Showdown On Church Street
by Melissa Bailey | May 8, 2009 3:22 PM | Permalink | Comments (39)
The latest dispute between New Haven and United Illuminating sparked a heated face-to-face confrontation over unfinished business, as two UI execs crashed a press conference at their doorstep.
Mayor John DeStefano and Attorney General Richard Blumenthal held a press event outside UI’s downtown headquarters Friday morning to protest the company’s request to boost shareholder profits — a request that will likely lead to a rate hike for customers down the line.
At a hearing Monday, the Department of Public Utility Control will hear oral arguments on a motion to reopen UI’s rate hike case.
Blumenthal and DeStefano plan to face off with UI execs at the hearing, which is set for Monday at 11 a.m. at the DPUC headquarters at 1 Franklin Sq. in New Britain.
They didn’t plan on Friday’s fight, which laid bare a frayed relationship between the City of New Haven and an institution that has been in the city for 116 years.
“Dumb Growth”
At 11 a.m. Friday, the mayor set up a podium outside the UI headquarters at the Connecticut Financial Center at 157 Church St., right next to City Hall. He and Blumenthal protested UI’s request for a higher cap on profits, as the company slashes its management and operations budgets. The company Tuesday unveiled plans to defer about $60 million in maintenance and infrastructure work.
“We need to show this company there are limits to greed in Connecticut,” declared Blumenthal.
DeStefano seized the opportunity to link the current fight to a past one: UI’s plan to abandon its downtown New Haven corporate offices when the lease expires in 2012, and centralize its offices in a new corporate office space in Orange. The mayor has blasted the move as counterproductive to smart growth and transit-oriented development.
If UI is hurting for capital money, the mayor argued Friday, it should abandon its relocation plans.
DeStefano was backed up in this criticism by Secretary of State Susan Bysiewicz, New Haven State Sen. Martin Looney, Branford State Rep. Lonnie Reed, Fairfield County’s state Sen. Anthony Musto and members of the Connecticut Fund for the Environment and Fight the Hike. They called the move “dumb growth.”
The press conference drew a slew of cameras, citizen activists, aldermen — and UI administrators, who sat quietly as the accusations flew. Then DeStefano, visibly red in the face with anger, called on two top executives to take the mic.
They did.
“Let’s Go Right Now!”
Jim Torgerson, CEO of UI, and Anthony Vallillo, president of UI, defended the move as being in the benefit of all ratepayers in the state. The move would eventually save customers $25 million over 20 years, said Vallillo.
The conversation quickly devolved into a yelling match.
Vallillo argued that the taxes on UI’s infrastructure, including its poles and substations, would still flow to the city — “no matter where we’re located.”
Yes, jumped in DeStefano — “with all the intended pollution.” He was referring to English Station, an old UI plant in Fair Haven that the company got rid of in 1999. The site remains a toxic brownfield, according to the mayor.
“You gave it to someone with no liabilities and ability to rehab it and took your profits and left a dirty site in a neighborhood where thousands of children live,” said the mayor. “So let’s go over right now, Tony, with Jim, to English Station, and show you what you’re leaving to the City of New Haven. We’ll go right now, with all of these cameras.”
“It’s not an operating plant, hasn’t been for years,” objected Vallillo.
“You cut it loose,” charged DeStefano — “like you cut loose your customers and like you’re cutting loose the people who can’t access a car to get to work.”
Click on the video at the top of the story to watch the full exchange.
The UI duo said that in downtown New Haven, employee parking is expensive and downtown stoplights are not well-coordinated. The new digs in Orange will have plenty of parking, they said, and would be near a new train station that’s proposed for Orange. DeStefano shot back that a new train station would come only out of the pockets of state taxpayers.
At one point, the mayor went over to a crowd of a dozen supporters and got them to start chanting, “Fight the Hike!”, drowning out the UI execs’ comments. DeStefano personally tore into Vallillo, accusing him of driving a Jaguar and living in Orange. (Vallillo denied the latter charge.)
Customer “Ultimately” Pays
At the podium, Torgerson also defended his company’s motion before the DPUC — then admitted the cost of the request would inevitably fall on customers’ laps.
“We’re not asking to increase [electricity] rates at this time,” explained Torgerson.
Following months of public protest, the DPUC in February issued a final decision rejecting UI’s request for a $81.1 million, two-year rate hike. Instead, the DPUC ordered UI to pay its customers a one-time reimbursement totaling $970,000. It also lowered the ceiling on UI’s permitted rate of return on equity from 9.75 percent to 8.75 percent.
UI is asking the DPUC to revisit that decision. The company made the request in a March 13 letter, at a time when the stock of its parent company, UIL Holdings, had plummeted by 40 percent since Dec. 31. The letter argues that the cap on the return on equity is hurting the company’s ability to attract shareholders and raise capital. (Click here to read the letter.)
Torgerson said that this time, instead of asking to raise customers’ electric rates, the company is asking only for the DPUC to raise its permitted profit ceiling. At 8.75 percent, the ceiling is the lowest of its kind in the nation, he argued. He said the company has an obligation to provide sufficient returns for its shareholders, and needs to raise the ceiling in order to do that.
He didn’t mention that since he wrote the letter, the stock has largely rebounded, delivering a 45 percent increase in profits for the first quarter of this year compared to last. Torgerson also didn’t mention, at first, that raising the ceiling on profit margins would eventually be passed on to the customer.
He was later pressed by a reporter on how the company planned to raise profits without adding to customers’ monthly bills. Torgerson replied that the company wouldn’t ask for a rate hike right away, because of the economy, but would likely do so down the line.
“Ultimately, you would be paying for that, yes,” he said.
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Comments
Posted by: Alphonse Credenza | May 8, 2009 3:41 PM
DeStefano wants it his way. With extra (limburger) cheese.
UI can do what it damn pleases, especially if it cuts my bills.
The nerve of the Mayor -- it's as if the city government thinks its entitled to control.
Posted by: William Kurtz | May 8, 2009 4:05 PM
Did you even read the last paragraph, Alphonse? Torgerson basically made the equation crystal clear: shareholders want more profit=you will pay higher bills.
Posted by: Local | May 8, 2009 4:22 PM
King John is an embarrassment. When is he going to stop blaming his problems on others? He's a bully ... We need new leadership in New Haven, not a dictator.
Posted by: eddie | May 8, 2009 4:31 PM
What UI's asking for is a higher limit on profits. Right now if the company makes more than 8.75 percent profit from its regulated activities, it has to return that money to ratepayers.
Posted by: norton street | May 8, 2009 4:35 PM
alphonse,
do you believe that little pieces of green paper are a fair trade for energy that can not be replaced? the amount we pay for energy is minuscule when compared to what we're actually paying for: something that once its gone, doesn't come back. unless you've managed to grow energy in you back yard, id be happy that american citizens pay so little for energy. although, if it did cost somewhere closer to the true price, we would probably have to change our living arrangements to conform to my opinions, which seems to be the opposite of what our country will continue to do for several more years.
Posted by: J | May 8, 2009 4:46 PM
DeStefano is funny....He should try out for American Idol.
Posted by: visitor | May 8, 2009 4:51 PM
could you please repost the video? it will not play all the through!
[Editor's note: There appears to be a quirk that I think comes from the YouTube code. Most people can play the video, but on certain browsers it gets stuck. I found that my version of Firefox couldn't play it, but Safari did. I recommend trying a different browser... Paul.]
Posted by: Paul Wessel | May 8, 2009 5:23 PM
Mayor gone wild. I love it!
Posted by: Really Local | May 8, 2009 6:20 PM
I encourage "Local" (though I am going to guess you, too live in Orange) to reread the article and get some perspective. The people who are getting screwed here are the customers because of the greed and utter recklessness of a company that doesn't care about the environment, the poor, this city and its residents and customers. Note the line up of notable leaders who have taken a strong stance in opposition to the mad scheme that UI is trying to hatch. We know you are a HATER, but to use this issue to push your agenda is silly. We should all be standing behind the Mayor on this one.
Posted by: East Rock | May 8, 2009 6:24 PM
John - You are embarassing. As I have said before this city is run like the Mafia. If you are in John's good graces you get whatever you like. But lookout if you are not, because he will punish you as much as he can. Any big company thinking of coming to New Haven that sees that video will surely turn tail and run.
Posted by: City Hall | May 8, 2009 6:50 PM
-OUT OF CONTROL, KING JOHN HAS GOT TO GO!!!
Posted by: cedarhillresident
| May 8, 2009 7:51 PM
OK people I am with you on alot of your thoughts but when watching this video I saw something that should really be addressed. We have the UI sticking us with the bill. Johnny Boy had every reason to be yelling. And I personally am glad he got his balls back enough to yell at him. They left us with the bill whether the tax payers of New Haven or as state tax payers!! The rape us on our bills and just resently try to go up even more and now they are moving and trying to get us to pay for it please!!! And then that women at the end thinks she made a point about the parking!!! WTF you took the dang job knowing what the cost of parking was going to be!!! Please lets bring the soil from the brown field in trucks and dump it in their back yard!!!
Posted by: True New Havener | May 8, 2009 9:29 PM
Our Mayor kicking butt on corporate thugs!!!
Yippee!
As to all of you haters -- when you support UI which charges the highest electricity rates in the country, you are clearly insane in your desperation against DeStefano. For people who get your news for free you sure do love to pay for your electricity!!
The only place with rates comparable to UI is Hawaii where they have to BRING THE FUEL IN ON SHIPS!!!
He is right -- UI is despicable and has fleeced ratepayers and taxpayers for so long.
If you like being abused and giving your money to a bunch of UI corporate goons, why do you complain so much about taxes?
And UI's dumping English station on low income people should be exposed for what it is -- suburban wealthy hate for a working class urban neighborhood.
KICK UI's BUTT -- Find every way possible to make them pay up.
I Say Elect DeStefano and then get him to run in Orange to make UI's life absolute hell there too!!!
Lower my rates!! DeStefano for Orange!!!
Posted by: Power to the People | May 8, 2009 9:38 PM
This makes me proud of being a New Haven resident. Go, John,Go!!! Thank you for standing up for the little people and calling UI out on its shameless thievery and environmental racism.
Those whiny suburbanites complaining about parking are as pathetic as the UI leadership.
Posted by: City Hall Watch | May 8, 2009 9:53 PM
DeStefano has been steps away from UI HQ for how many years now? Could he not have gone over there to discuss the mothballed power plant? Staying in New Haven? That's too much to ask, I'm sure. Having said that, press conferences like this one are low class and remind me of what John does to everybody with whom he crosses swords. New Alliance; YNHH; Chapel Street property owners. While UI has no soul and complete disdain for its customers, the company is in good company with DeStefano. He has the same disregard for us too. Taxpayers, homeowners - we're at the mercy of both UI and DeStefano when it comes to taxes, to rates to monopolies. We are ill served by all of them.
Note to Looney and the other state pols: All of you have been in office for years and were part of the group that screwed rate payers with your grand plans on deregulation. The way the power grid is stacked works against consumers and you know it. Yet, you refuse to fix it. Shame on all of you. Quit giving people lip service and get to work fixing this mess.
Blumenthal: Glad you're off the panty raid on CL but I would suggest you find better company when it comes to beating up UI.
Posted by: cedarhillresident
| May 8, 2009 10:37 PM
ps it is time to get our own electric plant like Wallingford!! Hey UI want to be this way then lets stop doing bus. with them!
Posted by: Westville Mom | May 8, 2009 10:43 PM
You all seem to be blissfully unaware that you can choose your electricity supplier. Go to the UI website and click on "Choose An Electric Supplier" on the left. I have switched to ConEdison and it is much cheaper. It still gets funneled through and billed by UI, but there is a substantial savings. It requires a simple phone call. Easy as pie. As for those of you who insist on "clean" energy (I would, too, if it were cheaper)--you can get that, too. You're just going to have to pay through the nose for it.
As for "Norton Street's" comment about American citizens paying "so little" for energy ... are you kidding? My electric bills this past winter were higher than my gas bills and my house has gas heat, gas dryer, gas hot water heater, and gas range. Electricity is through the roof---highest in the country. Drill, baby, drill.
Posted by: Killer Watts | May 8, 2009 10:53 PM
I think someone is in desperate need of electric shock therapy.
Posted by: new havener | May 9, 2009 7:18 AM
well mayor, i think that you little temper tantrum solved a lot... (hint) not everyone wants to deal with your over inflated ego.
you condemn those that leave new haven (business and residents) and never look to fix the reasons why. pay attention to the reasons, fix them, and maybe, just maybe, people and businesses will stay. But, you'll probably never see that. You'll probably look at the few short term positives, (yes, i will agree with you that we do have some positives), but you'll most likely ignore the bigger issues that create long term results. Instead, you will continue to tax us to death (I will be paying over 9k in property tax when your phase in is complete), and then at some point leave office (hopefully) and then we will truly find out that we have the largest debt of any CT city and the house of cards, that will be your legacy, will come tumbling down on all of us.
Goob job!
Posted by: Alphonse Credenza | May 9, 2009 9:14 AM
It is a business, not the March of Dimes. Shareholders want more profits -- and you, if you were a shareholder, would not? But higher profit doesn't necessarily mean prices go up. Please show me how you justify your equation.
&&&t
"the amount we pay for energy is minuscule when compared to what we're actually paying for: something that once its gone, doesn't come back."
This is fatalist enviro-speak. It comes from an unjustified fear of lack as well as a sad conviction in the fragility and instability of all physical life. All falsehoods!
Posted by: Paul Wessel | May 9, 2009 10:04 AM
The Mayor's anger here reminds of me of a press conference he held in front of New Alliance Bank some years back. Holding his New Haven Savings Bank passbook (which we all used to get in 4th grade), his New Haven Savings Bank mortgage, and (if I remember correctly) his New Haven Savings bank college loan documents for his kids, he was decrying the transfer of an asset, developed through a concentration of funds from working families, to a small group of investors. In both cases, the functions of key public institutions (and historically good corporate citizens of New Haven) are becoming subsumed to the interests of their owners. To those critical commenters above, isn't this what we want our elected leaders to be speaking out about?
Posted by: Charle O'Keefe | May 9, 2009 1:00 PM
I agree with what the Mayor is saying, but I am shocked by his performance here. He is sending out such an anti-business message that this will effect the citys economic growth for years to come. I really do think he should resign on Monday morning.
Posted by: Steve | May 9, 2009 1:46 PM
The points that are important to the UI customers are lost in the "Embarrassing Knee Jerk Responses of Mayor Johnnie" This is not the character and tone that a city like New Haven needs to be projecting through it's leaders.
Look at the other superlative leaders for our city like Sen Martin Looney smirking to the crowd right along with his hero. This is a total embarrassment. The issues are lost in the "Big Egos".
This explosion or "Going Berserk" display is what we have had for 12 long years and more,if you recall him as the "Czar" of the tennis tournament and creating a yelling and screaming match with the State.
Point is the we can see positive change with new leadership at the Federal level and New Haven needs new leadership in City Hall and the State Legislature to prosper and grow and be a place of harmony, growth, progress and mutual respect for all.
In politics tenure without limits leads to this mess.
My solution, get rid of the "Screaming MiMi Mayor and Marty the puppet show" and let's get to the real purpose of represntative government not bully pulpits and thrones.
My vote is put them in the OUTHOUSE!
Posted by: blue dog democrat | May 9, 2009 7:43 PM
What I wish for, and probably others as well, is a City that is run correctly. One that entices businesses and residents that wish to be here, and given a reason to want to stay. This City has been destroyed from the core and there are very few options that can restore it to health. I don't blame UI for leaving, as almost 20% of the houses in New Haven are for sale (or foreclosure) and there is very little reason for staying.
JDS has no authority over UI and that is what angers him so. He cannot bully them and that is why he brought in Blumenthal, because in this instance, he is as emasculated as he appears. My daughters act the same way when they are upset, and I really wouldn't want them to be my mayor either.
Posted by: Election Year Again | May 9, 2009 9:56 PM
This is low grade electioneering. Only 12 supporters were protesting out of a 130,000 population in the city. Were they really concerned citizens or actors rented out for the protest. Did any of the reporters bother to talk to them.
Posted by: Tessa Marquis | May 10, 2009 10:58 AM
I see righteous anger here, nothing "out of control" about it.
Bottom line: UI will go to any lengths to raise rates, even including building a new structure in Orange that is nowhere near any train station.
Proposals are not Train Stations, dudes. The proposed parking garage near the Milford train station was a canard invented by the Mayor of Milford four years ago. It ain't happening, and a train station in Orange is still just an idea inside a plan inside of a wishlist inside a burrito.
Posted by: cedarhillresident
| May 10, 2009 11:47 AM
Election Year Again
Last hearing for the rate increase there were at least 100 rep's from every community in New Haven, each of those reps' were there on behave of 100's of working familys that do not have time to least there jobs to protest because they have to pay their UI bills! Not only where there rep's from New Haven but from it's surrounding city's! This meeting was mid day Friday We THANK THE 12 rep's from Fight the Hike for being there to Protest for us!!
Posted by: Martin Dilauro | May 10, 2009 12:39 PM
Mayor deStefano is rewriting history. In 1999 UI sold English Station to a group of investors. They were going to convert it to pollution free gas firing and compete in the deregulated market. Henry Fernandez gave his support. A small group of abutting property owners objected to the project which would have brought many new jobs to New Haven. As it was election year the city pandered to the objectors and reversed its support. Behind the scenes polliticking then killed it as we could not get permits. If English Station operated today there would be competition for UI and lower electricity rates for all.
Posted by: Jon Doe | May 10, 2009 2:11 PM
Mayor Johnny is upset that the UI left English Station in Fair Haven a mess when they left the site in 1999. If the mayor new about this site in the past 10 years, why hasn't he or the city gone after the UI in the past 10 years to clean up the site ???
My thought is the site was OK with Mayor Johnny till the UI said they were moving to Orange. Mayor Johnny was willing to look the other way as long as Mayor Johnny gets what he wants. He doesn't care about he thousands of KID'S in the area. He's let it go on this long.
Mayor Johnny should put as much energy as he did outside UI's downtown headquarters Friday morning trying to attract companies to New Haven then putting on a sideshow like he did on friday. But I will say it was FUNNY to watch him in action, NOW he knows how it feels to have someone just brush you off. Like he has done over the years.
TO Melissa Bailey can you explane to me how the UI execs crashed a press conference at their doorstep. The Mayor set it the press meeting up on there front door. Now if he had moved it down one door i could understand using the term crashed. But what happend was the Mayor set a trap using the media as bait and they couldn't resist the light of the camera's.
Posted by: Alphonse Credenza | May 10, 2009 7:19 PM
"...and environmental racism"
This is a new one.
Posted by: Ben Ross | May 10, 2009 8:03 PM
Cool ...heat and light. UI ...re-regulate...and buy
it back, community stake holders ownership. John D is kinda funny....actually doing his job ...objecting to big muscle stepping on the citizens...his arguments are not great ...his passion is right on.
Posted by: visitor | May 10, 2009 9:30 PM
look at all the good little servants defending those pillaging them--and at their own expense! Hegemony at its finest!
On a less "in your face" note, last time I checked it was mostly middle and upper middle class peeved at the ridiculous rate increases, including people in the suburbs...sooooo, either the posters here really are that immersed in someone else's self interest or they are so blinded by their hate of the mayor that they will make illogical arguments.
where i am from, we'd be happy to have a mayor that is capable of looking at the big picture and making the city a better place. let alone something like this. destefano plays ball with corporate interests and has done so to benefit the city, but he has boundaries and wisely, in my opinion, takes a stand instead of bowing down. i think it is important to have a leader who makes a public statement like this. however, when the people don't even care...its scary....
Posted by: City Hall Watch | May 11, 2009 7:07 AM
Blue Dog: I agree. All we want is a city that is run well; that promotes jobs, business and real economic development; that respects those who pay outsized taxes as much as it does those who don't. To have so much potential and squander it, is really a shame.
Paul: I'd like to see a follow up story on the abandoned power plant, the history and what exactly happened when this property was sold by UI.
Posted by: Henry Fernandez | May 11, 2009 9:33 AM
To Mr. Martin DiLauro,
Please stand corrected. I opposed the English Station transfer as well as the proposal by the new owners of English Station to re-start the plant. I did so aggressively, intentionally, and publicly both inside City Hall and in the community.
This included (among many other things) meeting with the developers and explaining why the City would oppose their position, going to community meetings, and encouraging City and public testimony against the restart. I think it would be fair to say that inside City Hall I was among the earliest and loudest opponents of restarting the plant.
I am taking the time to explain this now for the same reason that I fully engaged on this issue then. I saw the restart of English Station as the worst kind of corporate environmental disaster. This was for several reasons:
1. I believed UI laid off its obligations to clean up the site on a single purpose entity it had little reason to believe would actually complete the environmental clean up. While UI retained some obligations, the risk was too great in my mind. Time would prove this view to be accurate.
2. The plant was to be used for peaking purposes. This meant that it would only be used on the hottest days when asthma and other health risks were already elevated.
3. It was located in a working class neighborhood in direct proximity to several public schools where children already had elevated asthma risk. As well, thousands of children and senior citizens live within blocks of the plant.
4. The plant was only capable of using heavier oils which were particularly risky from an environmental perspective. There was no reason to believe it would be converted to natural gas or any other cleaner use.
As a resident of Fair Haven, I pass by English Station daily. That UI has never stepped in to find an environmentally friendly reuse of this property is shameful. It remains a blight on the waterfront of our city and my neighborhood. At least it is not belching toxins into the air.
Hopefully that clarifies my position.
Henry Fernandez
Posted by: Local | May 11, 2009 10:07 AM
Really Local:
Actually, I live in New Haven and am sick and tired of people such as you enabling the DeStefano machine. I don't hate...just don't like paying astronomical taxes (many times my electric bill, by the way).
Posted by: Bruce | May 11, 2009 11:07 AM
Martin, you are partly correct regarding the English Station. UI was legally required to sell the plant ("deregulation" forbids the former utilities from producing electricity). I don't recall Henry Fernandez specifically supporting the project, but it did get a letter of support from 5 aldermen. I believe this support was mainly due to the fact that Mark Minnenberg, a well-connected New Haven Democrat, was a partner in the firm at the time. After he left the company, city hall turned against the project and put the final nail in the coffin.
Quinnipiac Energy initially wanted to fire up the existing 60 year old oil boilers using #6 oil (the dirtiest available) to create a peaking facility. Eventually they would build up the capital to install gas turbines on the site. The DEP denied their application and they have since sold the plant to Evergreen Power LLC, who wants to install fuel cells. I don't know if they've made any progress.
UI is still on the hook for the cleanup, even though they paid QE to clean up the site. The work was never done and the money has mostly been spent, but I believe under state law the original polluter is forever responsible. The shareholders are the ones who are getting screwed as they will likely have to pay twice for the cleanup. I would love to know where that money went.
I wrote about this a couple years ago on my blog, if anyone is interested.
http://ctenergy.blogspot.com/2007/02/english-station-clean-up-fund.html
Posted by: Westville Mom | May 11, 2009 3:13 PM
I would also like to see a more in-depth article on the English Station. The mayor's tardy rage should have been channeled years ago into advocating for adaptive re-use of that site, rather than the sale going toward its conversion to a gas-fired plant. That site has NO business being used ever again as a power plant. It is too valuable as an inner-city gem with enormous potential in the midst of dense residential areas.
Question about UI's responsibility---did Macy's have to pay for the asbestos clean-up of its former site? Just wondering. Seems like with all these trillions of "stimulus" dollars, there should be a few measly million for this brown site clean-up.
By the way, I personally know someone whose firm was headquartered in a former electric power plant down in N. Carolina --- and there are plenty of other such examples. SOME people seem to be able to accomplish this kind of thing.
Cedar Hill--I agree that we should generate our own, but NIMBYism will prevail everywhere in CT. Unfortunately, we will continue on this path of smarty-smart "smart" grids outsourcing production all over the place which will leave us in the lurch when 1)the next huge coronal mass ejection occurs or 2)Kim Jong Il detonates a nuclear bomb over our heads or 3)some Einstein over in China hacks into our supposedly super-secured computer system.
What this city needs is some back-to-basics horse sense. (Oops, I forgot you folks hate those Sarah Palin-types.)
Posted by: ezcuinkle | May 12, 2009 9:48 AM
Good for you Mayor and more thanks to the Lady who says about the money that she is paying every time for parking at the UI building...
Posted by: Dick Augur | May 15, 2009 7:32 PM
What the folks in Connecticut are not aware of is that your DPUC is funded as a percentage of the revenues collected by the utilities they regulate. They are not funded out of your tax payer dollars. They will pass the rate increase because it is in their self interest. Kind of gives new meaning to checks and balances in government oversight.
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