Moody’s Ratings has, once again, downgraded its credit outlook for CL&P, Connecticut’s largest electric utility, according to the Hartford Courant.
And Moody’s Vice President and Senior Ratings Officer Jeff
Cassella pulled no punches in pinning the tail on the donkey.
Cassella explained in blood-soaked prose exactly why Moody’s
had lowered CL&P’s rating from 3A to Baa1: “The downgrade of The
Connecticut Light and Power … primarily reflects a Connecticut regulatory
jurisdiction that is currently the least credit supportive utility regulatory
environment in the U.S. This environment has been characterized by higher
political scrutiny as well as inconsistent regulatory decisions and rate case
outcomes … Given the challenging Connecticut regulatory environment, it is
uncertain whether CL&P will be able to consistently maintain strong
financial metrics going forward.”
Downgrades increase business costs because banks consider
ratings when companies borrow money to pay off debt and finance continuing
business operations.
“Both Moody’s and S&P Global Ratings downgraded both gas
company ratings in December, the Courant noted. “Before that, S&P
downgraded Eversource and its subsidiaries. Earlier this year Bank of America
advised investors that Connecticut has ‘probably the ‘worst regulatory
environment in the U.S.,’” thanks in large part to Connecticut’s energy
regulation czar, Marissa Gillett, the head of
Connecticut’s Public Utilities Regulatory Authority (PURA).
“The downgrade,” the Courant notes, “is likely to escalate
what already has become a long, angry and increasingly political fight over how
the Public Utilities Regulatory Authority enforces regulatory law and policy.”
But the problem for Gillett and her supporters, including
Governor Ned Lamont, is that the theatre of action has moved from the political
to the judicial arena. Suits are pending,
and judicial matters, so we are told, are conducted in the rarified arena of
courts uninfluenced by partisan political battles that, supposedly, carry
little weight. An earlier supposition that rating agencies were colluding
with energy distributors to secure unchallenged price increases was dismissed with
a sardonic chuckle by grownups in the political arena who know how such things
really work.
Moody’s decision to lower borrowing and financing rates –
again – became public, the Courant notes, “as Eversource and Avangrid were in
Superior Court in Hartford, pressing a lawsuit that accuses PURA of bias and of
operating in a fashion that has allowed Gillett to conceal the fact that she is
making decisions unilaterally — and illegally — by freezing fellow commissions
out of the rate setting process… Hartford Attorney Thomas J. Murphy, arguing
for both utilities, asked Superior Court Judge Kaitlin A. Halloran to give the
utilities access to PURA records and the opportunity to question authority
officials on subjects that could support the utility claims. Assistant Attorney
General James Caley, defending PURA, argued against disclosure, saying the suit
should be dismissed.”
The state’s quasi political Attorney General Office is
obligated by statute to defend the governor and executive department state
agencies in legal actions. Owing to PURA’s mishaps, the lawsuit likely will not
be dismissed. Doing so will open judge Halloran to ugly charges of partisanship
and the politicization of judicial matters. The hiding or destruction at trial
of evidence necessary in determining a just verdict on the merits of a case is
destructive to judicial order – a very serious business for most people who are
not the audacious former Secretary of State Hillary Clinton, whose destruction
of computer evidence during a hearing by a combination of Bleach Bit and a
hammer is still fresh in the minds of judges and non-partisan reporters. The
hammering and bleaching, PolitiFact, tells us, was the work
of Clinton aides.
Most recently Superior Court Judge Mathew Budzik ordered Gillett
to submit to questioning under oath by utility lawyers “days after she
acknowledged deleting – she says inadvertently – a controversial text message exchange that could help explain
who was behind an unusual news opinion
column vilifying the utility industry,”
according to a Courant report. The utilities have alleged for months that
Gillett has bypassed the PURA board and made unilateral decisions that affect
its assets.
Gillett claims that the documentation Budzik ordered
released to the plaintiffs had been deleted when she purchased a new phone that
was set to delete messages automatically after 30 days.
Budzik’s order reads: “Within 15 days 0f the date of this
order, the plaintiffs may depose [PURA] Chairperson Gillett and Chief of Staff
Govert concerning the circumstances surrounding the deletion of any documents
responsive to the court’s original discovery order set forth in the April 16th
decision, any actions taken to recover any potentially responsive documents,
and the circumstances surrounding any review, editing or commenting upon the
December 19th op-ed by Chairperson Gillett and/or Chief pf Staff Govert.”
The judge, it would appear, does not react indifferently to
the unfulfilled orders his court had issued months earlier. And his stern order
suggests that the resulting PURA smoke conceals a fire in the defense’s claims that
Gillett has shown no bias against the utilities she has punished with
unilateral adverse decisions.
Lamont, who appears to be stuck with Gillett in a perhaps
fatal political embrace, can no longer plausibly claim to be surprised at the
suit brought by the plaintiffs.
“Everyone is getting mad at the umpires. Eversource is not getting everything they
want and they are bringing suit,” Lamont told reporters way back in
February. “It was a surprise to me. Nobody notified me. I think we have to do a
better job of working together.”
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