NU-NStar Merger Good for Consumers? That’s a Joke as Both Seek Huge Rate Increases

Back in April of 2012 when the monstrous merger between utility giants Northeast Utilities and NStar was finalized, company officials promised the union would be good for consumers with the new conglomerate having better bargaining power to negotiate lower rates for customers. Fast forward to 2014 and both entities seeking huge rate increases. The consumer is on the hook for a merger that never should have happened.

In Connecticut, electric rates for Connecticut Light and Power (CL&P), a subsidiary of Northeast Utilities (NU), are scheduled to jump 26 percent starting in January. Meanwhile, NStar customers in Massachusetts will be paying 29 percent more come the first of the year. Both numbers are absolutely outrageous and state officials should act quickly to stem such huge hikes.

As he often is, Connecticut Attorney General George Jepsen is out front on the ridiculous CL&P request. Jepsen filed a brief last month that detailed $90 million in reductions to the utility’s $221 million increase request. “Connecticut consumers—especially those on fixed or limited incomes—should not have to absorb any unwarranted increases in their cost of living, which this application would have them do,” Jepsen said in a statement at the time.

Executive bonuses is one area that Jepsen said could be reduced. NU Chief Executive Officer Thomas May’s salary was $8 million in 2012 and $7.7 in 2013. That may be fine for a private company’s top guy, but not for a regulated utility.

Meanwhile, the Connecticut Office of Consumer Counsel charges CL&P couldn’t even bring itself to tell the truth. Consumer Counsel Elin Swanson Katz says the consultant for the utility manipulated evidence and was dishonest in testimony to regulators. Katz’ office is seeking sanctions against CL&P.

Given the performance of both CL&P and NStar during storms and other outages over the past several years, the claim that the merger would help and benefit consumers is an absolute joke. Both Massachusetts and Connecticut regulators should immediately act to stop these ridiculous rates increases.