Northeast Utilities’ New CEO Says Company Learned From Last Year’s Power Problems
By STEPHEN SINGER, Associated Press
BERLIN, Conn. (AP) _ The new chief executive of Northeast Utilities said Wednesday that New England’s largest utility has its work cut out for it following two storms last year that damaged power lines and the company’s reputation.
CEO Thomas J. May told reporters he is reassuring customers and regulators that Northeast Utilities has learned from last year’s problems that resulted from a tropical storm in late August and a freak snow storm two months later.
Hundreds of thousands of customers were without power for as long as 11 days after the October storm.
“We just have to win back the hearts and souls,” he said.
May also is meeting with employees to boost morale.
“They got no sleep for two weeks and people say, `You’re a bum,”’ he said. “That’s a tough thing.”
May previously headed Boston-based NStar, which was bought for $5 billion by Northeast Utilities. He broke from precedent, meeting reporters in a 30-minute question-and-answer session at Northeast Utilities’ sprawling campus in Berlin as part of an effort to reach out to its 3.5 million electric and gas customers and regulators in Connecticut and Massachusetts.
May said recently enacted Connecticut legislation requiring performance standards for emergency preparation and service restoration will have costs, but it’s too early to know what they are.
And he refused to criticize his predecessors over the power outages.
“I do not want to Monday morning quarterback anyone,” he said. “It was a horrendous situation.”
May also said the utility is interviewing candidates for the vacant position of president and chief operating officer of subsidiary Connecticut Light & Power. Jeffrey Butler resigned under pressure in November after he was criticized by customers and Connecticut officials over the extensive outages.
May said the criteria for the next president are no different than before the storm.
“Someone who’s really good at keeping the lights on,” he said.
May would not say whether Northeast Utilities would settle a dispute with federal regulators over complaints by several states that utilities, including Northeast Utilities, are making excess profit.
Jonathan Arnold, an analyst at Deutsche Bank, said in a note to investors that Northeast Utilities is willing to entertain settlement discussions but is unwilling to make major concessions.
“He’s had a history of settling issues with the attorney general,” Arnold said in an interview, referring to NStar’s agreement to buy power from a wind power producer that helped pave the way for regulatory approval from Massachusetts for the Northeast Utilities deal.
The attorneys general, regulators and others in several New England states are asking federal regulators to find that utilities are making an “unjust and unreasonable” return on equity, a measure of profitability. The attorneys general want refunds.
Northeast Utilities’ chief financial officer, James Judge, told investor analysts on May 3 that the case could go to court, which he said would take 15 months. A settlement is an alternative that could avoid legal action, he said.
May would not say which direction the dispute could take.
(Copyright 2012 by The Associated Press. All Rights Reserved.)