GMP’s Powell touts advantages of merger
MIDDLEBURY — Green Mountain Power CEO Mary Powell believes her company’s proposed merger with Central Vermont Public Service Corp. (CVPS) will stabilize utility rates, save customers $500 million during the next 20 years and make the state a stronger place to do business.
Powell hammered home that message during a recent interview with the Addison Independent, during which she shared her vision for the combining of GMP and CVPS under the ownership of the Canadian company Gaz Métro. She has been making the rounds to area media hubs in an effort to get the word out on the proposed merger and the effect it would likely have on consumers and jobs.
“I feel like when you’re trying to do the kinds of things we’re trying to accomplish for the state, it’s important to be out and about as much as I possibly can,” Powell said.
“It is a lot of change for a small state.”
The Vermont Public Service Board has been receiving testimony on the Gaz Métro’s proposal to acquire GMP and CVPS, a move that would give the Quebec-based firm dominion over the delivery of around 75 percent of the state’s electricity. Powell anticipates the PSB will start conducting hearings on the merger in late March, with the prospect of a deal taking effect this June.
While making her rounds, Powell has had an opportunity to ask various stakeholders, and likely interveners in the PSB hearings, how they feel about the proposed merger.
“I always asked them, ‘Are you opposed to the merger?’ and every single one of them has said, ‘Absolutely not, we think it’s great; it makes sense,’” according to Powell.
Supporters believe the deal will make the combined utility a leaner, more effective organization.
There are currently around 540 workers at CVPS and 205 at GMP. Thanks to the anticipated retirements of some of the companies’ many veteran workers, Powell does not envision the need to lay off any employees as a result of the merger.
Powell has not established a specific workforce target for the combined company, but said “We’ve been on the record to say … over five or six years, we’ll harness 25 percent to 50 percent of the attrition.”
At the same time, Powell said the company (through attrition) will be able to shed duplicative administrative, legal and other personnel while maintaining a strong presence of linemen and call-center people on the front lines. Joint purchasing will also save money, she noted.
“For such a small state, we pay so much extra money for inefficiencies that don’t contribute to quality,” Powell said.
Critics of the merger acknowledge the potential efficiencies, but point to the virtual monopoly that the new utility giant will have in the energy industry in Vermont. In addition to the prospect of providing the majority of the state’s electricity, critics note that Gaz Métro already owns Vermont Gas, the only provider of natural gas in the state. Vermont Gas recently confirmed plans to extend its natural gas pipeline from Chittenden County into Vergennes and Middlebury.
Powell acknowledged the concerns, but noted the state regulates electric rates. The utilities therefore cannot name the price for their product, unlike the private sector.
She also believes the extent of the merged utility’s power is being overestimated in some circles.
“Even combined, we will be the second-smallest investor-owned utility in the country, so we are Vermont-sized,” Powell said. “We are serving 225,000 customers, which is smaller than the majority of municipal utilities as well as the majority of cooperative utilities. We are still small and approachable.”
And while the CVPS/GMP company will have the lion’s share of the state’s electricity market, Vermont will remain home to 18 different utility companies, according to Powell, who adds that Gaz Métro plans to take a hands-off approach when it comes to its new acquisition.
STABLE RATES AHEAD
Powell also said she believes the future looks good for stable electricity rates in Vermont, thanks to the state’s recently negotiated deal with HydroQuebec and a new 20-year GMP pact with the Seabrook Nuclear Power Plant in New Hampshire. The Seabrook pact is to kick in later this year and is intended to supplant power that had flowed from the Vermont Yankee nuclear power plant in Vernon. The state Senate voted in 2010 against a license extension for Vermont Yankee beyond 2012, but a federal judge late last week ruled the plant can remain open. State officials — who have voiced concern about the aging plant’s condition and recent on-site mishaps — are expected to appeal the judge’s ruling, and the Department of Public Service also has an important voice in the matter.
“For us … because of our Seabrook deal, we are neutral (about Vermont Yankee),” Powell said — before news of the federal ruling on the Vernon plant. She said GMP negotiated a better rate with Seabrook than had been offered by Vermont Yankee.
“If they pull a rabbit out of a hat, they are going to have to offer some incredible deal to the utilities and probably, on a merged basis, we would have some opportunity if there was this great deal with the state,” Powell said. “But we don’t need them.”
Plans call for GMP/CVPS to ramp down the percentage of nuclear power that makes up its total energy portfolio.
“We take roughly 100 megawatts from the plant now and we are going to drop down to somewhere to 55 to 60, and it will go down from there,” Powell said.
At the same time, plans call for the company to increase its renewable energy portfolio. GMP has been building a series of wind turbines on Lowell Mountain, which have drawn some opposition, and is looking for additional solar, wind and hydro opportunities, according to Powell.
“We will actually be at 20-percent premium renewables by the time our Kingdom Community Wind (Lowell Mountain) project comes on line, so we will be one of the leaders in the country, between the number of premium renewables in our portfolio and as a result of HydroQuebec being designated a source of renewable power,” Powell said. “We’ve always been about ramping up renewables.”
Reporter John Flowers is at [email protected].
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