Wallingford wins big in dispute with electric power cooperative

WALLINGFORD – A six-year legal battle between Wallingford and the Connecticut Municipal Electric Energy Cooperative has finally come to an end.

City officials were told on Wednesday that an arbitrator awarded the city $ 3.67 million in damages related to the case. Richard Hendershot, utility manager for Wallingford, said the city will also benefit from $ 5.84 to $ 7.34 million in future savings associated with the municipal power division’s power purchase agreements with CMEEC.

CMEEC is a Norwich-based energy cooperative that buys electricity contracts from the wholesale market and puts them in a pool that serves all of its member municipal utilities. Six municipal power companies, along with the Mohegan Tribal Authority, make up CMEEC’s customer base, of which Wallingford was once a part.

The April 23 city council approved the settlement contained in arbitrator Eric Van Loon’s 99-page decision, but did not disclose details associated with its findings. Some of the details regarding this settlement appeared in the New Haven Register late Thursday afternoon.

CMEEC officials approved the settlement last week, Wallingford City attorney Gerald Farrell Sr. said on Friday. As part of the settlement, both sides agreed to no longer appeal Van Loon’s decision, Farrell said.

CMEEC officials were not immediately available Friday to comment on the referee’s decision.

The two sides have been in arbitration for four years and the city has appropriated $ 2.85 million in legal fees and other costs associated with the legal battle, Farrell said. The dispute centered around Wallingford officials’ belief that the town had been overcharged by CMEEC for costs associated with providing electricity to the community.

Robert Beaumont, chairman of the city’s Public Services Commission, said “city officials would have been remiss if we had not pursued our cause.”

The legal battle between the city and CMEEC dates back to May 2013, when city council and the PUC approved a five-year contract with Energy New England, a Foxboro, Mass., Company to supply wholesale electricity to the city.

The city requested arbitration in April 2015 after an unsuccessful attempt by both sides to find a solution on their own.

“We never imagined that the separation (process) would end up taking almost six years,” Beaumont said.

Mayor William Dickinson Jr. agreed with Beaumont’s assessment of the decision to engage in legal wrestling.

“We owed it to our taxpayers to recover these funds where we rightly thought we were overcharged,” Dickinson said in a statement.

Farrell said the city’s contract with CMEEC called for negotiations between the two parties and then mediation before the arbitrator was hired.

“They told us right away that they were not going to give us the documents that we wanted to prove our case,” he said. Van Loon ultimately ordered CMEEC officials to turn over the documents city officials were looking for, Farrell said.

The case was made more complicated by the fact that even after the city signed a contract with Energy New England, it still had a business relationship with CMEEC.

The city had two contracts with CMEEC when it signed its agreement with Energy New England.

One of the contracts was for a micro-generation project and the city authorities chose not to renew it. The other contract was for the operation of the Pierce Station power station on East Street, owned by the city and operated by CMEEC.

That Pierce Station contract is still two years away, Farrell said. The power plant is what the utility industry calls a “peak unit,” which means that it only operates during times of greatest demand for electricity.

To ensure peak power plants are available to start operating at all times, Farrell said regional power grid operator ISO-New England is making the payments that the city ultimately receives. CMEEC also pays rent to the city as a tenant operating the plant, he said.

“This deal will increase what the city receives,” Farrell said.


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