(Host) Vermont’s two largest electric utilities appear destined to become one. The Central Vermont Public Service board has endorsed a bid to be bought by Gaz Metro, which already owns Green Mountain Power.
VPR’s Ross Sneyd reports.
(Sneyd) Quebec-based Gaz Metro would be the owner of the new corporation, but Green Mountain Power would be in charge.
GMP CEO Mary Powell would lead the merged company, and she says it will carry some version of Green Mountain’s name.
(Powell) "It was created by Vermonters and it is focused on producing value for Vermont."
(Sneyd) Both companies are keen to highlight the projected $144 million in savings that they say the merger would produce over the next decade.
Larry Reilly of CVPS says the potential created by a merger was a major reason why his company walked away from an earlier bid by the Newfoundland company Fortis.
(Reilly) "They are not in a position to be able to consolidate the two companies and therefore they did not have the same ability to generate savings for customers down the road that by combining CV and GMP you can create."
(Sneyd) The $144 million in savings would come through retirements and jobs not being filled as they’re vacated. The companies are committed to no layoffs except among some senior CVPS executives.
Reilly says CVPS wanted to boost shareholders’ value. But he says it was also open to being sold because a larger parent corporation has more borrowing power as CVPS looks to invest in its system.
The message about jobs was welcome news to Rutland Mayor Chris Louras, who says he’ll continue to fight for jobs in Rutland.
(Louras) "I fully anticipate that the city of Rutland will be testifying in front of the Public Service Board to extract some guarantees that the job loss mitigation will, in fact, play out the way we’ve been told it’s going to play out."
(Sneyd) The companies also committed to funding a $100,000 effort to boost downtown Rutland.
Jamie Stewart of the Rutland Economic Development Corporation says he welcomes an additional $100,000 investment in his organization for a "green growth fund."
(Stewart) "We have to fully understand what that means before any of us are going to be able to say, ‘Yes, this is a wonderful thing.’ I think at this point, on the surface, though, I’ve been very pleased with what Green Mountain Power has tried to do to make it as good or as strong a process for Rutland and to really be aware and sensitive to the needs of Rutland in the process."
(Sneyd) GMP’s home office in Colchester would be the new corporate headquarters. Mary Powell says Rutland will remain important as the new operations headquarters.
(Powell) "We’re really excited about making Rutland the heartbeat of the operations as we move forward. So I think that is really a significant decision that was made."
(Sneyd) CVPS shareholders are likely to vote on the deal by late this summer and then it will go to regulators for approval. It could take six to 12 months for it to close.
For VPR News, I’m Ross Sneyd
(Host) Because CVPS backed out of the deal with Fortis, it had to pay $19-and-a-half million dollars in penalties. CVPS says Gaz Metro will reimburse it for that amount once CVPS shareholders agree to the merger.