AARP asks for second look at GMP-CVPS merger
by Alan Panebaker vtdigger.org The AARP Vermont filed a motion Tuesday afternoon asking the Vermont Public Service Board to revisit its 172-page order approving a merger between the state’s two largest utilities.
In its motion, AARP asked the utility regulators to reopen the record in the case and order the utilities to pay $21 million in cash or a refund to Central Vermont Public Service Corp. (CVPS) customers rather than spending it on weatherization.
The group’s filing says the board failed to address the plain wording and intent of prior orders. Those orders, AARP says, allowed state utilities to increased rates by about $100 million to save them from bankruptcy as a result of a bad contract with Hydro-Quebec with the condition that in the event of a profitable merger, ratepayers would receive up to $16 million (adjusted for inflation) of the profits.
Now that CVPS plans to merge with Green Mountain Power (GMP), the group has said the utilities customers should get a direct refund.
James Dumont, an attorney representing AARP Vermont, said the gist of the board’s order is it is inconsistent with its 2001 decision.
“What we’re saying is the board’s orders in this case cannot be squared with what they said in 2001,” he said. “We spent a lot of time going through the board’s order line by line. We picked out what I think are the salient points.”
Dorothy Schnure, a spokeswoman for Green Mountain Power, said late Tuesday afternoon that she could not comment on the specifics of the AARP motion, which she had not yet seen.
She said, however, that the board had already gone to great lengths in its opinion to explain fully its reasons for denying AARP’s request that money go directly to ratepayers.
“The board was pretty clear after months of exhaustive testimony that it had already analyzed this,” she said. “They went into great detail into all the questions that AARP raised.”
Last fall AARP embarked on a media campaign pushing for its constituents to write letters to the board asking that they get that money (now $21 million) in cash or a rebate.
Instead, on June 15, the board approved an agreement between GMP and CVPS and the Vermont Department of Public Service that would invest that money in weatherization and other efficiency measures while allowing the utility to recoup it in rates.
The AARP motion states, “In the present matter, AARP has argued that the intent of the ruling cannot be satisfied by the proposal by CVPS and its proposed new owner, Gaz Metro, to charge more money to ratepayers and to invest it in projects that may benefit some of them while allowing the new owner to earn another return on that new infusion of ratepayer money and while also allowing CVPS shareholders to retain 100% of their above-book proceeds.”
In 2007, when Green Mountain Power was bought by Canadian utility Gaz Metro, the Public Service Board allowed the utility to invest in an efficiency program instead of a direct payment to satisfy the “windfall.” AARP said that in approving the current merger between GMP and CVPS, the board relied on that 2007 decision without analyzing whether it was sound.
“[T]he Board ended up relying on its 2007 precedent (after finding it was “free to part freely” from it) without actually examining whether the precedent was correctly decided,” the motion reads. “Nowhere in its findings and conclusions did the Board examine the wording of both of the 2001 orders and determine whether, under established legal principles, the GMP precedent was persuasive.”