As a state panel gathered input from businesses impacted by prolonged power outages following the October nor”™easter, Northeast Utilities tripled the size of a compensation fund while restricting it to homeowners.
Now valued at $30 million, the fund represents a third of Northeast Utilities”™ net profit in the third quarter, with subsidiary Connecticut Light & Power contributing $64 million in operating profits during the period.
“As we heard from our customers and had discussions with Gov. Malloy and his staff, it became clear that the original sum we proposed, $10 million, was insufficient,” said NU CEO Chuck Shivery, in a prepared statement. “While this storm was unprecedented, we set very high expectations for the performance of Connecticut Light and Power. Clearly, we did not meet a number of those expectations.”
According to a report by the Washington, D.C.-based disaster preparation firm Witt Associates released last week, CL&P was not prepared for an event the size of the nor”™easter. The worst-case scenario in the company”™s emergency response plan considered outages of some 100,000 customers, or less than 10 percent of its total customer base. Two-thirds of CL&P”™s customer base ”“ or more than 800,000 customers ”“ lost power as a result of the nor”™easter, and some 700,000 suffered outages following Tropical Storm Irene, some for an extended period.
“This is just the first step,” Malloy said, in a statement. “What we need to do in the short term, to get ready for the winter ahead. I am still looking forward to the long-term plan the Two Storm Panel will ultimately produce, as well as to a more detailed follow-up report from an outside consultant.”
Northeast Utilities spokesman Al Lara said the company considered opening the fund to businesses but elected not to.
“It was a difficult decision because we recognize the impact any outage can have on already struggling businesses,” Lara said. “When the fund was originally developed with the governor, the determination was made to focus on residential customers in order to benefit the greatest number of people. We encourage our business customers to consult their insurers. CL&P”™s claims process also remains open to all customers regardless of the compensation fund.”
Any residential customer without power after noon on Nov. 5 as a result of the storm is eligible for credit applied to its CL&P bill of between $100 and $200. On Dec. 7 CL&P began contacting qualified residential customers to inform them of their eligibility to apply for the credit.
In addition, the company will also be making donations of up to $5 million to the Connecticut Food Bank, Foodshare and Operation Fuel to help them address community needs for this approaching winter season.
Kenneth Feinberg, who designed and administered the September 11 Victim Compensation Fund, is helping NU administer the post-storm fund.
