Hartford Courant - May 16, 2007
Constellation NewEnergy Accused Of Failing To Provide Savings To Towns In State
By MARK PETERS
Courant Staff Writer
May 16 2007
Supporters of increasing government regulation of Connecticut's electric market say Wethersfield, Cheshire, Farmington and other towns are getting a bad deal when they buy electricity.
Consumer advocates and legislators who are trying to reignite interest in energy reform bills before the General Assembly on Tuesday accused power supplier Constellation NewEnergy of wooing town governments and school systems with promises of lower prices that didn't materialize.
"They believed the snake oil salesmen," said Tom Swan, executive director of the Connecticut Citizen Action Group.
But Baltimore-based Constellation rejected the allegations by Swan and others, which were based on an analysis done by state Rep. Vickie Nardello, D-Prospect, of select monthly electric bills for 12 towns or school systems. Constellation said it is providing savings, and more important, a stable price to towns, cities and school systems across the state. Constellation is among several companies that sell electricity to businesses and municipalities in the state.
Jennifer Janelle, a lawyer who negotiates contracts between municipalities and electric suppliers, disputed Nardello's conclusions.
"The analysis is useless because it's not a complete picture," she said.
The back-and-forth is the latest episode in an ongoing debate about what role government should have in the state's electric system.
Democrats in the House and Senate haven't reached consensus on the issue, preventing action on long-promised energy legislation. Nardello and consumer advocates held a press conference Tuesday to announce the analysis and try to rally support before the legislative session ends June 6.
A decade ago, Connecticut deregulated the electric generation system in hopes of lowering prices. Utility companies, such as Connecticut Light & Power, sold their power plants and now only distribute electricity. Competing electric suppliers were supposed to emerge to sell the electricity.
That has not happened for residential customers. But during the past year, suppliers have come into the state offering contracts to businesses, municipalities and school districts. They say they can offer a price that's more stable and often lower than standard service, which utility companies are required to offer by law.
Nardello, however, says her review shows that municipalities haven't saved money by switching from standard service to Constellation. For select buildings in 12 towns, the actual cost was $91,000 more, according to her review. Additionally, the price fluctuated by almost 2 cents a kilowatt hour from 2006, not providing the promised stability, Nardello said.
Attorney General Richard Blumenthal said his office would investigate the municipal contracts to see whether power suppliers provided what they promised.
Constellation says its contracts provide a fixed cost for electricity through 2009 at a cost that's lower than the standard offer. Additional regulatory charges on top of that amount often change and are passed on to the customer. Overall, the contracts should be judged over the course of three years and not a few months, said Larry McDonnell, director of corporate communications for Constellation.
Janelle said she has clients, such as the cities of Middletown and Hartford, that are getting both a stable price and saving money. The analysis provided by Nardello looks at just a few buildings for a few months in 2006, which does not provide an overall picture of a community's electric costs, she said.
Nardello said her research furthers the case for increased regulation, including allowing CL&P to again build and operate power plants.
Senate leaders did not return calls for comment Tuesday. They have proposed legislation that would expand the retail market for suppliers to try to drive down prices.
Contact Mark Peters at mrpeters@courant.com.
Copyright 2007, Hartford Courant
