Caught between the credit crisis and the energy crunch Joe Kotler of DiBacco Family Distributors in Hartford went to the Connecticut Economic Development Fund for some help.
As a new wholesale business making Italian sausages and other meats, Kotler said Connecticut Light and Power was going to require a $7,800, three-month security deposit to keep the lights on. It was a huge burden to have to pay all at once, he said.
That’s where Donna Wertenbach, president and CEO of the Community Economic Development Fund stepped in and asked CL&P if they could negotiate a lower deposit for Mr. Kotler.
Raymond Necci, president and CEO of CL&P and Yankee Gas, agreed to work with Mr. Kotler to lower his small manufacturing business’ security deposit.
A three-month security deposit is required by the utility in case the company goes out of business. It is usually collected in the third month a company opens its doors and is based on the first two months of use, Wertenbach said. She said many new businesses have trouble estimating the cost of deposit because it’s unknown how much electricity it will need before it opens its doors.
Necci said the policy was approved by the Department of Public Utility Control back in 2004 to protect other ratepayers from having to pick up the tab if a small industrial or manufacturing business failed. However, Necci said in these tough economic times, his utility would be willing to work with customers on a one-on-one basis to possibly lower the security deposit.
Kotler said CL&P has agreed to lower his security deposit, but was unable to say by how much because the deal had yet to be finalized.
Senate President Donald Williams, D-Brooklyn, said this is just one of the ways government is working with business leaders to retain jobs in the state.
Yankee Gas has adopted a similar policy to CL&P, Necci said in a press release.
According to the Secretary of State’s office the number of business starts in the state has been decreasing each month for most of 2008. The state’s unemployment rate reached 6.5 percent in August, the highest it’s been since 1993.