Bigger is not always better. The nation’s large banks have grown so big they can scarcely be managed, and some of the previous champions of mega-bank mergers are saying the banks need to be broken up.
Vermont now has a single large utility providing electric power to about 70 percent of the state’s customers, which relative to other utilities in Vermont, is large. But even after taking over Central Vermont Public Service, the state’s largest utility, Green Mountain Power remains a small player in the world of electric power.
Now just six weeks after the merger was approved by the state Public Service Board, GMP has announced that for the first time in 24 years the utility is seeking a decrease in its electric power rates. It is a small decrease — just 0.4 cents per kilowatt-hour — and it will save customers maybe a couple of bucks a month. But as Steve Terry, a GMP vice president, said about the lower rate, “The arrow is pointing down. It’s a watershed moment.”
GMP was eager to trumpet the news about the lower rate, in part to assure Vermonters that it meant to make good on the many promises made to justify the merger of the two power companies. One of the big promises, which was a condition of the merger, was to provide customers at least $144 million in savings over the next 10 years. The reduced power rate announced this week was a down payment on that promise.
Energy remains a central political and economic issue, as was evident earlier this week when the eastern Canadian premiers and New England governors gathered for a conference in Burlington. A major theme of the conference was the need to share energy resources across borders. What that means more than anything is to make use of the abundant power being produced in Quebec.
Hydro-Quebec, the provincial utility, is an energy behemoth that dwarfs Gaz Metro, the Quebec company that owns Green Mountain Power. Hydro-Quebec is the fourth largest hydropower producer in the world, making it a sort of a Saudi Arabia of hydropower. It owns nearly 40,000 megawatts of installed capacity, which is the equivalent of about 80 Vermont Yankee nuclear power plants. In 2011 it had $2.6 billion in net income.
Hydropower is a sustainable, carbon-free source of electricity, and the development of hydropower in Quebec is an enormous gain in the battle to slow global warming. Power from Quebec already forms a large and essential portion of the power portfolio in Vermont, and Gov. Peter Shumlin said that the development of hydro and wind power in Quebec provides the entire region with an opportunity to make use of an abundance of “cheap, green, reliable power.”
Green Mountain Power, meanwhile, is serving the relatively tiny market of Vermont, and it has plans to move aggressively in the direction of green power. Not only does it buy a large bloc of power from Hydro-Quebec, it also intends to push ahead with solar power, which is a rapidly evolving energy sector.
Rutland is the focus of the company’s solar plans. It has said it plans to make Rutland a solar city, meaning it will have the largest solar capacity per capita of any city in the region. This is another of the promises the utility made in promoting the merger with CVPS, and all signs indicate that GMP intends to make good on that promise.
Protesters in Burlington were out in force last weekend to urge the governors and premiers to move toward greater use of renewable power. Shumlin said his views were in harmony with the notion that we needed to reduce reliance on fossil fuels and enhance energy efficiency. Harnessing the wind and hydropower from Quebec and forging ahead with solar power in Vermont are steps in that direction.
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