Malloy Finds His Calling; CL&P Tries to Keep Up... (for Corp. execs and shareholders)

by: jonpelto

Wed Aug 31, 2011 at 12:11:16 PM EDT

Surveying the damage from Hurricane Irene, Governor Malloy's 80-minute flight on a UH-60 Blackhawk served as the perfect backdrop and reminder that Connecticut's Governor was in charge and mobilizing a historic response to a major storm.

In seems almost ancient history now but if former Governor Thomas Meskill holds the record on how not to deal with a storm (he didn't want to leave his skiing vacation in Vermont when a major winter storm hit Connecticut and ended up not seeking re-election which in turn ushered in the election of Ella Grasso), Malloy has clearly positioned himself at the opposite end of spectrum and will go down in history as the epitome of what a chief elected official can and should do.

Giving credit where credit is due, Malloy has done a great job mobilizing every resource and proving that a state leader and state government can make a different. Quite frankly, it provides us with a glimpse of what happens when Candidate Malloy steps into the Governorship.

While Malloy's approach is a tough act to follow, Northeast Utilities and CL&P seem to be trying hard to play a fairly good game of catch-up.

There is no doubt their rank and file employees are working above and beyond the call of duty and the utility company's leadership seems to be making a major effort to rise to the occasion.

Of course, ratepayers will end up paying for the massive expenses associated with this effort but when it comes to getting people back on the electric grid the watchword is "make it happen" and then deal with the expenses and the fall out.

Hidden behind the Northeast Utility's response is a much bigger issue that undoubtedly will be reviewed and discussed in coming weeks and months.

The fact is, while any utility has a fundamental and legal obligation to their customers they also have a fundamental and legal obligation to their shareholders.

Let's face it - a utility company - while "heavily regulated" - is still a company and its goal is to make money. And NU is prime example of how it is done in our modern capitalist system.

In the last four years, during this Great Recession, NU's earnings per share have increased by 38%.

So, sure CL&P has fewer line crews then 25 years ago when Connecticut was hit by Hurricane Gloria but increasing profits means increasing revenue and cutting costs.

Jeffrey D. Butler, the now familiar CL&P President and Chief Operating Officer, was very clear the other day when he said "absolutely I believe it's probably lower [the number of line-crew]... I can speak for the behalf of the entire industry, there's probably fewer line workers within the utilities today than there were in 1985."

So true it may take longer to get people hooked up and true more crews will need to be brought in from far off places but shareholders do better and when the crisis does hit, those additional costs will be recouped through the rate setting process.

And meanwhile, NU's profits are up and company executives are receiving generous compensation packages.

In fact Butler is fairly far down the NU corporate executive food chain.

Charles W. Shivery, NU's Chairman of the Board, President and Chief Executive Officer pulled in a compensation package of about $8.25 million.

Below him come a couple of Executive Vice Presidents (paid $5 million another at $4.3 million).

And then a couple of Senior Vice Presidents (paid $3.6 million and $2.3 million).

And then we get to Butler.

As Butler reminds Connecticut that CL&P is doing everything it can and has flown in crews from Seattle and Vancouver, British Columbia while other crews have driven in from Florida, Ohio, Kentucky, Pennsylvania, North and South Carolina, Alabama and Colorado, SEC filings show that in addition to his $8.25 million salary package, NU's CEO has also received an additional $10 million in differed compensation.  

If he is terminated - but not for cause - they must also pay him $31.5 million. Heck, even if he is terminated for cause he will collect an additional $14.5 million.

And other senior executives have proportionately great packages.

Late last night I saw a couple of very tired CL&P line crews in the neighborhood.

I stopped and thanked them for their work. A while later, my power came on.

I truly appreciated their dedication and I feel the same way about the job Governor Malloy has been doing to get Connecticut through the storm.
But it is a sad and frustrating commentary about our system that while the Governor and the line-crews worked through the night, the utility's corporate executives were pocketing more money in a day then these people make in months.