more money – such as the call for continued five-year audits, which he called “redundant,” and disclosure of proprietary, competitive purchased power agreements with large commercial customers.

Somers initially had proposed that CMEEC be placed under PURA’s regulatory oversight, but she said there was no support by the authority to take on oversight of the cooperative.

Another of Somers’ bills calls for maintaining funding for the state municipal electric ratepayer consumer advocate position, created in Somers’ 2017 legislation. Somers wants to add language to that bill to give the position 70,000 for the first year – 2017 – and 62,000 of the 30,000 would be for.”