My Solution to the CL& P Fiasco- Mutualize!!!!

Utility companies are a special business class for two reasons:  (1) they often own a monopoly on the available technology required to do the job, as in overhead wires and underground pipes and (2) they are a necessity for most of us mortals who choose to live on the grid,  enjoying the benefits of modern industrialization.  As long as we must endure pollution, the least we can expect is some heat and hot water coming out of the faucet.

This last October storm in Connecticut was recently described as the worst in 500 years.  I kid you not.  Even though we have barely kept any records for the last 100 of those 500, speculators claim that because Connecticut is now about 70 percent forested, the impact of the snow landing on fully-leaved trees substantially compounded the effects of the storm.  While that may be true, my best guess is that 500 years ago our forests had to be at least as dense as they are now. At any rate, does it matter?  It was a very bad storm.  Over 800,000 Connecticut residents lost power in the first day, but the real story is that tens of thousands suffered without power through the 8th, 9th and 10th days.  Following Hurricane Irene by a scant few weeks, the October storm (poorly named Alfred, a weak name if there ever was one) proved the following definitive facts to us Connecticut residents:

1. The “100 year storm event” is a ridiculous misnomer.  I think we’ve had at least three in the past two years.

2. Connecticut’s biggest utility company, CL& P, is currently not up to the task of preparing or responding to these storms.      Out of state crews cannot be relied upon to reach us in our hours of need.

3. We need to find solutions to avoid catastrophe in the short term future.

Here are my solutions:

1. Mutualize the corporate structure of  CL& P.  This would require changing the current corporate structure from one in which there are shareholders to one in which there are members.  Why would this be better than the current arrangement?  Here are some reasons:

A. Mutual companies report to their members, which are the people that actually use the utility.  Because of that, the directors of the utility are only accountable to the class of people who use the services that are provided.  Decision making for the long and short term is made with an eye as to what is best for the customer.

B. If the company is run well, the members receive a dividend at the end of the year, which in effect becomes a reduction in utility costs. Connecticut residents pay the most money per capita of any state in the continental United States; only Hawaaii residents pay more.  Why should that be the case?

C. Mutual companies tend to keep the lid on compensation packages for the highest echelon of management. They tend to be more conservative in their approach to spending, again because they must answer to the people who actually use their services.

C. C corporations, such as CL & P, report to their shareholders, a very different constituency. Shareholders do not have to be users of the utility, and in most cases, are far removed from the performance of the company. Shareholders care about stock price and dividends. While the Board of Directors is busy trying to please Wall Street, the utility users who depend upon this service for life and property are getting treated as a second class priority.

2. Long Term Capital Campaign for More Underground Wires

I suggest CL & P embark on a long-term capital campaign across the state to bury underground wires where and when it can.  The advantages to this are obvious in case of storm. The trouble with Alfred was not the snow,  rather it was the fact that the tree branches were so entwined with wires that people had to wait days for a competent crew to safely separate the two to begin work.   If more wires were underground, fewer would be entangled with tree branches.  If we look at our recent history as a guide, these storms are coming with more frequency , not less. The farmlands of Connecticut are not coming back anytime soon; the trees are here to stay.

I realize that there is a great cost to bury the power lines. I also realize that if those lines don’t work, it takes longer to fix them because of lack of access. Nonetheless, I have seen many incidents where new water and gas lines were laid,  opening the ground anyway. Just last year most of Route 7 was laid bare for months. A new water pipeline was being installed and the lanes were being widened.  That would have been a perfect opportunity to bury power lines at the same time. There is simply no reason why there should not be a coordinated effort among the utilities in our small state to combine the efficiency of capital projects so that when possible the utility lines are buried, one project at a time.

This week Jeff Butler, the CEO of CL & P, resigned as a result of the poor management by CL & P during Alfred. We who live in this state have a higher stake than anyone else in capable lights, heat and electricity.  We deserve for our voice to be heard.  If you agree with my solutions, please tweet or facebook this post to your circle of friends. Let’s begin a movement for change.

 

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