Executive change at Eversource seen as move to appease state officials
The appointment of a new chief executive officer at Eversource Energy is being viewed as a move by the electric distribution company to appease lawmakers and utility regulators for the lengthy power outage following Tropical Storm Isaias last August.
Eversource announced Wednesday that current president and CEO Jim Judge will become executive chairman of the company’s board of directors on May 5. Judge is being replaced by Joe Nolan, who is currently executive vice president, strategy, customer and corporate relations.
Judge had been president and CEO since 2016 and chairman since 2017.
David Sacco, practitioner-in-residence from the University of New Haven’s Pompea College of Business, said that Eversource’s move suggests the company’s board of directors felt “they needed do something symbolic.”
“It’s purely a move to appease what I call the three-headed monster: customers, regulators and shareholders,” Sacco said. “If the board had collectively thought that the best thing to do was to get him out of the company, they would have done that. The fact they have effectively kicked him upstairs suggests they believed this would be something that those three constituencies would represent change, without ever having really changed anything.”
Sacco said the top executives of public utilities “are put in a difficult position.” “Don’t get me wrong: I don’t feel sorry for him, because he makes a lot of money,” Sacco said, noting that Judge made $11.02 million in fiscal 2019. “But these jobs are very political.”
Nolan said in an interview Thursday that Eversource “absolutely” has an image problem in Connecticut.
“We’re going to have to work hard to restore people’s confidence there,” he said. “We’ve got to win over their hearts and minds again.”
Nolan’s ascension to become president and chief executive officer comes as at a critical time for Eversource in Connecticut.
Eversource is seeking to recover money that PURA approved last July in the form of a rate hike. PURA suspended the rate hike a month later after complaints from consumers. A ruling on the filing the company made in March to recover the rate hike it was originally granted will come this summer.
The company is also awaiting a final decision from PURA that involves the regulator’s assessment of how Eversource and the state’s other large electric distribution company, The United Illuminating Co., performed in terms of restoring power to customers following Isaias. When PURA issued its draft decision in mid-March, the ruling was especially critical of Eversource, stating that regulators would consider fines against the company as a result.
State Rep. David Arconti,
D-Danbury, who is cochairman of the General Assembly’s Energy and Technology Committee, said a final ruling in that PURA case is expected later this month. If PURA decides to issue any penalties against the utilities in the final decision, a determination of what those penalties might be would come following the final ruling, according to Arconti.
Arconti said Nolan would be well served to read PURA’s final ruling if he wants to begin to repair Eversource’s relationship with Connecticut.
“I don’t know what the company’s motive was in making this change,” Arconti said. “But I do know that what will appease me and my constituents is if Mr. Nolan takes our concerns seriously and works toward substantive change and doesn’t just give them lip service.”
State Senator Norman Needleman, D-Essex, Arconti’s fellow co-chairman of the Energy and Technology, said he is encouraged by Nolan’s selection as president and CEO.
“The choice of taking a communications and business development-type of guy is an interesting choice, I think,” Needleman said. “Jim was a CFO [chief financial officer] at one point, and while he’s not a bad guy, any move to wrestle a company away from a finance guy is a move in the right direction. I hope it’s a step in the right direction.”
Joel Gordes, a West Hartford energy consultant, said the change in leadership could be seen as an an attempt to show it is accountable for the length of the outages following Tropical Storm Isaias,
“Accountability is one of the main things that goes with the (chief executive’s) office,” Gordes said. “And it’s not something that you see nearly enough of.”
The real question, he said, is how much influence does the executive chairman of the baord carry when it comes to a company’s major decisions.
“He could be the one pulling the strings,” Gordes said. “Or it could be like what the Russians call pokacuka, which is a transliteration that means ‘for show’ in English.”
Judge’s departure as president and chief executive officer has an eerie similarity to an executive suite change that occurred a decade ago.
Jeff Butler resigned as president and chief executive officer of Connecticut Light & Power Co. in November 2011 after the utility's widely-criticized handling of power restoration following Tropical Storm Irene in August of that year and an unusual late October snowstorm. Hundreds of thousands of CL&P customers were left in the dark after both storms, some for longer than 10 days.
CL&P and its corporate parent, Northeast Utilities, merged with Boston-based NStar in April 2012. The companies became collectively know as Eversource Energy in February 2015.