(Host) Green Mountain Power and its parent company, Quebec- based Gaz Metro, have offered to buy Central Vermont Public Service for $702 million.
That includes a cash settlement and would cover $230 million of CVPS debt. The proposal comes less than a month after another offer from the Canadian utility ‘Fortis’.
VPR’s Nina Keck has this report:
(Keck) Green Mountain Power CEO Mary Powell says they’re offering CVPS shareholders and customers a better deal than Fortis.
(Powell) "Well it’s superior in I think every way you can look at it. It’s a better price to shareholders. It’s $144 million of savings over 10 years. It’s a significant investment in renewable energy in this state."
(Keck) Powell says they’re offering CVPS shareholders $35.25 cents a share. That’s 15 cents more per share than Fortis offered. Powell also says merging the two Vermont utilities would create effeciences that when paired with the natural attrition of their aging workforce could save customers $144 million over the next decade.
(Powell) "We both have more than 40% of our workforces that are going to be retiring in the next 5 years – so one of the things we really looked at very very carefully is how do we harness that for VT to create one stronger company.
(Keck) Together GMP and CVPS employ over 700 people. While Powell says no layoffs are planned as part of the sale, she says some changes will be necessary at the very top levels. As part of the sale, Green Mountain Power and Gaz Metro propose taking 30% of the ownership shares that CVPS and GMP would jointly own in Velco, the energy transmission company, and transfer that to a public trust.
(Powell) "Its our proposal that the dividend stream from the shares of Velco in this public trust – we think it would be a good idea to have that revenue stream benefit low income Vermonters."
(Keck) Powell says if the sale goes through they plan to build a new regional headquarters in downtown Rutland and invest heavily in renewable energy, making Rutland what she called the state’s first solar city. Sophie Brucho, president of Gaz Metro says that while the deal would benefit her shareholders, they are in it for the long term.
(Brucho) "We’re not a pack-man and we’re not there to spin companies. We’re been in Quebec for decades and we’ve been in Vermont with Vermont Gas for 26 years and we knew from the outset looking at the lay of the land with the electric distribution operations in Vermont that it would only make sense to bring some of those companies together."
(Keck) Richard Saudek – a former chair of the public Service board and the first commission of public service says it’s always better with a regulated company, like CVPS, to have it based and run in Vermont. But he says if that’s not possible, having the right companies backing them up could be a good thing.
(Saudek) "In the overall scheme of things the Vermont utilities are all small utilities and they need strong balance sheets behind them and they need the financial heft of these companies that are looking to buy them up and have bought them up."
(Keck) Saudek says combining GMP and CVPS could provide significant cost savings. But some have expressed concern that having Gaz Metro controlling 71% of the state’s utility market could diminish competition. Governor Peter Shumlin said in a press release that he wants to make sure that any sale benefits Vermont taxpayers, boosts use of renewable power and ensures transmission infrastructure is modernized. He says with those criteria in mind, the offer from Green Mountain Power appears to have value for Vermonters and for job creation.
But he says the details need careful review and he’s asked the Department of Public Service to look over the offer carefully. CVPS meanwhile is saying nothing. In a press release CVPS president Larry Reilly says this offer requires the board of directors to evaluate the proposal in depth as soon as possible. No time table was given as to how soon that would be.
For VPR news, I’m Nina Keck in Rutland.