Now that the Public Service Board has given its blessing to the merger of Green Mountain Power and Central Vermont Public Service, customers will be watching to see if the new, larger power company will live up to its many promises.
Promises notwithstanding, the merger touched a populist nerve among Vermonters skeptical of the machinations of large corporations. Grounds for skepticism have been ample in recent years; we have gotten used to the ideas that corporate leaders are accustomed to enriching themselves without regard to the public interest. Enron, it will be remembered, was an energy company.
It was the PSB’s job to look at the merger and to make sure it was in the public interest. And in its ruling last week the board found that the merger provided “an unprecedented opportunity for substantial and permanent cost reductions.”
The utilities have promised that customers will gain $144 million over the next 10 years, and the deal approved by the board guarantees that $15.5 million of those benefits would accrue in the first three years after the merger. According to the board, that makes the benefits “tangible and explicit.”
The new GMP, having absorbed CVPS, will provide electricity to about 70 percent of the market of Vermont. Never before has Vermont’s power market been consolidated to such a degree, and consolidation raised another fear: that the new GMP would enjoy excessive control over the transmission lines through control of VELCO, the state’s power transmission company.
The issue of VELCO was particularly worrisome because GMP is owned by Gaz Metro, a Quebec utility. The fear was that Gaz Metro would use its control of Vermont’s transmission system to crosshatch the state with new power lines in order to sell power on a large scale to southern New England and New York.
The deal approved by the PSB last week contains a provision designed to diminish Gaz Metro’s control of VELCO. It creates a new publicly owned company called the Vermont Low Income Trust for Electricity (VLITE) that will have 38 percent ownership of VELCO. GMP will retain 40 percent ownership. Through dividends from its VELCO ownership, VLITE will earn $1 million a year for investment in state energy projects. Public Service Commissioner Elizabeth Miller called this one of the best parts of the deal.
Rutland, meanwhile, is watching to see that the merger doesn’t deal a damaging blow to the Rutland region economy. Rutland has been headquarters of CVPS for decades, and Sen. Kevin Mullin has been among those worrying that, with the loss of the corporate headquarters, the loss of high-level executives will hurt the region.
Here is where the promises are particularly important. GMP has promised to place its centers for operations and energy innovation in Rutland and to locate some of these important functions in a building downtown. Only a handful of executives are expected to depart, and a significant corporate presence is expected to continue in Rutland.
Further, the new GMP intends to pursue plans to make Rutland a “solar city,” a hub for energy innovation that will make Rutland an exemplar and beneficiary of solar technology at work.
These promises stand to benefit the entire state.
As the energy sector moves into the realm of sustainable power, GMP could position Vermont as a laboratory for change, creating jobs and boosting the economy in ways that more than make up for the loss of a few CVPS executives.
The furor that blew up over the winter about the $21 million owed to ratepayers who bailed out CVPS 11 years ago did not sway the PSB. The board saw that the benefits of the merger far outweighed the one-time $76 checks that ratepayers might have received as rebates.
At the same time skepticism can be healthy. GMP must remain aware that the public is watching to make sure that promises made are promises kept.
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