Governor Rell: Formal Complaint Filed

Over ISO-New England Energy Payments

U.S. Attorney General Also Asked to Investigate Possible Criminal Charges

(Listen to Gov. Rell)

            Governor M. Jodi Rell today announced that the state, through the Department of Public Utility Control acting at her request, has filed a formal complaint with federal energy regulators alleging that ISO-New England wrongfully paid power companies nearly $86 million in ratepayer funds for energy they never produced or intended to supply.

            Governor Rell is also asking the U.S. Department of Justice to examine whether any criminal activity was associated with the case.

            “Ratepayers in Connecticut and the rest of New England have been taken for a ride,” Governor Rell said. “ISO-New England made costly deals with New York power companies, paying them $85.8 million over two years just to be on stand-by in case we needed extra electricity. But the companies never provided any extra electricity.

            “We want to know whether these deals were deliberately structured so that the power companies would get the stand-by payments but never be called upon, or were simply the result of incredibly – and inexcusably – lax oversight by ISO-New England,” the Governor said. “Either way, ratepayers in New England were fleeced out of nearly $86 million. In the middle of a recession, that is money they cannot afford to lose.

            “Part of ISO-New England’s job is to keep a close eye on the energy market in our region and take strong action to correct problems like this. Instead, this scheme persisted for more than two years and ratepayers paid the price – far too high a price.”

            The complaint asks the Federal Energy Regulatory Commission to order the full repayment of the $85.8 million, of which about $23 million is due to Connecticut ratepayers, as well as possible penalties and interest. It also asks FERC to eliminate the current market monitoring system at ISO-New England and replace it with an independent, third-party monitor so this situation can never be repeated.

            “Most of our families and employers are struggling to pay electric bills as it is,” Governor Rell said. “The last thing they need is for the agency in charge of running the power grid to be wasting $86 million of their money. Is this the sort of ‘help’ Connecticut consumers should expect from the experts at ISO-New England? Especially in these economic times, ratepayers deserve much better.”

            Governor Rell is also asking U.S. Attorney General Eric Holder to investigate the possibility that the stand-by contracts were deliberately structured to ensure payments to the power companies with little or no risk that they would actually be asked to supply electricity.

            “There is some question whether the power companies that were supposed to be on stand-by even had the assets needed to generate the extra power – and whether ISO-New England knew that,” Governor Rell said. “It is also possible the power companies knew they would not be called upon when they made the deals with ISO-New England.

            “The bottom line is simple: There are far more questions than answers about this case right now,” the Governor said. “Even ISO-New England’s own explanation – that it originally gave bad information to FERC because it did not understand its own data – is so ludicrous it raises more questions than it answers. All of those questions need to be answered, fully and publicly, before this issue can be laid to rest.”