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Don’t act rashly in response to CMEEC scandal

December 30, 2018

A public relations effort is underway to save the Connecticut Municipal Electric Energy Cooperative. It may need saving because it has suffered from corruption.

Five current or former executives and board members are under federal indictment. The indictments, handed down in November, resulted from an FBI investigation about annual trips to the Kentucky Derby provided to cooperative officials, local public utility executives, friends, family and other public officials.

The trips and other alleged junkets and gifts were paid for from what was essentially a slush fund buried in the energy cooperative’s budget.

CMEEC CEO Executive Director Drew Rankin; departing Chief Financial Officer Edward Pryor; Norwich Public Utilities General Manager John Bilda, a former CMEEC board member; and former board members James Sullivan of Norwich and Edward DeMuzzio of Groton were charged in one indictment with one count each of conspiracy and three counts each of theft from a program receiving federal funds.

Rankin and Sullivan face similar charges in a second indictment over Sullivan receiving CMEEC funds for $96,000 in travel and personal expenses. The indictments allege that the parties conspired to keep knowledge of the activities and reimbursements out of the public eye.

Rankin remains suspended pending the results of an internal investigation. Bilda was removed from the cooperative’s board and suspended from his position at NPU.

Groton City Mayor Keith Hedrick this past week gave a presentation to the Southeastern Connecticut Council of Governments. Several state legislators also attended. Hedrick made the case that, as bad as all this looks, CMEEC plays an important function. Its ability to purchase electricity wholesale allows the municipal utilities serving the area — Groton Utilities, Norwich Public Utilities, the Jewett City Department of Public Utilities and Bozrah Light & Power — to charge lower rates, both good for customers and the ability of those communities to attract and keep businesses.

Those local utilities and two public utilities serving the Norwalk area collectively own CMEEC.

It is a valid point. Past misconduct is not a good reason to deliver a death sentence to the energy cooperative, particularly if its elimination would drive up electric rates. The council of governments, consisting of the chief elected leaders of our local towns and cities, has already taken that position. When meeting in November to discuss its state legislative priorities, the council agreed to oppose any legislation that would hinder CMEEC in its mission to help provide below-market rates.

It should also be noted that after the malfeasance at CMEEC became public thanks to investigative reporting — but before the federal indictments came down — the legislature took steps to improve accountability. There is now a state-appointed consumer advocate on the board. It is undergoing a mandated forensic audit. It must report annually to the legislature and new rules restrict the use of funds.

That is a far better situation than previously existed and allowed cooperative executives and board members, operating in the margins between the public and private sector, to direct funds for activities that were wholly inappropriate and, in the eyes of federal prosecutors, criminal.

While elimination of an entity that can do good things for the community when operated properly does not make sense, the jury remains out on whether it and public utility consumers would benefit from even greater oversight. Floated has been the idea of bringing CMEEC under the Public Utilities Regulatory Authority, which regulates private investor utilities.

It is a possibility the legislature should examine.

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