Vermont House and Senate set to take up utility merger today
MONTPELIER — The Senate became center stage Wednesday night in an unfolding political drama that has pit some Vermont lawmakers against the state’s two largest electric utilities.
The Senate was poised late Wednesday to cast a vote on an amendment that would, as a condition of the pending merger between Green Mountain Power and Central Vermont Public Service, require the utilities to send checks totaling $21 million to CVPS ratepayers.
But the debate was cut short when lawmakers, after more than an hour of debate, opted to adjourn for the night and return Thursday morning. The House, too, is scheduled to take up its own merger-related amendment today.
While many legislators say they support in concept a merger that will, according to GMP, cut $144 million from electricity costs over the next decade, they’ve criticized heavily the utilities’ plan to compensate the ratepayers that bailed CVPS out of a financial bind back in 2001.
“At the end of the day there’s one issue here – do Vermont ratepayers get their money back?,” said Sen. Peter Galbraith, a Windham County Democrat.
The issue has been simmering ever since the utilities announced the $702 million merger deal in July. Their plan to satisfy the so-called “windfall obligation” by investing $21 million weatherization programs jilted some lawmakers, who wanted to see direct cash payments.
But opposition didn’t really erupt until last month, when lawmakers learned that the utilities planned to recoup the $21 million investment in the form of higher rates in the future.
They’ve also directed their scorn at Gov. Peter Shumlin, whose Department of Public Service signed on to a memorandum endorsing the utilities’ payback plan.
“I think we’re all agreed this alleged returning to ratepayers being recouped in rates is what shocks most people,” Sen. Mark MacDonald, and Orange County Democrat, said.
Galbraith on Wednesday offered an amendment that would require the Shumlin administration to reopen merger negotiations, and get utilities to agree not only to issue checks to ratepayer, but not to recoup the money in rates.
The amendment would also forbid the Public Service Department from approving the merger proposal without a deal to that effect.
The amendment was divided into three parts, so that lawmakers uncomfortable interfering in the PSB’s deliberation could register their discontent with the payback plan without interfering in an open docket.
Sen. Randy Brock, a Franklin County Republican and gubernatorial candidate, said he previously opposed any legislative intervention in PSB docket. But the utilities and administration have handled the situation so poorly, he said, that he would be compelled to support the entirety of Galbraith’s amendment.
“Their handling of this issue has generated such a degree of outrage, and they appear to be absolutely tone deaf in responding,” Brock said. “Though I hate the idea of interfering in an open docket, I’m not sure they’ve left us any choice.”
Former utility regulators and scions of industry have warned lawmakers in severe terms against meddling in an open docket. Frank Cioffi, executive director of the Greater Burlington Industrial Corporation, has said that by changing the rules of the road midstream, lawmakers risk undermining businesses’ confidence in regulatory process.
The utilities, too, have spoken in stark terms about the consequences of legislative intervention. Don Rendell, general counsel of GMP, told a House committee last week that denying utilities the ability to recoup the $21 million in rates would endanger the $702 million merger.
“It would be a very big deal, and would absolutely jeopardize the transaction if this were to be singled out and pulled out of a deal and treated in a different way,” Rendell said.
Sarah London, general counsel for the Shumlin administration, says even the portion of the Galbraith amendment dealing only with the Department of Public Service is on shaky legal ground.
“To the extent they’re trying to dictate the actions of our commissioner of public service, there are separation of powers concerns,” London said.
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