Local Utilities May Be In Hot Water Over Business Retreats

May 11, 2018

The Federal Bureau of Investigation is taking a look at the Connecticut Municipal Electric Energy Cooperative. The reasons for the probe aren’t clear yet.

Claire Bessette, a reporter at The Day In New London, said it may have something to do with outings to the Kentucky Derby.

“They started in 2013 taking some of what they call the margin fund -- profits from contracts with outside entities — and some of their own money, and having these strategic retreats to the Kentucky Derby and also the luxury Greenbrier Resort in [West] Virginia,” Bessette said.

CMEEC includes two relatively large power brokers in Southeastern Connecticut — Norwich Public Utilities and Groton Utilities, as well as smaller companies like the Bozrah Light & Power Company and two based outside the area in Norwalk.

Executives in the cooperative wanted to improve cohesion between the bigger and smaller companies, so it began hosting retreats for some of the representatives.  That included four trips to the Derby from 2013 to 2016.

Bessette said there might be an issue with how the retreats were paid for.

“The profits that they realized from all their contracted services -- and whatever rate money they get that doesn’t cover operations -- goes into this big fund that’s supposed to go back to the member utilities for rate stabilization,” Bessette said. “And they took a piece of that to fund the trips. Rate-payers are saying ‘Hey, that’s our money.’”

Connecticut Public Radio reached out to the member utilities of CMEEC and heard back from three of the five. Norwich Public Utilities actually turned over documents to the FBI in response to the inquiry, but NPU’s spokesman Chris Reilly said his company has no public comment on any FBI investigation.

Reilly said the trips, which he emphasized were CMEEC-sponsored, would have no effect on energy rates.

Ken Sullivan, Jewett City’s director and board chairman for CMEEC, said Jewett City hasn’t raised power costs in eight years.

The general manager of South Norwalk Electric and Water said his entity is not being investigated and that no one from SNEW ever went to the Kentucky Derby.

Bessette said that there has been backlash from the trips and that it’s led to the appointment of new board members for the cooperative.