(Host) An advocacy group is challenging the planned sale of Green Mountain Power. AARP Vermont says that some of the proceeds from the sale should go back to the utility’s customers.
VPR’s John Dillon reports:
(Dillon) AARP says GMP’s customers helped pull the utility out of a financial hole five years ago by paying higher rates, and therefore should reap the benefits now that the company is being sold to a Canadian Company.
Philene Taormina is advocacy director for AARP Vermont.
(Taormina) “The windfall that GMP will receive because of this sale would have been unattainable but for the financial stability that they got from ratepayers paying them and bailing them and bailing them out.”
(Dillon) AARP points to a Public Service Board order from 2001 that granted GMP a 12.9% increase. The board said GMP’s customers should get half of the proceeds above book value from any sale or merger. That’s about $9 million dollars.
AARP says the rates were set higher than they needed to be at the time in order to stave off a possible bankruptcy.
(Taormina) “One could argue that they wouldn’t even be here but for ratepayers back in 2000 paying 12.9% more in rates. We kept them alive.”
(Dillon) GMP points out that the board’s 2001 order came at a time when the company was struggling because of energy contracts with Hydro Quebec. But as energy prices rose worldwide, the company says those contracts will now save customers millions of dollars.
Dorothy Schnure is a GMP spokeswoman.
(Schnure) “In the times since the board order in 2001 to now, the markets have changed. Our analysis this summer shows that the Hydro Quebec is almost 100 million below market from 2001 to the end of the contract.”
(Dillon) GMP wants to invest the $9 million on a new energy efficiency program that it says will return even greater benefits to customers than a one-time refund.
(Schnure) “So that money will be invested in programs that have a 2-1 benefit. So that $9 million will be paid back, but there will be an additional $9 million in value.”
(Dillon) Green Mountain Power announced in June that it would be sold to a Quebec company that markets natural gas. The sale is valued at $187 million.
State and federal regulators have to approve the deal.
For Vermont Public Radio, I’m John Dillon.