Utilities oppose public power authority

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(Host) Vermont’s privately owned utilities have raised questions about a proposal for the state to purchase large hydroelectric dams on the Connecticut River. Legislation to set up a public power authority is pending in the state Senate. But the utilities are lobbying against it. They say lawmakers haven’t taken enough testimony on the issue.

VPR’s John Dillon reports:

(Dillon) A California based company wants to sell off six hydroelectric projects on the Connecticut River. The dams produce about 480 megawatts, about half the state’s electricity needs. Right now that power is sold out of state.

The Legislature is considering setting aside $250,000 to study whether it makes sense for the state to buy the dams. The same bill would also set up a public power authority to sell the electricity to Vermonters.

Utility lobbyists are worried about the proposed public power authority. Steve Kimbell represents Green Mountain Power.

(Kimbell) “It creates a publicly owned electric utility, vertically integrated, [to] generate, transmit, distribute power to customers inside and outside the state of Vermont. That’s what the language that came out of the Institutions Committee does. And we object to that because we’re in that business.”

(Dillon) Kimbell’s also concerned because the legislative language that creates the power authority is tucked into the annual capital bill. This is the legislation that authorizes state bonding and construction projects. The lobbyist says public power is a huge policy question that should be discussed by several other committees. Yet he says the utilities haven’t had a chance to testify on it.

The bill was drafted by the Senate Institutions Committee. Chairman Vince Illuzzi (R-Essex and Orleans), says the legislation is needed in case the dams come up for sale when the Legislature is not in town.

(Illuzzi) “And if there is no independent public power authority in place to essentially acquire ownership and execute all the agreements and documents to buy and operate the facility, then we’re right where we are today, and that is nowhere.”

(Dillon) Illuzzi says a public power authority would save ratepayers money since it wouldn’t have to return profits to shareholders. He calls the sale a once in a lifetime opportunity. And he points out that over the next decade, Vermont could lose about one-third of its power supply as contracts with Hydro Quebec expire.

Illuzzi says he thinks he knows why the privately owned utilities oppose the public power idea.

(Illuzzi) “Perhaps it’s the fact that public power authorities across America operate at substantially reduced administrative costs. You don’t see salaries in the hundreds of thousands of dollars range paid to the managers of private power authorities.”

(Dillon) But the utility lobbyists say the state would be making a mistake to enter the risky wholesale power business. And Governor Jim Douglas is also a skeptic. He says he doesn’t mind the state studying the idea. But the governor believes the power business is best left in the hands of private companies.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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