Vermont’s two largest utilities have agreed to merge under the ownership of a Canadian parent company.
Central Vermont Public Service would be essentially taken over by Green Mountain Power Corporation in a $702 million deal, if it is approved by CVPS shareholders and regulators.
GMP‘s parent corporation, Gaz Metro of Quebec, would own the new company, which would likely retain some form of the Green Mountain name.
GMP CEO Mary Powell would lead the new company, and CVPS CEO Larry Reilly would remain to help guide the transition, but plans to leave once the merger is complete.
The company’s corporate headquarters would remain in Colchester, where GMP is based. An operations headquarters for the combined company would be established in Rutland.
Tuesday’s announcement of the deal caps six weeks of uncertainty for CVPS. The utility, Vermont’s largest, announced on Memorial Day that it had reached agreement with Fortis Inc. of Newfoundland to be bought out. But that deal called for CVPS to remain an independent subsidiary.
Gaz Metro made a counteroffer with better terms. After weeks of weighing its options, CVPS opted for the merger with its in-state utility under Gaz Met ownership.
Fortis agreed to drop out of the bidding after collecting a $19.5 million payment from CVPS. Gaz Metro has agreed to reimburse CVPS that amount once CVPS shareholders approve the deal.
Reilly says CVPS was interested in being sold because it needed the ability to raise money for capital investments in its system.
Powell says the merged company would be committed to ambitious investments in renewable energy projects, including making Rutland the Vermont community with the greatest reliance on solar power of any in the state.
Rutland Mayor Chris Louras says many city residents are leery of the potential for job losses.
But he says the agreement includes commitments for investments in the city and to maintain the bulk of the existing work force. Some executives, such as Reilly, will be let go in Rutland.
Louras says because of those commitments, he supports the deal.