With Mayor William Stortz stepping aside, this story about the spat over a streetlighting issue no longer has quite the political importance that it did a few days ago, but there's still much to mull over.
After reading the story, if you can stomach more, take a look at some of the documents detailing what both Stortz and GOP mayoral contender Ken Johnson have to say about the matter.
Follow this link to see JPG (photo) of Stortz's April 27 letter to Johnson:
April 27 letter from Stortz to Johnson
May 21, 2007 letter to Stortz from Johnson
Re: Status Report- Investigation into CL&P’s Streetlight Overcharges for the City of Bristol under DPUC Docket No. 04-01-01
Dear Mayor Stortz:
Here’s a brief timeline of activities under the Municipal Energy contract with the City and current status report:
Dec 12, 2006- Bristol City Council awarded contract with Municipal Energy
Feb. 13, 2007- ‘Side letter’ sent to Mayor Stortz per City request
Mar 6, 2007- fully executed contract signed by Mayor Stortz
April 5, 2007- Ken Johnson meeting with Mayor Stortz
April 27, 2007- Letter rec’d from Mayor Stortz indicating staff contact names for Municipal Energy
May 7, 2007; Ken Johnson meeting with the staff members Paul Strawderman, Jason Morrocco, Richard Lacey
At the May 7 meeting, Ken Johnson provided background on the issue and answered questions to help bring staff up to speed. We discussed the need to ensure that the City has notified CL&P by certified letter that the City is not accepting CL&P’s refund offer as full and final settlement; a copy of the same should be forwarded to Municipal Energy for our files. Ken reported that Municipal Energy is currently gathering electronic data from all client towns and checking CL&P’s calculations, including Bristol’s.
Next action steps include: Municipal Energy will advise and assist Paul & Jason in cross-checking the results of CL&P’s 1999 Group Relamp Audit results and 2003 Municipal Streetlight Audit results for Bristol with City files and records. Municipal Energy has culled CL&P’s electronic files and produced a condensed version of the audits containing “changes” only on CD for Paul & Jason. Bristol staff effort will involve comparing the condensed electronic data with City files and records seeking to reconcile errors in four categories: 1) removes, 2) new founds, 3) overbills, and 4) underbills. Ken Johnson provided a copy of Municipal Energy’s New Founds report for Bristol. The team agreed to focus on ‘new founds’ first. Ken Johnson explained to Richard Lacey that CL&P has ‘taken back’ property tax dollars from Bristol in CL&P’s calculation of Bristol’s refund. Richard will look into the validity/legality of this action. Once the investigation phase is complete, Municipal Energy, with staff input, will perform new refund calculations for Bristol.
Pertinent supporting documents provided to city officials have been attached to this letter.
Respectfully submitted,
Ken
Kenneth R. Johnson
CC: R. Lacey
P. Strawderman
May 29, 2007 letter from Stortz to Johnson (in JPG photo format)
History of Municipal Energy & CL&P Streetlighting Overcharges
We are aware that many of you as chief executives have not been with us since the beginning of the CL&P streetlight refund project. Many of the towns we serve have seen turnover of administrations – some of your towns have experienced multiple turnovers. Because the streetlight ‘saga’ has played out over the course of many years, primarily due to repeated CL&P stonewalling tactics, it has created a challenge for municipalities to keep track of events and it has been equally challenging for us to ensure that you -- our clients – are well-informed on the subject. For these reasons, we thought it would be useful to recap the chronology of events that has led us to where we are now.
As you are aware, your town in among a group of 50 municipalities that have signed on with Municipal Energy to help you obtain full and fair compensation from CL&P. Working on your collective behalf, Municipal Energy has leveraged our strength in numbers and worked diligently to maintain solidarity among our clients to keep the streetlight issue alive. CL&P had been negotiating settlements with individual towns in an effort to mitigate their total exposure and cause the issue to lose steam. CL&P was successful in getting many towns to accept settlements and, as a result, each of those municipalities lost the opportunity to obtain future refunds. These actions cost those municipalities many millions in refunds. Towns heeding Municipal Energy’s advice kept themselves in play for larger refunds down the road –including the refund checks that many of you received recently and, hopefully, the additional refunds that are still to come. To date, CL&P has been compelled to pay out more than $12M in refunds for overcharges, after initially offering little or no compensation to many cities and towns.
Ken Johnson, who founded Municipal Energy in 2002, previously worked for CL&P and its parent Northeast Utilities for over 21 years. In the mid-1980’s Ken served as streetlight administrator and oversaw the implementation of an aggressive energy conservation project which involved converting thousands of municipal lights to more energy efficient light sources. During this time, Ken was aware of problems with the streetlight billing and worked with a CL&P field supervisor to conduct a sample audit comparing billing records to lights found on streets in the town of Cheshire. The results demonstrated conclusively that a significant percentage of lights that were being billed in error. As the same billing process and system was being used across the NU service territory, it was evident that the problem was systemic and that a larger scale audit and billing reconciliation was in order. A decade or more went by before the Company took a serious look at addressing the problem.
Ken left the Company in 2002 and formed his own consulting business, Municipal Energy Consulting Group, LLC. Before leaving, Ken again advised NU management of the magnitude of the streetlight billing issue and advised that CL&P likely owed tens of millions of dollars to its municipal customers for decades of overcharges for streetlight service. Ken has been called a ‘whistleblower’ -- a label he rejects – but it is clear that Ken Johnson (and subsequently his firm Municipal Energy) has been a prime mover behind exposing this matter to public scrutiny and advocating for giving back money to the effected towns. Further:
Municipal Energy possesses extensive industry knowledge that does not reside within other entities outside of CL&P. We’ve shared our knowledge with the DPUC, municipalities and other parties to bring a heightened level of awareness of the depth and breadth of CL&P billing errors into the dialog. We’ve been able to factually counterpoint CL&P’s assertion that most errors only go back a few years.
Municipal Energy went before the Freedom of Information Commission and successfully forced a secret streetlight refund settlement between CL&P and the City of Middletown to be opened to public scrutiny. CL&P fought the case and lost. The precedent had thereby been established for opening the books on CL&P refund offers.
Municipal Energy has communicated regularly with municipalities on all aspects of the streetlight issue since 2002 and in doing so has provided an effective forum for exchange of ideas and intelligence. Client towns, including towns that joined later in the process, have received the benefit of this shared knowledge.
Municipal Energy has long advocated for CL&P’s release of streetlight data in an electronic format and, working with other parties, ultimately succeeded in compelling CL&P to produce that data via a DPUC order.
Municipal Energy has produced ‘cut and paste’ templates for use by municipal clients to communicate to CL&P and the DPUC about the issue.
Municipal Energy communicated the sound advice clients needed regarding how to handle the first round of CL&P refund checks cut in 2005. As a result, Municipal Energy clients comprise a sizeable number of the towns receiving refunds in the recent round of checks cut by CL&P.
Municipal Energy advised and assisted City of Bristol personnel in preparing reports, exhibits and testimony presented to the DPUC. The City served as a proxy for municipalities in general and effectively counter pointed many of CL&P’s arguments.
Municipal Energy advised clients to stay the course through CL&P’s appeal of the 2005 DPUC Decision and subsequently provided timely information and advice to clients regarding the recent checks and CD data from CL&P.
Municipal Energy makes no representation that we are solely responsible for helping municipalities obtain refunds. We acknowledge the roles of key parties, including the Attorney General’s office, Office of Consumer Counsel, the law firm of Murtha & Cullina on behalf of CCM and many others in this process.
What action steps need to be taken next by Municipal Energy and client towns?
Municipal Energy is currently analyzing CD data for each of its clients to check for errors in CL&P’s refund computations.
If your town has not yet forwarded to Municipal Energy the electronic data you received on CD from CL&P, please do so immediately. You may e-mail the data to [XXXXXX] or mail the CD to:
Municipal Energy
12 Old Cider Mill Rd.
Bristol, CT 06010-2350
Municipal Energy is encouraging municipalities to send a certified letter to CL&P stating that acceptance of any check does not constitute agreement to a full and final settlement.
If your town has not yet sent your certified letter to CL&P, please do so immediately. Municipal Energy has prepared template letters for your use. You’ll find copies attached to this letter for your use.
Municipal Energy intends to meet with client towns individually to review CL&P’s error reports, audit data and streetlight inventory to find any errors and omissions in the data CL&P used to calculate refunds.
Each town should identify personnel (ideally those who possess knowledge of the town’s streetlighting and have access to town records) who can meet with Municipal Energy to identify errors and omissions.
July 11, 2007 press release from Stortz, re situation with Municipal Energy:
Bristol, CT, July 11 2007 - In a prepared release, Mayor William T. Stortz outlined the City’s position relative to the charges of Ken Johnson, of Municipal Energy, that the City is and has been uncooperative in providing support to him as he sought to develop a case for Bristol to receive a larger refund from CL&P.
Simply put, the City signed a contract with Mr. Johnson on March 5, 2007. As part of that agreement, Mr. Johnson received a $10,000 non-refundable payment, up front, (check cashed within two weeks), and also would receive 15% of additional moneys received by the City above the amount previously agreed to by CL&P (approximately $86,000) based on his efforts.
Through our attorney, I requested a meeting with Mr. Johnson soon after the contract was signed. That took Mr. Johnson one month to set up. As part of that meeting, I again requested monthly reports, as was previously agreed on in a February 13, City- requested letter, from Mr. Johnson to my office. Up to 4/26, no reports had been received. We met earlier on April 5 and later that month on (4/27). Two contact names were provided to Mr. Johnson, again with a request for a progress report as of May 1 (none ever received).
Again, on May 18, I requested a progress report, as no report had been received.
I again made the same request on May 29, again because still no progress reports had been provided. Monthly progress reports had been promised in his February 13 letter.
A report, dated May 21, was delivered to my office on June 1, indicating that, among other things, Mr. Johnson had met with three City personnel, Mr. Strawderman, Attorney Lacey, and Jason Morocco.
In that May 21 letter, there was a reference made by Mr. Johnson that he would advise and assist City personnel in certain clerical activities including, but not limited to, reconciling errors on numerous accounts.
The impression, as I saw it, was that City staff would be doing actual work that we had contracted Mr. Johnson to do.
I asked our Attorney to review this issue relative to the contract, which he did, and our attorney’s response was that “the consultant has the duty to review and analyze street light records, perform all necessary calculations, and present the data to CL&P in order to adjust refund amounts. The City’s duty is to provide access as needed to these materials, but not to provide research services.”
A follow up meeting between the City and Mr. Johnson had been set up for June 12, but for personal reasons, it was cancelled. For the same reasons affecting Mr. Johnson, I did not notify him regarding the Attorney’s determination of the City’s role until June 21.
That was the last contact. I have received no response from Mr. Johnson regarding cooperation, or lack thereof on the part of the City. Any accusation that we are not cooperating or that we are obstructing him is a complete fabrication.
Again, due to his personal situation, we were waiting for his initiating the rescheduling of the meeting, and filing of reports as requested by me and promised by him.
City staff has been cooperative with and available to Mr. Johnson on this issue. They have functioned in a responsible manner and in no way deserve the allegations made by Mr. Johnson.
His charge of lack of cooperation on our part is erroneous and unsubstantiated, and a blatant effort to redirect attention from his failure to perform. Again, I respect his personal situation, but a simple report so stating the reason for the delay would have sufficed and been the professional thing to do.
As Mayor, I am charged to act on the City’s behalf and protect our interests. We have paid $10,000, and at this time (four months after the contract was signed) have received no indication of any meaningful progress.
We will attempt to get this back on track, but need the cooperation
July 11, 2007 letter to Stortz from Municipal Energy vice president James Krone:
Dear Mayor Stortz:
I’m writing in response to your letter to Ken Johnson dated June 21, 2007. Thank you for understanding and agreeing that Ken Johnson’s family and personal life should take priority. Your kind words are duly noted in these difficult times with the recent loss of his father, Warren Johnson.
Municipal Energy possesses extensive knowledge of the CL&P streetlight overcharge issue – knowledge that resides nowhere else outside of CL&P. We share this knowledge with our municipal clients to help them recover full and fair refunds from CL&P. As a consulting firm, we can only analyze data provided to us by CL&P and compare it with City of Bristol internal records. It may require your staff to check install dates, removals, wattage, lamp type, etc. as we methodically work through hundreds of streetlight records potentially in question. We believe it works best to allow us direct access to staff members who have knowledge of the streetlight issue and access to relevant city records. Perhaps an actual example would best illustrate my point:
There is a streetlight on Barber St., pole #1294, which is situated directly in front of the former CL&P work center off Pine St. CL&P claims that Bristol has failed to pay for this light and has therefore back-billed the city. However, it has not been unusual for CL&P to install street and area lighting for its own benefit in and around its own facilities over the years. We (Municipal Energy) would ask the City of Bristol to check its records to determine if the City ever requested a light be installed at this location. If the answer is ‘no,’ then this becomes the basis for Municipal Energy to calculate the refund due the City.
We have previously communicated to you and all our clients our plan of action and next steps. Your Corporation Counsel Richard Lacey is well versed in the layers of complexity of the streetlight refund issue and can help you understand why it is difficult to determine a timeline for completion of this project or precise future steps needed to arrive at a final resolution.
We are prepared to continue our analysis and work with staff members you designate. Thank you again for you interest and concern. We have proposed a next meeting date of July 18 with your staff to continue our work.
Sincerely,
James Krone
VP Operations
Municipal Energy Consulting Group, LLC
Cc: Atty. Richard Lacey
Atty. Ed Krawiecki
City Council members
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Copyright 2007. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com
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