PA 17-73—sSB 4

Energy and Technology Committee

AN ACT CONCERNING MUNICIPAL ELECTRIC UTILITY COOPERATIVES AND ESTABLISHING A MUNICIPAL ELECTRIC CONSUMER ADVOCATE

SUMMARY: This act requires a municipal electric energy cooperative (i.e., the Connecticut Municipal Electric Energy Cooperative (CMEEC)) to hold its meetings, public hearings, strategic retreats, or similar activities in Connecticut (see BACKGROUND). It also requires CMEEC, its member utilities, and member utilities' municipalities, to post notices, agendas, and minutes for meetings and public hearings on their websites. It requires CMEEC's cooperative utility board to approve, at a meeting, strategic retreats and similar activities.

Existing law requires CMEEC's cooperative utility board to include as members between two and six people from each member utility. The act requires one of those representatives to be a ratepayer appointed by the legislative body of the municipality where the member utility operates. The act includes certain requirements and restrictions on this appointment and makes conforming changes.

The act requires CMEEC to (1) have a forensic examination, conducted by a certified forensic auditor, that includes a review of its revenues and expenditures for the preceding five years and (2) report annually to the Energy and Technology Committee on the forensic auditor's most recent reports, CMEEC's annual report, and employee positions and salaries, among other things.

The act also creates the position of municipal electric consumer advocate to act as an independent advocate for consumer interests in all matters affecting CMEEC's customers, including electric rates. The act describes the consumer advocate's duties, selection, and qualifications. Under the act, CMEEC must pay up to $70,000 for costs related to the consumer advocate in the first year and up to $50,000 in subsequent years.

EFFECTIVE DATE: October 1, 2017, except for the municipal electric consumer advocate provisions, which are effective upon passage.

RATEPAYERS AS BOARD MEMBERS

Under prior law, the governing bodies of CMEEC's member utilities appointed the members of its cooperative utility board. The act requires the board to include one person appointed by the legislative body of each municipality where a member utility operates. For each representative it appoints, the municipal legislative body must prescribe the representative's (1) qualifications and (2) terms of office (both for the original representative and any successors). It must also prescribe and approve the representative's compensation, if any, by either CMEEC or the municipal legislative body. Each municipally appointed representative must be a commercial or residential ratepayer of the member utility operating in the legislative body's municipality. Under the act, the representative cannot hold an official position in, or be employed by:

1. the member utility's governing body,

2. the municipality in which the utility operates,

3. the governing body of any other member utility,

4. the municipality in which any other member utility operates, or

5. CMEEC.

The act makes conforming changes, extending certain provisions applying to member utilities and their representatives to municipal legislative bodies and their representatives. Like member utilities, municipal legislative bodies may (1) reimburse their representatives for travel expenses related to board member services and (2) remove their representative at any time, with or without cause. Like member utilities, municipalities must appoint representatives to the board for any municipal electric utility joining CMEEC, with the same terms and qualifications that apply to existing members. The act also extends to municipal legislative bodies' representatives provisions calculating the number of votes of each representative based on megawatt-hours purchased by the member utility in certain circumstances.

EVENT LOCATION AND POSTING REQUIREMENTS

Meetings and Public Hearings

Existing law allows CMEEC's cooperative utility board to hold meetings and public hearings as it deems desirable. The act requires the board to hold these meetings and public hearings in the state. It also requires CMEEC to post on its website and provide to participants (e.g., municipal utilities) notice of and the agenda for each meeting and public hearing, with any changes, at least five days before the meeting or hearing. The participants must post the information on their websites at least four days before the meeting or hearing and provide it to the municipalities where they operate. The municipalities must post it on their websites at least three days before the meeting or hearing.

Under the act, within five days after a meeting or public hearing, CMEEC must post the minutes on its website and provide them to participants. The minutes must include any actions taken, motions voted, and resolutions adopted. The act requires the participants to post the minutes on their websites within six days after the hearing or meeting and provide them to municipalities where they operate. The municipalities must post the minutes on their websites within seven days after the meeting or hearing.

Strategic Retreats and Similar Activities

Under the act, if CMEEC holds a strategic retreat or similar activity, it must do so in the state. The act requires CMEEC's cooperative utility board to approve, at a meeting, the retreat or activity, including its location, purpose, planned participants, entertainment, and gifts of any value. Under the act, any retreat or similar activity must include meetings to conduct business and must not include any entertainment or gifts other than those the board approved. Under the act, CMEEC must provide the board with an agenda, a list of attendees, and the meeting minutes within five days after the retreat or activity.

REPORTS AND AUDITS

Forensic Examination

The act requires CMEEC to have a forensic examination, conducted by a certified forensic auditor, that includes a review of CMEEC's revenue and expenditures for the preceding five years. The act requires the auditor to submit two reports. One report must include an opinion on CMEEC's financial statements and a management letter. The second must include an opinion on conformance of CMEEC's operating procedures with state law and CMEEC's bylaws and any recommendations for corrective actions needed to ensure conformance.

The act requires CMEEC to post the reports on its website and provide them to participants (e.g., municipal utilities) within seven days after receiving them. Participants must post the reports on their websites and provide them to their municipalities within five days after receiving them from CMEEC. The municipalities must post them to their websites within five days after receiving them from participants.

Report to the Energy Committee

The act requires CMEEC to submit an annual report to the Energy and Technology Committee that includes a list of the cooperative utility board's current members and officers and copies of CMEEC's:

1. most recent annual report;

2. most recent audited financial statements, management letter, and forensic auditor's reports;

3. conflict of interest policy, if it has one;

4. most recently filed IRS form 990, including all parts and schedules available for public inspection under federal law; and

5. bylaws.

Additionally, CMEEC's annual report to the committee must list each employee's position, salary, wages, and fringe benefit expenses.

MUNICIPAL ELECTRIC CONSUMER ADVOCATE

Establishment and Cost

The act establishes the position of municipal electric consumer advocate to act as an independent advocate for consumer interests in all matters affecting CMEEC's customers, including electric rates. Under the act, CMEEC must pay for costs related to the consumer advocate, including hourly fees and necessary expenses. The act limits such costs to $70,000 for the first year and $50,000 for each subsequent year, unless the consumer advocate demonstrates a substantial need and CMEEC's board approves it.

These provisions of the act do not prevent any interested person, including individual consumers or groups of consumers, from participating in any CMEEC meeting or hearing on their own behalf or through counsel.

The act requires CMEEC to promptly adopt any necessary changes in its rules, regulations, or other governing documents to carry out the act's requirements concerning the consumer advocate.

Duties

The act allows the consumer advocate to appear and participate in CMEEC matters or any other federal or state regulatory or judicial proceeding that may involve CMEEC customers. Under the act, in carrying out his or her duties, the consumer advocate:

1. has access to CMEEC's records and the right to make a reasonable number of copies of them;

2. may ask CMEEC's technical and legal experts for assistance; and

3. has the benefit of all other CMEEC information, except employment records and other internal documents not relevant to the consumer advocate's duties.

Selection and Qualifications

Beginning in 2017, the act requires the consumer counsel to select the consumer advocate before November 1 in each odd-numbered year for a two-year term to start on the following January. The act allows the consumer counsel to terminate the consumer advocate before the two-year term for misconduct, material neglect of duty, or incompetence.

Under the act, the consumer advocate must be a member of the state's bar with private legal experience in public utility law and policy. He or she must not have any conflict of interest under the Rules of Professional Conduct in representing CMEEC's consumers as a class. Under the act, the advocate must be independent of CMEEC's board and cannot be a CMEEC board member. CMEEC's board cannot remove the consumer advocate for any reason, and the act prohibits the board from directing or overseeing the consumer advocate's activities. CMEEC's board must cooperate with the consumer advocate's reasonable requests to enable the advocate to effectively perform his or her duties and functions.

Reports and Public Forums

The act requires the consumer advocate to prepare reports of his or her activities concerning CMEEC and, at the end of each calendar quarter, submit the reports to (1) CMEEC, (2) the chief elected official of each municipality where a CMEEC participant operates, and (3) the consumer counsel. The act requires CMEEC and the consumer counsel to post the reports on their websites.

The act also requires the consumer advocate to hold a public forum annually on the second Wednesday of October to describe his or her recent activities and to receive consumer feedback. The forum must be held where CMEEC holds hearings. The act requires CMEEC to publicize the forum (1) through an announcement at its preceding scheduled meeting, (2) on its website, and (3) in a notice on or attached to its consumer bills. The act allows the consumer advocate, if he or she deems it necessary, to hold additional public forums.

BACKGROUND

CMEEC

Among other things, CMEEC procures power for its member municipal utilities, which include Bozrah Light and Power, Groton Utilities, Jewett City Department of Public Utilities, South Norwalk Electric and Water, Norwalk Third Taxing District, and Norwich Public Utilities.