Lawmakers at odds on $21M payback
MIDDLEBURY — Most local lawmakers said they are not keen on intervening in a case involving the proposed return to electricity ratepayers of around $21 million that was used to help stabilize Central Vermont Public Service Corp. in 2001 when it ran into some financial trouble.
CVPS, the state’s largest utility, weathered that financial storm (associated with hydro-power contracts) and is now on the verge of being acquired by, and merged with, Green Mountain Power (GMP) — which is owned by Montreal-based Gaz Metro.
The Vermont Public Service Board in 2001 stipulated that the ratepayers would be entitled to $21 million in value in the event of the eventual sale or merger of CVPS. With that scenario imminent, legislators and citizen groups — such as the Vermont chapter of the American Association of Retired Persons (AARP) — are discussing how ratepayers should be compensated for the extra financial sacrifice they made for the utility.
Dotty Schnure, spokeswoman for GMP, said the company would like to return the money to ratepayers through weatherization and other energy efficiency programs — such as those currently assisting communities in equipping their streetlights with more cost-effective LED fixtures.
“Our proposal brings $25 million in value (to ratepayers),” Schnure said.
She noted the PSB is currently reviewing that compensation proposal as part of the overall acquisition/merger application for CVPS and GMP.
Meanwhile, more that 70 House members have pledged their support to a legislative amendment that would require ratepayers to be reimbursed in cash. The AARP — which is backing the amendment — has estimated the compensation at $76 per household.
Based on hours of kilowatt use, residential customers account for roughly half of the state’s electricity “pie.” Commercial and industrial users comprise the remaining half of that pie and would, as larger kilowatt-per-hour users, be entitled to bigger compensation checks, Schnure noted.
Rep. Willem Jewett, D-Ripton and House majority whip, suggested that Omya Inc., which operates a big quarry in Middlebury and processing plant in Florence, could be entitled to a reimbursement check of more than $1 million. And Omya has been a CVPS customer for only six months, according to Schnure, epitomizing the quandary of tracking and properly indemnifying electricity customers who have left or joined the system since 2001.
If the amendment seeking cash payments to ratepayers succeeds, the consequences could be disastrous and far ranging, according to Schnure.
“If the Legislature makes this change without looking at the whole merger in context… it could bring (the merger) down,” Schnure said.
Moreover, she believes that if the Legislature intervenes in the quasi-judicial role of the PSB, it could send a negative message to businesses.
RESIDENTS SPEAK UP
Addison County residents and lawmakers at Monday’s legislative breakfast at the Middlebury American Legion joined the debate over how the $21 million should be returned to ratepayers.
Middlebury resident Elizabeth Oettinger said she had originally found herself backing the AARP’s call for ratepayers being cut checks for their share of the $21 million. But she said she changed her point of view after hearing about the relatively small size of the checks.
“I would have to believe that CVPS could do a better job than we could with that (money), in terms of improving efficiency,” she said. “I cannot bear to have one more penny of anyone’s mental energy wasted on this, because there are so many pressing issues that need to be discussed.”
But Rep. Paul Ralston, D-Middlebury, said the issue is a complex one that will take some time to sort out.
“The question really becomes, ‘Who are the ratepayers; how do we differentiate between consumers, industrial and government users?’” said Ralston, a member of the House Commerce and Economic Development Committee. “As nice as it is to think of the general premise of just giving the money back, the PSB has a responsibility to look at the best value the ratepayers can have in this negotiation.”
He noted the PSB is “of the mind” that the money can best benefit CVPS ratepayers in weatherization and energy efficiency programs.
“I have confidence that, in the end, we will get to something that is equitable and fair,” Ralston said.
Rep. Dave Sharpe, D-Bristol, said he and many of his colleagues are reluctant to “butt in” to the PSB’s autonomous review of the reimbursement matter.
“It’s not something you do easily,” Sharpe said.
Jewett acknowledged AARP’s call for returning the money to ratepayers is appealing.
“It is a nice populist message,” Jewett said. “What politician could be against returning money to the people, especially right before an election? It has a lot of momentum to it.”
But upon further scrutiny, the facts don’t necessarily back AARP’s position, according to Jewett.
He believes the $21 million would be best directed at energy efficiency programs that he said could produce a bigger payoff.
“Many of us in the Legislature believe we should rely on (the PSB) to make these decisions,” Jewett said.
But not all local lawmakers see it that way.
Rep. Harvey Smith, R-New Haven, said, “I think we have to live by the contract we made.”
While Smith agrees the state should invest more in its energy efficiency programs, he said that should not come at the expense of a contract made with ratepayers.
He added there is precedent for the Legislature intervening in matters under the PSB’s review, citing the proposed re-licensing of the Vermont Yankee nuclear power plant as an example.
“I think a contract is a contract and we ought to live by it,” Smith said.
But Ralston argued the contract did not say specifically how the ratepayers would be compensated.
“The agreement that was made anticipated a conversation at the time we are at right now, that the PSB … would itself have a say on how that money is used, and that is the conversation that’s going on right now,” Ralston said. “So when you hear the argument that ‘a deal is a deal,’ it’s true; it’s just the terms of that deal are still under discussion.”
Reporter John Flowers is at [email protected].
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