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Amendments fly in debate over merger of GMP, CVPS

ADDISON COUNTY — Local lawmakers on Tuesday and Wednesday fielded several amendments related to the proposed combining of the state’s two largest utilities, much of it related to a $21 million payback that some believe is owed to electricity ratepayers as a condition of the merger.
The $21 million in question represents additional money that electricity ratepayers were assessed to help shore up a financially strapped Central Vermont Public Service Corp. (CVPS) back in 2001.
CVPS, the state’s largest utility, 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 Public Service Board, in okaying the rate hike 10 years ago, 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, some legislators and citizen groups — such at the Vermont chapter of the American Association of Retired Persons (AARP) — are arguing that ratepayers should be cut checks, estimated at $76 per household and a greater sum for businesses.
But GMP officials have already agreed to a memorandum of understanding with the Public Service Department to instead allow for the debt to be invested in weatherization and other energy efficiency programs to provide what they contend would be of more value (estimated at more than $40 million) to ratepayers than a one-time check.
Agreeing with that sentiment, the House Commerce Committee on Tuesday rejected an amendment to return the $21 million in the form of cash to ratepayers.
But as the Addison Independentwent to press late Wednesday, the panel was considering an amendment by one of its members — Rep. Paul Ralston, D-Middlebury — designed to provide better mediation in disputes related to projects that come before the PSB. Specifically, Ralston’s amendment calls for a work group to design an “independent consumer advocacy office” that would represent three categories of interested parties in cases that come before the PSB: Ratepayers, small businesses and municipalities. Ralston envisions a “bill-back mechanism” through which applicants in PSB cases would underwrite the costs of expert witnesses and legal expenses for interested parties. This provision, Ralston explained, is patterned after a process recently followed for the proposed expansion of an East Middlebury gravel pit. In that case, Ralston explained, the applicant — J.P. Carrara & Sons — voluntarily agreed to pay for expert witnesses requested by neighbors in evaluation of the company’s successful bid to expand its gravel pit off School House Hill Road.
Ralston noted the East Middlebury example led to agreements between the developer and neighbors, making it much easier for the Middlebury Development Review Board to okay the application.
“I am not doing this as a reprimand for the Department of Public Service and it is not a vote of no-confidence,” Ralston stressed of his proposal.
Also at press time, the state Senate was poised to vote on an amendment spearheaded by Sen. Vince Illuzzi, R-Essex/Orleans, that would give Vermont an option to buy a majority interest (51 percent) in the Vermont Electric Power Company’s (VELCO) transmission line assets as a pre-condition of the proposed GMP-CVPS merger. Those VELCO assets are currently owned by Transco LLC.
Illuzzi, during a phone interview, contended that the VELCO transmission line corridor is the “grand prize” in the CMP-CVPS merger deal. He noted whatever entity controls that VELCO corridor — a large swath of which bisects Addison County — will have a great say in the future development of electrical infrastructure in Vermont — and how it can be used to funnel power to consumers south of the Green Mountain State.
Illuzzi noted that Gaz Metro also owns Vermont Gas, which is already proposing to use the VELCO corridor to extend its natural gas pipeline into Addison County and ultimately into Rutland County.
“We will see, at least, bigger transmission lines,” Illuzzi said of the potential consequences of the merger.
“People in Addison County will remember the Northwest Reliability project,” Illuzzi said, noting the recently, controversial upgrade of VELCO infrastructure in several local towns, with a particular impact on New Haven. “It was planned in secret and dropped on an unsuspecting public,” he said.
But officials representing VELCO and GMP said Illuzzi’s proposal is unnecessary and financially imprudent.
Dotty Schnure, spokeswoman for GMP, said a memorandum of understanding submitted by the utilities to the PSB calls for eight of the 13 VELCO board slots to be reserved for public representatives, compared to the current three.
“The memo of understanding really accomplishes what Vince’s amendment wants to do,” Schnure said.
She added the PSB is already charged with safeguarding Vermonters’ best interests when it reviews cases. State Treasurer Beth Pearce, according to Schnure, has already delivered testimony in the Statehouse that public acquisition of a majority interest in VELCO would be ill-advised. The cost of such an endeavor is likely to be around $500 million, with annual operating and maintenance costs, Schnure said.
“We don’t see a positive reason to do it; we se a lot of downside,” Schnure said.
Added Kerrick Johnson, spokesman for VELCO: “We are not for sale.”
Reporter John Flowers is at [email protected].

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