Attorney General, New Haven Mayor Pleased UI Restoring $50 Million For Maintenance, Capital Projects, Renew Call For DPUC Investigation

June 10, 2009

Attorney General Richard Blumenthal and New Haven Mayor John DeStefano, Jr. said today they are pleased United Illuminating (UI) has agreed to their demand that it restore $50 million for capital projects and maintenance vital to reliability and public safety.

Blumenthal and DeStefano praised the Department of Public Utility Control (DPUC), which agreed with them that the company must rescind deep cuts or face a possible rate decrease.

UI pledged in a recent letter to the DPUC to restore the $50 million.

The attorney general and mayor said that a DPUC investigation into UI's cuts is still necessary. They had asked DPUC to investigate whether the reductions endangered public safety and reliability, and violated commission orders requiring minimum spending levels for maintenance and capital improvements. They also asked DPUC to reconsider UI's request to move its headquarters to Orange.

UI originally claimed that the cuts were necessary because it could not access capital markets and its stock price was depressed. Since then, UI raised $91.4 million in a stock offering and its share price has nearly doubled.

Blumenthal said, "This capitulation seems like a victory, but only restores capital spending commitments required all along. UI deserves no credit for doing what it was legally supposed to do. Only our persistent, relentless pressure forced them to do what was ordered. Their compliance with their commitment to restore the reductions should be scrutinized very closely and critically -- so they actually do it.

"This action -- a response to our relentless pressure -- presents more questions than answers. I urge the DPUC to approve our request for an investigation into UI's irresponsibility and mismanagement. Why did it slash capital spending? Why did it deny having sufficient resources? Why did it appear to deceive? These questions and others deserve answers.

"We are committed to continue the fight against wasteful spending -- from ratepayers' pockets -- on a massive new Taj Mahal headquarters. UI's endangering reliability and safety to raise profits is appalling and unacceptable. DPUC should aggressively expose the decision-making leading to these irresponsible and dangerous cuts," Blumenthal added.

DeStefano said, "While UI is finally doing what it should have done in the first place, it begs the question of why they chose first to seek a rate increase, then changed their minds and said they had no resources for capital improvements, but now they suddenly do. It's time for the DPUC to investigate UI's erratic rate increase requests with an eye towards a determination of who is really paying for this move to a new corporate palace."