Number Of Town-Owned Utilities Shrinking

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(Host) The southern Vermont town of Readsboro is getting ready to sell its electric company.

Readsboro Electric is one of about 17 municipally-run power companies in the state. That number could shrink as the cost – and complexity – of doing business keeps escalating.

VPR’s Susan Keese reports.

(Keese) The Readsboro Electric Light Department was launched in 1915 to bring electricity to what was then a remote but busy industrial village.

Today, the town has almost no industry. Readsboro Electric serves about 340 customers.

The utility has a clerk, who does the billing and customer service. Repairs have been contracted out to Green Mountain Power, since the one qualified lineman on the highway crew retired.

Select board member Ray Eilers says running the power company is the board’s job.

(Eilers) "Basically what we did was paid the bills and kept the lights on. But a lot of technical things like load capacitor banks and fuse coordination studies and FERC rules couldn’t be handled by volunteer selectmen, so we decided maybe we ought to think about selling this."

(Keese) The idea of selling Readsboro Electric was rejected repeatedly in town-wide votes.

Eilers says the opposition was understandable as long as Readsboro’s rates were among the lowest in the state. When he took office in 2005 there hadn’t been an increase in 12 years.

(Eilers) "They just drawed money out of their savings and kept running it to keep the rates low until they ran out of money."

(Keese) When the utility did request a rate hike, state regulators found problems. And they wanted the company to hire a manager.

(Eilers) "When we started pecking away at the problems, we couldn’t afford that."

(Keese) By this March, when Readsboro voters agreed to sell, Eilers says the rates were well above those charged by bigger utilities.

Steve Costello of Central Vermont Public service says the state’s largest power company will almost certainly make Readsboro an offer.

Costello says Vermont has an unusually large number of small utilities. Most are remnants of rural electrification, when small towns that couldn’t attract big power companies acted on their own. Costello:

(Costello) "Clearly a lot of the municipals and smaller companies do a very good job but clearly some of them are interested in getting out of the business. It’s becoming more and more technical. The federal regulations on reliability and the advent of smart meters add to the complexity."

(Keese) Even the much larger and better equipped municipal electric company in Stowe is considering a merger.

Stowe took on heavy debt from its share in a high power transmission line built to satisfy new federal reliability requirements.

So the company has formed a task force with small municipal utilities in Hyde Park and Morrisville to explore consolidating.

Dick Marron is on the board of Stowe Electric.

(Marron) "We also have had some discussions with an investor-owned company to see what that might bring about. Now if we were to sell Stowe Electric to an investor-owned company it would have to be approved by 60 percent of our voters."

(Keese) Back in Readsboro, Ray Eilers knows how difficult that can be. Even as his board is drawing up its request for proposals, it’s divided on whether the sale is a good thing or a loss of local control.

As Eilers sees it, that local control has already slipped away.

For VPR News, I’m Susan Keese.

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