This morning, the Vermont Public Service Board OK’d the proposed merger of Vermont’s two largest electric utilities, granting final approval for Green Mountain Power (GMP) to acquire Central Vermont Public Service Corporation (CVPS). The deal is seen as an unqualified victory for Gov. Peter Shumlin, who supported the deal, and GMP President and CEO Mary Powell, who took over leadership of GMP in August 2008. Powell will continue to run the newly combined utility under the GMP name.
Supporters of the deal had touted the merger as a “once-in-a-lifetime opportunity” that would reap more than $144 million in savings and efficiencies for Vermont ratepayers in the first 10 years, and almost $500 million over 20 years.
Evidently, the PSB took those words to heart. In its 173-page order, which can be read in detail here, the board described the merger as “a historic opportunity to achieve significant, immediate and enduring benefits for all retail customers of CVPS and GMP.”
Shortly after the board’s announcement, Shumlin hailed the decision as “great news for Vermont ratepayers.”
“Today’s ruling by the Public Service Board affirms that the merger between Central Vermont Public Service and Green Mountain Power will bring tremendous benefits to ratepayers and is in the best interest of Vermont,” Shumlin said in a press statement, “I continue to believe, and this ruling reflects, that the terms as approved by the Board will produce extraordinary benefits for consumers and the state.”
For her part, Powell said the length of the order — 173 pages — speaks to the PSB’s thoroughness in reviewing the details of the merger beforehand.
“It definitely shows that [the PSB] did an an extensive and deep dive into pretty much evevery aspect of the transaction,” Powell said. “It’s very clear that they were struck by the opportunities for Vermont and the rigor with which we’ll be held for that.” Powell added that the PSB order includes 94 conditions, “all of which we can certainly live with.”
Critics of the deal, including the advocacy group, AARP, condemned the decision as bad for ratepayers and Vermonters in general. In particular, the PSB did not approve efforts to get GMP to return the $21 million in customer-financed bailout of CVPS that took place a decade ago, before the company nearly went bankrupt. According to a deal struck at the time, CVPS was supposed to reimburse its customers that amount in some form before the company could be sold.
Critics were also concerned that a foreign entity — Gaz Metro, GMP’s parent company — would now have a controlling interest in the Vermont Electic Power Company (VELCO), which owns and operates the state’s transmission grid.
“Today was a great day for Gaz Metro and CVPS shareholders and a lousy day for the ratepayers that bailed CVPS out when it was in financial crisis,” said Greg Marchildon, AARP Vermont state director in a written statement. “Company shareholders and executives will reap $150 million in profit from this merger while 135,000 Vermont ratepayers get nothing. In fact, they will be paying more rather than getting paid back. AARP and its 36,000 members in the CV territory are very disappointed in this decision.”
This article appears in Jun 13-19, 2012.
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For the ratepayers who bailed out CVPS, ‘ no good deed goes unpunished.”
First question, who is and where is the lawyer who wrote the original agreement stating that we the ratepayers would get our collective $21 Million back fbefore CVPS could be sold? Did he/she get paid, then the ratepayers deserve no less or the lawyer should be held accountable un to and including severe malpractice. I just received my latest CVPS bills, time 5, apartment biildings,noticed a couple bills back that we already werebeing charged MORE for Irene, under the listing “storm” charges. Who approved that? And is it being counted in a separate ledger column at CVPS?GMP? Nowwe are tohave a second charge added on to help pay for IRENE.Did Vermont not have insurance of some sort to pay for this mess? Why are the ratepayers always made to cover everything? This is outrageous and I will not be voting for MR Shumlin next time around nor should anyone else. Vt and CVPS are beginnning to sound like the big banks that nearly failed save for, oh yes, being bailed out by the taxpayers. Well, when in the love of humanity is the group now known as taxpayers and ratepayers going to get a break, nevermind a damn bailout?
In 2001, the PSB was concerned that CVPS shareholders not be enriched by its decision, so it therefore ordered: “To avoid such unjust enrichment, and in
consideration of ratepayers who will pay higher rates than are justified by
routine rate-making procedures, we find it essential that the rates approved
today be accompanied by a mechanism by which ratepayers will share in the
above-book proceeds of any future sale or merger of the Company ….” (In re
Central Vermont Public Service Co., 211 PUR 4th 53, 84-85 (from AARP final
petition, p.2)
In the merger decision, the Board wrote:“Accordingly, on the whole,
after considering all the evidence and relevant circumstances, we find the CEED
Fund to be an adequate mechanism for achieving windfall recovery, not because
the Petitioners and the DPS have offered a perfect or ideal proposal, but
because it is one reasonable option
and a negotiated term within a unique transaction that will directly deliver
substantial and
permanent savings to every ratepayer now served by CVPS and GMP.”
The lawyer you’re looking for is the Public Service Board itself.
If history has shown us anything, it is that large corporate monoplies work best when plugged into the political system at the highest levels.
Frankly, the “municipal monopoly” granted to the City of Burlington for the Burlington Telecom fraud engineered by the Mayor and his lackeye, and their politically well connected attorneys, is even worse. State Statutes and City Charter Ammendments incorporated in BT’s Certificate of Public Good (issued by the PSB) were put there to allegedly prevent exactly what wound up happening to the disenfranchised taxpayers of Burlington.
Had it been a “corporate monopoly” engaged in the illegal and morally abhorant activities that transpired in the BT case do you think the legal outcome would have been the same as the “pass” that the protected player politicians and their lawyers received?