Connecticut Attorney General's Office
Press Release
Attorney General Fights $81.5 Million United Illuminating Rate Hike Request, Outrageous Exec Compensation
January 28, 2009
UI's rate request includes millions of dollars to fund steep salary increases and incentive compensation for already high-paid executives -- as well as nearly $1 million the company spent to pursue this application.
Blumenthal also urged that the DPUC bar any commitments or expenses for a move to a new expensive central facility in Orange until there is full, critical scrutiny by regulators.
Blumenthal will appear personally before the DPUC to fight UI's request at a public hearing on this case at 2 p.m. on Thursday.
"This rate request reveals a senior corporate culture that encourages executives to unjustly reward themselves at grave costs to over-burdened ratepayers," Blumenthal said. "The DPUC rightfully rejected most of this rate request, but must cut even deeper."
While commending the DPUC for a draft decision that rejects most of UI's outrageous rate request, Blumenthal said the DPUC should further cut UI's rates by at least $10 million more in 2009 and 2010 before adopting its final decision.
UI filed a request to raise rates by $51.4 million in 2009 and $29.7 million in 2010. This application comes just two years into a four-year plan approved in 2006 that has already raised rates by $35.5 million.
Blumenthal said, "Even while many consumers are barely clinging to their homes, losing their jobs and struggling to support their families, United Illuminating executives want to boost their own bonuses at ratepayers' expense. United Illuminating deserves a reality check -- consumers are tightening their belts, and so should utility companies.
"UI's rate application was irresponsible and outrageous and would result in rates that were far higher than levels that could be considered just and reasonable. This latest request included millions and millions of dollars in unwarranted and unjustifiable increases in such non-essential items as salaries, payroll levels and incentive compensation for UI's already high-paid executives."
UI's rate request proposed pay raises ranging from between 4 percent for non-executives and 5 percent for already highly paid executives. The DPUC rightfully rejected the proposal, but Blumenthal said DPUC should further revise its decision to explicitly eliminate any ratepayer funding of pay raises for the company's executive employees.
Blumenthal said executive pay raises should be funded exclusively by shareholders.
Blumenthal also urged that the DPUC, if it approves certain construction spending by UI, expressly prohibit the company from diverting that money for other purposes such as executive compensation.