Friend’s Vectren Petition Downloadable PDF

1. In 2008, after some characteristically hard-nosed rhetoric, Connecticut Attorney General Richard Blumenthal announced he had prevailed upon the Connecticut Department of Public Utility Control to force utilities in the state to reveal the compensation paid to their top executives.

   Turns out, there was a loophole in the state’s order big enough to drive a utility president’s salary through.

   Connecticut Light & Power has done just that, asserting that the order only requires the utility to disclose its parent company’s top salaries, which were already public, not those of its own president, Jeffrey Butler, and other executives.

   A review by the Hearst Connecticut Media Group of disclosure forms filed with the state shows that in 2010 CL&P reported the pay of Northeast Utilities’ executives, but not of its own officers. The Yankee Gas Company, another NU subsidiary, also reported the salary of NU’s executives on its disclosure form. None of those executives run the local companies on a daily basis.

   United Illuminating is also reporting the names and salaries of executives who run its corporate parent, UIL Holdings. But unlike CL&P, those officials are the same people who run the New Haven-based electric utility.

   The 2008 order issued by the then-Department of Public Utility Control issued an order requiring that “each public utility …. shall provide to the Department its executive and officer compensation in the agreed upon format” and that “all officers of the utility at the vice president level and above” must be included on disclosure forms.

   But the “format” established by the DPUC allowed utilities to disclose only salaries reported to the federal Security and Exchange Commission under rules regulating publicly traded companies. NU and the other parent companies already report their top salaries to the SEC and exclude the salaries of presidents and others at the various subsidiaries, like CL&P.

   “At first blush, it sounds like it’s not in compliance,” said state Sen. Bob Duff, D-Norwalk, vice chairman of the Legislature’s Energy and Technology Committee. “If there is an order, it should be complied with.”

   George Jepson, who succeeded Blumenthal as Connecticut Attorney General, defended the order.

   “The decision in this case was a good one, and has been successful in providing Connecticut’s utility customers an easily accessible way to find and compare the compensation … of the state’s top utility executives,” he said. “For a company as large as NU, this format will not cover every corporate executive individually. It does give the public a good indication of how much each company is spending on officer and executive compensation.

   To explain its decision, DPUC’s commissioners in 2008 wrote that, “This proposed standardized reporting format, that is very similar to the SEC filing, was the result of collaborative efforts of the companies, (the Office of Consumer Council) and (the Attorney General) because they believed that it would provide Connecticut ratepayers with consistent and easily understandable compensation information.”

   There is no mention of salaries paid to the local subsidiaries, like CL&P, in the disclosure order or decision.

   CL&P has been the focus of statewide criticism after it took 10 days to restore power to all of the 670,000 customers left in the dark last month after Tropical Storm Irene. A Legislative committee and Gov. Dannel P. Malloy are investigating the utility’s response to the storm.

   CL&P’s most recent salary disclosure form lists Charles Shivery as chairman, president and chief executive officer, and notes that his total annual compensation is $8.2 million. The document is entitled “Annual compensation of officers and directors of Connecticut Light & Power Company.” Four other NU officers are also listed on CL&P’s form, with salaries ranging from $4.9 million a year to $2.2 million. Yankee Gas, in an identical form, submitted the same list of NU executives.

   Shivery is not president of either CL&P or Yankee Gas; he’s president and CEO of NU. Jeffrey Butler is president and CEO of CL&P. Three others, Kenneth Bowes, Robert Hybsch and William Quinlan, also hold top positions at CL&P but their salaries are not disclosed on the state form. CL&P declined a request by Hearst Connecticut Media Group to reveal Jeffrey Butler’s pay.

   The DPUC disclosure order is the result of a petition filed by Blumenthal, now a U.S. senator. At the time, Blumenthal complained about high pay at the utilities and wanted a method of disclosing that compensation to the public.

   “Ratepayers deserve to know what utility company executives and officers are earning and how much of that compensation they are paying for,” Blumenthal wrote.

   “Electric and gas consumers — many losing jobs and homes — are compelled to provide pay raises to utility executive millionaires,” Blumenthal said in a press statement when he filed the request with the DPUC. “These compensation disclosures should drive reform, and energize consumers who have endured rate increases over the past year.”

   Blumenthal said he still believes executive compensation should be made public. “I continue to believe that disclosure of compensation of the most relevant decision makers is important both for regulators and consumers,” U.S. Sen. Blumenthal said.

   Blumenthal did not explain why compensation for the local executives who run the subsidiary was excluded from the DPUC order. Officials at the Public Utilities Regulatory Authority, successor to DPUC, also declined to offer an explanation.

   Mitch Gross, CL&P’s spokesman, said, “The names and titles of those officers whose compensation is not required to be publicly reported in the Northeast Utilities proxy or utility 10-K are not publicly reported but the compensation for all such officers is identified in the document as `Officers 6 through 23.”

   That line, entitled “Officers 6 through 23,” is an aggregate amount for the salaries, totaling $11.2 million in CL&P’s 2010 disclosure form and $10 million on the Yankee Gas form. No names are assigned to those figures so it’s impossible to tell who makes what.

   Gross did not respond to a request to explain why CL&P won’t disclose the salaries of its executives, such as Jeffrey Butler.

   In its 2010 report, UI reported that James Torgerson as president and CEO, earning $2.2 million in total compensation. Torgerson is president and CEO of UI and also holds the same position with the parent company, UIL Holdings.

   Four others are also listed on the UI’s form: Anthony Vallillo, president and CEO, $1.4 million; Richard Nicholas, vice president, $994,479; Linda Randell, general counsel, $786,873; and Steven Favuzza, vice president, $547,409. All of those officers hold the same positions with the parent company.

   UI also reported the compensation of its board of directors, which ranged from a high of $164,438 for John Lahey to a low of $59,705 for Marc Breslawsky. The state order requires the names of trustees if ratepayers fund any portion of their salary.

   Southern Connecticut Natural Gas, a subsidiary of UI, reported the same list of executives to the state as UI, but the salaries are much lower. For example, Torgerson earned $278,830 as president of SCNG.

   Connecticut Natural Gas Company, also a UI subsidiary, reported Robert Allessio as its president and CEO and that he earned $896,533. William Reis is listed as a vice president, $327,008; Tim Kelley, vice president, $181,160; and James Earley, controller, $253,796.

2. As the article Pressanykey has posted shows, large monopolies such as Connecticut Light & Power and dare I say Vectren; work very hard at hiding many items they know we minions will complain about. The allowed profit percentage seems to be the holy grail of Vectren & other monopolies, which are based on allowed expenses, more allowed expenses = more profit = higher dividends! There are always ways around reining in these large companies with huge staffs of lawyers, but I offer this suggestion. Unless a salary is posted it is not a deductable expense nor can it be used in the convoluted calculation which is used to figure allowed profit. Secondly there should be a salary cap which can be used in the profit margin calculation, the monopolies can pay as high a salary as they choose, but the overage as well as all bonuses would come directly out of calculated profits before it is paid out as dividends to its share holders.

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