(Host) Two Canadian utilities are engaged in a bidding war to purchase the state’s largest utility, the Central Vermont Public Service Corporation.
And as VPR’s Bob Kinzel reports, Governor Peter Shumlin clearly favors one of the bids.
(Kinzel) At the end of May, CVPS announced it had received an offer from the Newfoundland-based Fortis Corporation to purchase all of its stock.
Then, Gaz Metro, another large Canadian utility that owns Green Mountain Power, made an unsolicited bid to purchase CVPS.
Gaz Metro offered a slightly higher price per share to CVPS stockholders. It promised to cut costs by consolidating the operations of GMP and CVPS. And it offered to give Vermont taxpayers part of its share of the state’s transmission lines.
The CVPS board of directors of is studying the two offers, and in a preliminary statement, it says the Gaz Metro offer might be the better deal. Governor Peter Shumlin agrees.
(Shumlin) "It’s up to my department and lawyers to dig more deeply. I think the Green Mountain Power offer appears to be a better one for Vermont."
(Kinzel) Shumlin says it’s generally not a good idea to have an out-of-state company own an important Vermont business. He cites Entergy’s ownership of Vermont Yankee as an example. But he says Gaz Metro is different because it has a proven track record as the owner of GMP and Vermont Gas Systems.
(Shumlin) "Our experience, in contrast, with Entergy Louisiana and its ownership of Vermont Yankee has been just the opposite: a company who doesn’t do business like we do business in Vermont, who can’t tell the truth, and doesn’t seem to have the interests of Vermonters in their hearts. So we’ve seen both experiences and my view is Gaz Metro has been a great partner for Vermont."
(Kinzel) If Gaz Metro is successful in its bid to buy CVPS, it will provide electricity to roughly 70 percent of all Vermonters. Shumlin thinks that’s a good thing.
(Shumlin) "The reason that Green Mountain Power is projecting that they can save us $150 million over 10 years in rates is because they’re going to consolidate bureaucracy. We know that low rates mean money in Vermonters’ pockets in tough economic times, and job creation. … So my view is consolidation in the power business is a good thing for Vermont."
(Kinzel) GMP says those savings will be achieved by eliminating some senior management positions at CVPS and by not filling other positions when these employees retire. It’s not clear how many total jobs will eventually be cut at CVPS.
Shumlin also thinks Gaz Metro’s offer to give the state ownership of 30 percent of Vermont’s transmission system will help the development of smaller renewable energy projects.
(Shumlin) "Right now the grids across America are not designed for what I think is going to power our future, which is small, community-based, renewable power. It’s set up for huge generators and moving power across thousands and thousands of miles. So we need to adapt. We need to change. And I think that if taxpayers can have a seat at the table, ownership of our transmission system, that’s a good thing for Vermonters."
(Kinzel) The Shumlin administration is expected to make a formal recommendation about which deal it favors in several weeks.
For VPR News, I’m Bob Kinzel in Montpelier
Gov. Shumlin says Gaz Metro’s offer for CVPS might be the better deal. Let us know what you think in the comment section below.