Newtown Getting $11K From

$8.1 Million CL&P Settlement

By John Voket

First Selectman Herb Rosenthal reported Wednesday that Newtown will get about $11,000 as part of a major settlement with Connecticut Light & Power (CL&P). The nominal award is tied to legal action dating back to the late 1970s.

The Connecticut Conference of Municipalities (CCM), of which Mr Rosenthal serves as president, scored a legal and financial victory on behalf of 77 cities and towns this week when the Connecticut Superior Court upheld a state Department of Public Utility Control (DPUC) order that CL&P refund an estimated $8.1 million to most of its municipal streetlight customers.

That amount reflects both CL&P’s overbillings of municipalities for street lighting services and the interest that accrued during CL&P’s appeal of the DPUC’s decision and order requiring the refunds.

“The CCM has been dealing with CL&P on the streetlight issue going back to 1979 or 1980,” Mr Rosenthal said. “Several years ago the DPUC supported CCM’s position on the streetlights but CL&P fought it every step of the way, taking it as far as Superior Court.

Mr Rosenthal confirmed that Newtown will get $11,000 more from the settlement, since CL&P already voluntarily provided about $10,800 to the town.

“But from CCM’s perspective this is a windfall,” Mr Rosenthal said. “Hartford is getting almost $3 million, and several small towns are getting quite a significant sum as well. Ridgefield is getting about $200,000.”

Mr Rosenthal, who has served as an officer with the organization for several years, credited the diligence and the good work of CCM’s staff and legal team for the victory.

“We know some of the municipalities will be using some of the settlement dollars to help CCM underwrite legal costs and membership dues,” he said.

The CCM legal team, representing the statewide association of towns and cities, intervened, testified, and argued to obtain the DPUC ruling and then to have it sustained on appeal. The court upheld the DPUC decision on every major legal issue except one, which involved releases that some towns had voluntarily executed with CL&P in order to settle refund claims.

Significant court-ordered refunds to participating communities include: Norwalk, $654,278; Waterbury $523,944; Greenwich, $347,263; New Britain; $309,824; Darien, $281,140; Ridgefield, $197,969; and Westport, $166,489. The refunds to small towns, though proportionally less, are high as well.

Newtown’s final settlement will amount to $11,746.68, according to the CCM.

“CCM’s long efforts to obtain compensation for municipalities that have been systematically overcharged by CL&P for street lighting services have finally paid off for towns and cities,” said CCM Associate Director James Finley.

Siding with CCM and the DPUC on four of the five issues involved on appeal by CL&P, the state Superior Court’s decision requires CL&P to refund an estimated $8.1 million to municipalities. Specifically, the court agreed with CCM and the DPUC that:

Refunds should not be subject to the six-year statute of limitations on causes of action (which would have substantially reduced the amount CL&P is required to pay);

The DPUC acted reasonably in requiring refunds to extend back to March 11, 1986 (CL&P argued for a much shorter refund period);

Refunds for so-called “no-date streetlights” also should extend back to March 11, 1986 (had CL&P prevailed on this issue alone, its payment to municipalities would have been reduced by more than $2.7 million); and

The DPUC’s award of $10 million was not “punitive” (potentially requiring a substantial reduction by the court).

On the fifth issue, involving mutual releases signed by 38 municipalities, the court agreed with CL&P. Citing public policy considerations, the court upheld the validity of the releases and limited refunds to these municipalities by CL&P to the amounts previously paid.

The August 29 ruling was on the appeal taken by CL&P from a June 2005 DPUC decision. CL&P chose not to appeal the Superior Court decision and the time limit for appeal has now expired.

The electric utility has the option to issue refunds either in one lump sum or as credits to customer bills over a 24-month period. Simple interest on any unpaid balances will continue to accrue at CL&P’s current cost of capital.