New Haven Independent

As recently as last week, UI was publicly pressing for state permission to boost shareholder profits — a request that would likely have led to a rate hike for customers down the line.

Monday, the company quietly withdrew its request in a letter to the state Department of Public Utility Control. Click here to read the letter of withdrawal, which offers no explanation.

State Attorney General Richard Blumenthal called the move a “stunning reversal” that disproves an argument the company made just 10 days prior.

At a heated sidewalk confrontation on May 8, top company officials publicly declared they needed to reopen a DPUC rate hike case in order to raise UI’s permitted profit ceiling. The company said it needed to increase the profit ceiling above 8.75 percent in order to attract investors to buy stocks. UI made its case before the DPUC on May 11.

Monday, the company decided to abandon that effort and go ahead with an issuance of stock. UI’s parent company, UIL Holdings Corporation, announced Monday it intends to sell 4,000,000 shares of its common stock in a public offering another 600,000 shares to investment banks and other companies.

“They’ve completely lost credibility,” declared Blumenthal Monday.

“They said they couldn’t issue stock without an increase in rates,” he said. “Now they’re issuing the stock but abandoning the effort to raise profits or rates, which they said was essential.”

Blumenthal said Monday’s developments proved that UI didn’t need the financial lifeline it was reaching out for. When UI made its request on March 13 to reopen the rate hike case, it claimed financial duress on account of its parent company’s plummeting stock. But by May 8, Blumenthal said that hardship had passed, because the stock had largely rebounded and the company had shown success in borrowing money.

“It’s just staggering that they could maintain without any factual basis that they needed higher profits and increased rates, and then only days later, completely reverse their position,” Blumenthal said.

A UI spokesman declined comment on the company’s about-face.

Penalties Sought

The change of course happened at a time when the company is on the run. It happened on the eve of a hearing before the DPUC at which Blumenthal intends to unleash a battery of proposals aimed at penalizing the company.

At a 9:30 a.m. hearing Tuesday, the attorney general intends to push for “a formal investigation into why [UI] has slashed spending on operations, capital projects and maintenance — and whether fines and penalties are appropriate.”

“We’re going to be asking for measures aimed at possible illegal cuts in public safety and reliability,” Blumenthal said.

UI spokesman Al Carbone said because of the pending public offering, he couldn’t comment Monday on UI’s change of course on the rate hike case.

Mayor John DeStefano, who blasted UI execs in the sidewalk showdown 10 days ago, reckoned the company didn’t want any more “bad ink.”

“The reason why they’re getting bad ink,” he said, “is they’re making bad decisions.”

As examples, DeStefano cited UI’s abandonment of the toxic English Station site; its decision to move its headquarters out of New Haven in 2012; and its recent refusal to comply with the governor’s request for an extended no-shut-down grace period for ratepayers who can’t pay their bills.

The mayor was one of about 15 New Haveners who headed to New Britain last Monday to fight UI’s request to reopen its rate hike case. Click here to read testimony from the hearing.

And click on the video to witness DeStefano’s outrage at the May 8 confrontation on Church Street.