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Electric utilities are crucial as scapegoats for politicians

The Chris Powell Column

Having itself failed to perform for most of this year, abdicating amid the virus epidemic, the General Assembly is gearing up to punish Connecticut’s two leading electric companies, Eversource Energy and United Illuminating, for supposedly failing to restore power fast enough after the recent tropical storm. Without waiting for any formal investigation and findings, the top Democrats and Republicans on the Legislature’s Energy and Technology Committee have introduced a bill to make the companies do a bunch of things, most of which the Public Utilities Regulatory Authority already seems to have the power to make them do.

Maybe Eversource is lying, but a week ago the company said the storm did far more damage to the electric system than Hurricane Irene in 2011 and Hurricane Sandy in 2012 and that power was almost completely restored in only eight days, compared to 11 for Sandy and 12 for Irene.

This might indicate improvement by Eversource, but everybody is in a lousy mood because of the epidemic and the hateful tone of politics, so nobody wants to hear it, much less find out if it’s true.

The proposed legislation would forbid electricity rate increases for two years, as if the utilities ever increase rates on their own, as if rates aren’t controlled by the utility authority, as if the governor and Legislature don’t appoint the authority’s members, and as if two years ago the governor and Legislature didn’t enact a law requiring Eversource to purchase increasing amounts of more expensive “renewable” energy, hoping that people would forget by the time the rate increase took effect.

The legislation suggests that the utilities, particularly Eversource, are making too much money — and maybe they are. Certainly some executives are extravagantly paid. This has prompted talk of having state government take over the electric system, since it is a natural monopoly and is properly left in private ownership only if it operates better that way under regulation.

But such talk is occurring almost entirely in forums other than state government itself, and it’s only theoretical. As a practical matter, it’s ridiculous.

That’s because no governors or legislators would ever want people calling them when the lights go out, or would ever want responsibility for another huge and complicated infrastructure system. Already Connecticut cannot properly maintain its highways, bridges and railroads, which are notoriously neglected. That’s why until the epidemic, Governor Lamont spent most of his time trying to persuade the Legislature to authorize tolls.

What would happen if state government operated the electric system? Would it function even as well as the Motor Vehicles Department or the Connecticut Port Authority? Or, as with the rest of state and municipal government, would the electric system steadily be cannibalized to increase the compensation of its employees?

This week Governor Lamont hinted at the answer, instructing department heads to prepare their next budgets with 10%t reductions, just a few weeks after approving $350 million in raises for state employees while private-sector unemployment soared amid the epidemic.

State takeover of the electric system would delight the state employee unions, providing them big increases in membership and political influence.

Of course the first step in state government’s takeover of the electric utilities would be to settle on a fair price for their assets. Then state government would have to raise taxes by maybe billions of dollars or borrow that much even as Connecticut already has close to the highest per-capita state government debt load in the country.

For political purposes, elected officials badly need electric companies to remain under private ownership, since that provides cover for the social and political costs state government stuffs into utility bills, for which the utilities, not elected officials, get blamed.

If ratepayers ever realized that much of their electric bill is actually taxation, they’d complain to their elected officials even when the lights were still on.

 

Chris Powell is a columnist for the Journal Inquirer in Manchester.

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