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No progress in Wallingford dispute with energy cooperative

WALLINGFORD—Dispute resolution talks between the Electric Division and the Connecticut Municipal Electric Energy Cooperative have stalled since the two sides first met in January.

Public Utilities Director George Adair has said the dispute could cost the town $8 million. When asked about the status of the negotiations, Adair said there is “nothing new to announce.”

The two sides have not met since their first meeting on Jan. 15.

Corporation Counsel Janis Small said discussions “haven’t progressed substantially” and that the town is “looking for additional information” from the cooperative.

Small said she could not discuss what kind of information the town is seeking.

“Hopefully it will start moving soon,” she added.

After the Jan. 15 meeting, Wallingford submitted a request for information to the cooperative, said Drew Rankin, CMEEC’s chief executive officer.

“We filled that request,” Rankin said, adding that he is unaware of any additional requests.

“We met all their requests,” Rankin said. “It’s up to them when they are going to respond to us.”

The Town Council and Public Utilities Commission jointly agreed to a five-year power purchasing contract with Energy New England in May.

CMEEC had purchased power for the Electric Division since 1994. Between the time Wallingford agreed to contract with Energy New England and when the contract went into effect, on Jan. 1, town officials worked to transition away from CMEEC. Some of these negotiations resulted in disputes that utility officials have said could cost the town $8 million. In December, the Town Council appropriated $255,000 to the Electric Division for legal fees.

The source of dispute surrounds the interpretation of so-called “springing” contracts initiated on Jan. 1 when the Electric Division’s contract with Energy New England went into effect. The contracts cover ongoing administrative and general charges for shared projects.

By contract, Wallingford and CMEEC will remain partners in several projects through 2021. The Electric Division has an agreement that provides Wallingford with energy hedged by the co-op through 2017. The town owns 32.87 percent of CMEEC’s “Pierce Generating Station” project through 2021. The station is located in Wallingford. The town owns 35.82 percent of the cooperative’s “Diesel Retrofits” project through 2015. It also owns 34.78 percent of the cooperative’s “Micro-gen” diesel generation plant, which operates at times of peak demand, through 2018. Adair has said the Electric Division disagrees with the amount CMEEC is looking to charge the town for these projects.

Among the items under dispute is a $1.8 million charge from CMEEC for costs associated with hedging through 2017.

Also in dispute are charges and credits received for Wallingford and CMEEC’s shared projects. In 2013, these projects cost the town $933,000. The town is also disputing an annual $635,000 charge from CMEEC that would extend through 2021. The charge is for administrative and general costs associated with two shared projects.

The town’s information request sought budget information from the co-op, according to Rankin. The co-op is waiting for a response from the Electric Division so the resolution process can continue, he said.

“They’re the ones that believe they have an issue or series of issues,” Rankin said. “I’m not sure what’s taking them so long.”

Despite the disputes, the two sides continue to work together on joint projects.

“We continue to be good stewards on behalf of our interests, and we’ll continue to do that,” Rankin said. “For us, it’s never been personal.” (203) 317-2224 Twitter: @Andyragz

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