Malloy says NU consulting fee presented no conflict for Esty

Gov. Dannel P. Malloy today defended the intervention by Daniel C. Esty, his commissioner of the new Department of Energy and Environmental Protection, in a regulatory issue involving a subsidiary of a former consulting client, Northeast Utilities.

“I don’t believe there is a conflict. If I believed there is a conflict, I would indicate he shouldn’t be involved, and I don’t believe that is the case,” Malloy told reporters.

The governor was responding to questions arising from a Hartford Courant story about Esty, a Yale professor who had a busy consulting business before joining the administration, receiving $205,000 from NU from 1997 to 2005.

Malloy said Esty disclosed his consulting for NU before he was appointed as the commissioner of environmental protection, with the expectation that the legislature would approve Malloy’s proposal for the new, expanded agency. Esty has recused himself from issues involving clients with whom he has worked within the last five years.

“Based on the information that I have, I do not believe the commissioner acted in an improper way,” Malloy said. “I can assure you he did in fact disclose the work that he had done for that company.”

On Aug. 30, Esty wrote a letter effectively suspending an application by NU’s Connecticut Light & Power to install 1.2 million “smart meters,” whose cost would have been borne by ratepayers.

He acted the day after a regulator produced a draft decision recommending denial of the application, concluding that the benefit to consumers–smart meters allow sophisticated off-peak pricing–was negligible, compared to the cost.

Esty says he acted because the issue of smart meters should be considered as part of a broader, still-evolving state energy policy, including smart meters.

Malloy said his commissioner’s rationale was reasonable.

“That we would want to be a state government that had a policy in place shouldn’t shock anyone, because all 50 states are in the process of looking at this as we speak,” Malloy said.

“The policy could be as simple as saying for all new customers, smart meters should be installed,” Malloy said. Or the state might set a goal of installing smart meters at locations with multiple meters, such as apartment buildings, he said.

In a written statement drafted in response to questions posed by The Courant, Esty said he actually opposes the CL&P application to the regulatory arm of his agency, the Public Utilities Regulatory Authority.

“In fact, I do not support the smart meter proposal in the filing and thought it was appropriate to get the policy framework in place before any signal was given to CL&P about the direction it should take on this issue,” Esty said.