MONTPELIER — Flanked by both conservatives and progressives, Republican candidate for governor Randy Brock on Tuesday turned a proposed utility merger into a 2012 campaign issue.
The Franklin County senator’s Statehouse news conference marked the latest front in an intensifying legislative battle over how to make whole the approximately 137,000 ratepayers that bailed Central Vermont Public Service Corp. out of a financial morass in 2001.
The Shumlin administration last week unveiled a deal that would pay back the $21 million debt by requiring merger partners Green Mountain Power and CVPS to invest an equivalent amount in weatherization and other efficiency programs, although the utilities could recoup the investment through higher rates.
On Tuesday, Brock added his voice to the chorus of lawmakers insisting that the money flow more directly to customers’ pockets.
“This $21 million belongs to ratepayers, and it should be going back to ratepayers,” Brock said. “I think Vermonters know best how to spend their own money.”
Brock, who announced his candidacy in December, reserved his rhetorical fire not for the utilities but for Shumlin’s Department of Public Service, which he said has allowed GMP to run roughshod over ratepayer interests.
Specifically, Brock asked that the department “reopen” the memorandum of understanding wherein the utilities propose to repay the $21 million.
Brock said his midday news conference on arguably the most controversial issue in Montpelier right now was more about good policy than gubernatorial politics. He was joined at the podium by Republican Sens. Kevin Mullin and Joe Benning and Progressive lawmakers Tim Ashe and Anthony Pollina.
“I think the only political calculation here is doing the right thing,” Brock said.
Sarah Hofmann, deputy commissioner of public service, said her department could theoretically reopen the MOU but that she believes the state has already negotiated an optimal deal for CVPS customers.
AARP-Vermont last year launched a well-funded public campaign aimed at forcing the utilities to issue checks totaling $21 million to each and every CVPS ratepayer, a concept that has won widespread support among lawmakers in the House and Senate.
But the $21 million in efficiency investments proposed in the memorandum, Hofmann said, would yield at least $40 million in savings and “provide more benefit to CVPS ratepayers than they would get with a $76 check.”
About a decade ago, CVPS customers were forced to subsidize a hydro deal gone bad by paying higher rates than they would have otherwise. The state Public Service Board granted the utility’s unconventional rate request but said that if CVPS ever became stable enough to attract a takeover bid, the utility would have to make ratepayers whole before shareholders could become “enriched” by the transaction.
How to satisfy that “windfall sharing” provision has become a sticking point as the board reviews the proposed merger between the state’s two largest electric utilities.
Brock said he opposes, for now at least, efforts under way in the Vermont House to pass legislation that would force GMP to satisfy the windfall provision by cutting $21 million in checks to CVPS customers.
“Personally, I do not want to see the Legislature intervening in the Public Service Board’s open dockets,” Brock said.
Rep. Patti Komline, a Dorset Republican, says she has the 75 votes needed to pass legislation to that effect, though House leadership is working to broker a compromise that satisfies lawmakers’ concerns without interfering in the open docket.
A spokeswoman for GMP says Komline’s legislation would “likely kill” the $702 million merger.
Brock says he’s supportive of the merger and that the repayment plan should be structured in a way that returns money to ratepayers without inflicting undue financial hardship on the consolidated utility.
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