Lest there be any doubt, Gov. Peter Shumlin has dug in deep behind the deal struck by his Department of Public Service and Green Mountain Power in the company’s bid to merge with Central Vermont Public Service.
Speaking Monday morning in Burlington at a clean energy summit organized by Sen. Bernie Sanders, the governor twice brought up the growing debate over the merger, calling it “ironic” that Vermonters would “quibble” over a contested $21 million portion of the deal instead of focusing on what he sees as, overall, a good deal for ratepayers.
“It’s ironic to me that [when] we talk about a merger that’s gonna save Vermonters $150 million in 10 years, that we quibble over whether or not we should be putting another $21 million into energy efficiency measures instead of sending out small checks to people we can’t find 12 years later,” he said, before returning to his scripted remarks.
After simmering for weeks, tensions boiled over last week in the Vermont Senate, with legislators grilling DPS Commissioner Liz Miller on Thursday about whether she negotiated the best deal possible for ratepayers. Specifically contested is a $21 million “windfall” payment owed to CVPS customers for bailing out the company in 2001 when it faced bankruptcy. While the Shumlin administration believes the money should be invested in weatherization and energy efficiency measures, AARP and a growing number of legislators believe it should be refunded to consumers.
In his remarks at the summit, Shumlin exhorted audience members — a who’s who of private- and public-sector energy muckety-mucks — to stand behind the deal’s investment in energy efficiency.
“I ask each of you in this room, when you hear conversations about whether we should be spending money on energy efficiency or checks back to Vermonters — small checks — I would say that’s a place where we should all stand together and say, “’Listen, are you kidding? We thought we put that debate to rest.’”
Rep. Oliver Olsen (R-Jamaica), who has criticized elements of the Shumlin administration’s deal with Green Mountain Power, took issue with the governor’s characterization of the debate.
“I would say, first of all, that $21 million may not seem like a lot of money to someone who’s very wealthy, but to the average Vermont family, $21 million is not something we ‘quibble’ about,” he said. “$21 million is something we should be very concerned about.”
Olsen says the governor misses the point: that legislators aren’t principally concerned about how ratepayers are reimbursed, but rather if they’ll be reimbursed by Gaz Metro, which is Green Mountain Power’s parent company. As the deal between the administration and the company stands — a deal that can be approved, rejected or amended by the Public Service Board — the utility can actually recoup the $21 million they invest in efficiency by charging ratepayers, plus interest.
“We’re jumping the gun by entering into a discussion about how to spend the $21 million when we really haven’t settled the question of where the $21 million would come from,” Olsen said. “The big problem I have with this whole proposal is that we’re asking ratepayers to pay even more while allowing Gaz Metro to keep the $21 million that they owe Vermont ratepayers.”
In an interview following the summit, Shumlin roundly criticized legislators’ attempts to shape the outlines of the merger. Arguing that, “the process question really matters,” the governor said it’s up to the independent Public Service Board — not elected officials — to settle on details of the merger.
“It’s absolutely inappropriate for the legislature or the governor to weigh in through law on a pending case. If you’re going to do that, get rid of the Public Service Board and send it back to the legislature and the governor to regulate utilities. I don’t want to be around as governor if that happens.”
Whether the legislature will end up taking action on the merger is an open question. House Speaker Shap Smith has come out strongly against interfering in an open Public Service Board docket. While many in his chamber and in the Senate appear to oppose portions of the merger agreement, consensus around how to take action appears elusive. And while Senate President Pro Tem John Campbell seemed to side with the merger naysayers last week, he has yet to outline whether and how the Senate might act on the matter.
Campbell did not immediately return calls for comment Monday.
Sen. Vince Illuzzi (R-Essex/Orleans), an outspoken opponent of the windfall portion of the deal, says he’s pessimistic that his side will prevail.
“I think in the end game, [Shumlin] wins because he’s got Shap Smith in his corner and, regardless of what the Senate does, the House will not act,” Illuzzi said. “So Gaz Metro and Shumlin win. If I were outlining the book, that would be the concluding chapter.”
For his part, Shumlin’s strategy appears to be to dig in, support Miller and wait for the controversy to blow over. With the legislature nearing adjournment and opposition scattered and diffuse, the governor may be able to count on legislators losing interest and moving on.
One factor that could complicate Shumlin’s strategy, however, is AARP’s continued public relations campaign against the administration’s position. Since February, the senior advocacy organization has been advertising on television, in print and through direct mail — arguing that the 35,000 of its members who live in CVPS territory are getting a bum deal.
According to AARP spokesman Dave Reville, the group is launching its third television advertisement today on WCAX-TV and cable channels. A second direct mail piece to the 35,000 members in question will reach mailboxes this week.
“It’s a fairly extensive campaign and we’re hearing from a lot of members,” Reville said. “We know there’s been a couple hundred calls into [Shumlin’s] office, and this mailer hasn’t even hit yet.”
This article appears in The Money Issue April 2012 (Theme Issue).
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The one name missing in this article is Bill Sorrell. Probably a good thing for both sides, as he could turn 21 million into either 42 million or a 21 million deficit in one court appearance.
Says Shummy
““It’s absolutely inappropriate for the legislature or the governor to
weigh in through law on a pending case. If you’re going to do that, get
rid of the Public Service Board and send it back to the legislature and
the governor to regulate utilities. I don’t want to be around as
governor if that happens.”
But wait Petey, didn’t you just weigh in at the clean energy summit, by keeping Shappy in your corner blocking any bills aren’t you weighing in…
If you don’t want to be around as Governor then do us all a favor and head back to Putney. Otherwise stop being the hypocrite we all knew you were. Just come out and say it for all to hear, Gaz will make you a rich(er) man and you will stay in the Gov’s seat for as long as you can continue duping the majority of Vermonters.
Shumlin is bought and paid for by Gaz Metro. I’m getting a little bit tired of hearing about the $144 million in future projected savings to ratepayers due to the merger. “Projected” savings are 100% pure speculation. It may or may not be real.
Second, I’m all for weatherization efforts, but what do we tell the CVPS ratepayer who had an increase in his or her rates 10 years ago to bail out CVPS, but who has already weatherized his or her home? Thanks for the rate increase, but you get nothing!
And how about the fact that GMP will supposedly invest $21 million in weatherization efforts, but be free to seek rate increases to recoup that very same $21 million?
Third, Shumlin is a millionaire. The refund check would mean nothing to him. But it might mean something to the average CVPS ratepayer.
Fourth, if it’s inappropriate for the Governor or Legislature to interfere with a case before the PBS, why did he and they do exactly that with Vermont Yankee? The guy wouldn’t recognize hypocrisy if it smacked him in the face.
This merger may or may not be a great thing for Vermont. The public doesn’t know, and the public case has not been made, except for the “projected” $144 million in future savings. Why is Shumlin so dead-set on this merger? Explain to the public why its the greatest thing since the discovery of electricity, Governor.
It’s my money and I want it back. We should get interest on that loan we made to CVPS 10 years ago. I wish I could get an interest free mortgage.
I whole heartedly agree with Sutton_hoo’s position below.
We all need to email Shumlin and our representatives, especially the ones that aren’t in Shumlin’s pocket.
Vermonters HATE EVIL CORPORATIONS, at least the ones whose teats they aren’t suckling from. The first step, Governor Shumlin, is to admit you have a problem…
The problems with Vermont Yankee could go away overnight if GAZ METRO bought them out.
I signed the petition to get the money back as direct payments to rate payers but as this debate has developed so has my thinking. The point that, twelve years later there are many people who have moved, died or become unreachable is not incidental. I do think the money should come back to us all but the form is illusive and must be settled in a way that can work today, not in some imaginary static world where everything is the same as it was 12 years ago. The process cost of figuring out who gets paid and how much and actually writing the checks an mailing them has to be considered as well and.. Who will pay it? All tax payers or just rate payers and what rate payers? Only those who were around 12 years ago and reachable now? What formula would be used to estimate the payments?
I think now that the governor is right. The savings from energy efficiency programs and investments in green technology will come back to us much cleaner and faster and with less acrimony than simple payments by check to whoever in whatever amounts.
I do have problems with one power giant selling power to 80% of Vermonters but I realize the power market is complex and equity and cash needs are great and small electric power companies like Vermont presently has are at a disadvantage in the capital markets right now as they compete with giants like The Tennessee Vally authority and others for capital for expansion and upgrades. So, I guess I’m going to support the Governor and Liz Miller on this one.
Here’s a question for you, when Gaz increases rates to recoup the $t21million then whose rates get increased? Those that use efficency vermont or all rate payers?
Lets face it, if they pay up the rate payers are going to repay it over and over again. If you are going to get screwed do you want a check or a program you may or may not even be able to use? Something is better then nothing.
Oh and any returned checks that aren’t claimed within X years goes into energy efficiency programs. That seems to solve most of the problem no?
How can we discuss the sanctity of the PSB process without first dealing with the fact that it was corrupted from the start when Liz Miller was allowed to serve as the public advocate despite her obvious and fatal conflict of interest. (She is married to a general manager of the law firm representing GMP).
The only benefit we can even hope for from the merger is the estimated $144 million (which the governor has rounded up to $150 million) realized from shedding jobs as a near-monopoly is created. But nobody is asking what the likelihood is of these estimates turning out to be true. It is notoriously difficult to predict even short term utility costs and prices. And what if the estimates are wildly optimistic? An unnoticed clause in the deal between the state and GMP provides that GMP can just come back in 2022 and submit a new plan to the PSB. Which, based on past experience would be a new shell-game proposal like the present $21 million farce.
What the legislature needs to do is not just interfere with the suspect PSB process but call a halt to it immediately for as long as it takes for the legislature, the press and the public to come up to speed on this matter of critical importance to the state.
Although the attention has focussed on the $21 million payback, the rest of the deal does not look good to me. The net present value of each ratepayer’s share of the vaunted $144m in savings is about $170 today. And we will see this only as rates that don’t rise as fast as they would have. GMP is taking the rest of the savings that they claim will come from cost reductions to pay for the high levels of debt that they will incur to buy CVPS. Will we have to bail them out again, if the cost reductions are not realized, and they cannot pay that debt?
I cannot have faith that the regulatory process will protect Vermonters when the Governor and his Commissioner of Public Service have made it so clear that they see things from the utilities’ perspectives. This is not right.
Rep. Cynthia Browning, Arlington