GMP: CVPS Merger Threatened By Refund Demand

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(Host) A dispute over how Vermont’s largest utility should return $21 million to its ratepayers has become a major issue at the Statehouse.

And utility officials say the $700 million merger of Central Vermont Public Service and Green Mountain Power could be jeopardized if the Legislature steps in to the dispute.

VPR’s Bob Kinzel reports:

(Kinzel) When the Public Service Board approved higher rates for CVPS in 2001 to help the company deal with serious financial problems, the board said that CVPS ratepayers should "share the profit" in the event that the company was sold.

The amount in 2001 was $16 million and it’s now $21 million after being adjusted for inflation.

The question now is how ratepayers should "profit" from the sale of CVPS to Gaz Metro – the Canadian firm that also owns Green Mountain Power.

According to Dorset Rep. Patti Komline, the answer is simple. She’s sponsoring a bill to require the board to have CVPS send out rebate checks to all its customers. Her plan has dozens of co sponsors from all 3 political parties.

(Komline) "I think because the promise was made and people feel, the ratepayers feel, like a deal is a deal and they were promised the return."

(Kinzel) The Shumlin administration and the utilities favor a different approach. They’ve reached an agreement to allocate $12 million of the $21 million to the state’s weatherization programs. The remaining $9 million would be used for other energy efficiency programs.

GMP spokesperson Dottie Schnure says the new agreement is a good deal for consumers and she says it’s inappropriate for lawmakers to step into an active case at the Public Service Board.

(Schnure) "We’re in the middle of a hearing at the Public Service Board. For the Legislature to intervene, interfere, and take one segment of a very complex deal, really creates some significant issues."

(Kinzel) And Schnure says legislative action puts the entire $700 million merger at risk.

(Schnure) "The practical outcome of the Legislature getting involved and making a decision on one aspect of a very complex case means that it does put at risk the transaction and potentially the loss of $144 million in savings to consumers."

(Kinzel) Rep. Komline says the Legislature got involved in an active PSB docket back in 2008 and she wonders how this merger could be so fragile.

(Komline) "If indeed that’s the case that this merger, that making good on the promise to Vermont ratepayers in southern Vermont, is a deal breaker is this really a merger that should happen?"

(Kinzel) Because the deadline for introducing new bills has passed, Rep. Komline says she hopes to attach her plan to another piece of utility related legislation in the near future.

For VPR News, I’m Bob Kinzel in Montpelier

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