Date: Fri 11-Sep-1998

Publication: Bee

Author: CURT

Quick Words:

edink-Northeast-Utilities

Full Text:

ED INK: Ineptitude Should Not Pay

We like to think that our country's free enterprise system is the ultimate

meritocracy. In the marketplace, good ideas soar and bad ideas sink. To a

large extent that is true. Where there is competition, success comes to those

who work harder, smarter, and more efficiently. Yet one of Connecticut's

biggest businesses, Northeast Utilities, enjoys a monopoly, and over the

years, hard, smart, and efficient work has not been one of its hallmarks. Now

a federal judge has ruled that the utility's ratepayers should not have to pay

a premium for NU's mismanagement.

In a preliminary decision, which takes the form of a recommendation to the

Federal Energy Regulatory Commission (FERC), Judge William J. Cowan has

concluded that the utility's poor management drove up costs associated with

the decommissioning of the Connecticut Yankee nuclear power plant at Haddam

Neck. State officials, who argued against the utility's plan to assess

ratepayers for decommissioning costs plus returns on investments and other

charges associated with Connecticut Yankee, said Northeast Utilities had

allowed the plant to deteriorate through mismanagement. The plant closed in

1996, a full 11 years before its license was due to expire, when NU decided it

was cheaper simply to buy power from other utilities on the power grid. (See

story on page B14.)

Judge Cowan's decision, if adopted by FERC, could save Connecticut rate payers

as much as $200 million. It also serves notice on providers of public

utilities in the state that ineptitude should not pay.

This decision, along with state legislation enacted earlier this year designed

to allow the competitive generation of electricity, may mark the end of an era

in Connecticut's electrical energy market. With Northeast Utility's monopoly

disappearing, and federal regulators' insistence on competence as a

prerequisite for compensation, we may finally see some relief in our electric

bills, which far exceed the national average. If NU still wants to compete in

this new era, they will have to work harder, smarter, and more efficiently.