Attorney General, OCC, Union Officials To Fight Planned CNG/SCG Layoffs

September 4, 2009

Attorney General Richard Blumenthal, Consumer Counsel Mary Healey and union officials said today that they will fight plans by Connecticut Natural Gas (CNG)/Southern Connecticut Gas (SCG) to lay off workers.

CNG/SCG is regulated by the Department of Public Utility Control (DPUC) which sets their rates and profit levels. Blumenthal and Healey will fight the proposed layoffs at the DPUC.

The DPUC earlier this summer reduced CNG's rates 4.2 percent and SCG's 3.2 percent because the companies' profits exceeded the approximately 10 percent profit they were allowed to earn.

Blumenthal noted that company CEO Robert N. Allessio earned compensation last year of $869,817, of which $748,480 was paid by Connecticut ratepayers. In a letter announcing the layoffs, Allessio indicated no plans to slash his own compensation.

Blumenthal said, "A Labor Day message from gas companies to workers and consumers: You're fired. The layoffs endanger service, reliability and safety, and flagrantly flout rate orders that presume necessary employee and payroll levels. It is greedily seeking unnecessary layoffs at a time of record unemployment solely to fatten its bottom line, even as the CEO earns outrageously overinflated compensation paid mostly by ratepayers.

"We will immediately act to block layoffs -- asking the DPUC for immediate hearings and orders if necessary. This layoff would flagrantly defy and flout the most recent rate decision ordered by DPUC, which granted permission for charges to consumers based on specific employment payroll levels. Now the company is simply seeking to boost its bottom line on the backs of workers and consumers. At the same time, it will maintain exorbitant compensation for upper level management.

"My office and the OCC are asking in a letter today to the DPUC for an immediate hearing so we can investigate and uncover possible violations of DPUC's orders and statutes. We will ask the DPUC to demand the company state the number and type of layoffs, outline their impact on safety and reliability and investigate whether the job cuts, if they occur, require further reduction to the company's rates. We will seek an immediate order to stop these employee reductions during the investigation process."

Consumer Counsel Mary Healey stated that "customers require reliable service at reasonable rates. The DPUC has established a rate structure for CNG and SCG that specifically allows them to recover expenses for employees at current staffing levels. CNG and SCG should abide by that rate structure until the court rules on their appeals."

Rob Eubank, president of Connecticut Independent Utility Workers Local 12924, which represents CNG workers, said, "We believe it is unconscionable to punish employees and risk public safety of CNG's customers because of mismanagement of the company by senior executives. We firmly believe that if CNG is permitted to conduct these layoffs that public safety and safe, reliable distribution of natural gas will be compromised. We must not allow CNG to lay off employees and risk public safety."

Mike Wargo of the United Steel Workers Local 12000, which represents SCG workers, also said the layoffs endanger public safety and called on the DPUC to halt them.