Quebec company buys Green Mountain Power

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(Host) Vermont’s second-largest electric utility is being sold to a Quebec company that markets natural gas in northern New England.

Officials at Green Mountain Power say the sale provides solid financial backing at a time when the company needs new energy supplies.

But a consumer group says some of the profit from the sale should be returned to ratepayers.

VPR’s John Dillon reports:

(Dillon) The buyer is Northern New England Energy Corporation, a subsidiary of Gaz Metro, a Montreal based company.

Gaz Metro has assets of $2.5 billion.

And GMP President Chris Dutton says the Canadian company’s financial backing should help the Vermont operation as it looks for new power supplies. GMP’s contracts with Hydro Quebec and Vermont Yankee expire in the next decade.

(Dutton) “What we seek through this transaction is a way to strengthen the company as it faces a time when critical power supply judgments have to be made.”

(Dillon) The deal is valued at $187 million. Green Mountain Power stockholders will get $35 per share. The stock has traded recently in the $27 range.

Gaz Metro plans to leave the local management in place and retain all GMP employees.

Robert Tessier, Gaz Metro president, says the company will keep a low profile in Vermont.

(Tessier) “Because the way we handle our business is through the people who are doing their jobs, and through the boards. And you won’t see many changes because we are there.”

(Dillon) The deal has to be approved by shareholders, the state Public Service Board and two federal agencies.

A consumer group says that regulators should make sure that ratepayers share in the profits.

Jim Dumont represents AARP, a group that intervened in a GMP rate case in 2001. He says the PSB included a provision that says if GMP was sold, half the profit must go back to ratepayers. According to Dumont, it’s only fair that ratepayers get something back because it was their money that saved the company from bankruptcy.

(Dumont) “Once ratepayers rescue these companies, some big company is going to come along and gobble them up and get the benefit of the investment that ratepayers have made in these companies involuntarily. We want to make sure it’s not just shareholders who reap the benefit of that. Ratepayers need to get paid back what they invested to rescue the company.”

(Dillon) Governor Jim Douglas says in general he favors local ownership of Vermont companies. But he says he’s more concerned that the state’s electric rates remain competitive in the years ahead.

(Douglas) “So for me that’s the bottom line, what’s best for the ratepayers. And I hope that will be the focus of the deliberations of the board.”

(Dillon) GMP’s stock price rose dramatically on the news. And soon after the deal was announced, the Standard and Poors credit rating agency indicated that it may raise the company credit rankings because of the sale to Gaz Metro.

For Vermont Public Radio, I’m John Dillon.

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