February 27, 2007

BILL AIMS TO CURTAIL COSTS TO RATEPAYERS

By Angela Carter, Register Staff

HARTFORD — The United Illuminating Co. would not be able to pass on its consolidation costs to ratepayers under a bill proposed by Rep. Patricia Dillon, D-New Haven.

Dillon proposed House Bill 5016, An Act Concerning Electric Utility Rates, in November, in an attempt to block UI from recapturing relocation costs from New Haven ratepayers if the company were to move, which Dillon said Monday would hurt the Elm City’s tax base.

UI has five facilities in the region, and its headquarters is at 157 Church St., New Haven.

"I really felt that New Haven ratepayers shouldn’t have to pay twice," she said.

"A lot of properties in New Haven are (tax) exempt. We need to maintain a private sector, we can’t be dependant on the state. It’s unsustainable for a city to be held captive to a political process in Hartford," she said of state budget procedures.

The bill, if passed, does not specify UI, but would "prohibit the Department of Public Utility Control from setting electric utility rates that include the cost of relocation."

UI presented a plan to the DPUC in 2005 for consolidating into a central facility and in that rate review based its distribution rates at a lower level, anticipating a relocation when its leases expire in 2012.

During the General Assembly’s Energy and Technology Committee’s public hearing on Dillon’s bill earlier this month, Michael Coretto, director of regulatory strategy and retail access for UI, opposed the legislation, saying it would hinder UI’s or any other regulated company’s ability to analyze, manage and control operating expenses.

"Passage of this bill would overrule (DPUC’s) acceptance of UI’s prudent business decision, taking into account all customers’ interests and would actually raise costs, and rates, to all UI customers," Coretto said.

In November, Bayer Healthcare’s German parent company, Bayer AG, announced the company would leave West Haven within 12 to 18 months and relocate its research headquarters to New Jersey, turning down $60 million worth of incentives offered by the state.

West Haven’s Economic Development Commission asked UI to consider occupying Bayer’s 17-building campus.

Utility company officials have confirmed that they looked at sites in Milford and at the West River Crossing development site in West Haven.

West River Crossing LLC had been negotiating with UI to occupy the harborside site but a predevelopment agreement expired before the parties could strike a deal.

UI spokeswoman Anita Steeves said Monday the company has not made any final decisions on a new location.

"We’re still exploring all options," she said.

Angela Carter can be reached at 789-5614 or acarter@nhregister.com.