(Host) A consumer advocacy group says ratepayers deserve a refund if the sale of Vermont’s largest utility goes through.
AARP Vermont says customers helped rescue Central Vermont Public Service when it got into financial trouble more than a decade ago.
So now that the company is healthy enough to be sold, AARP says those customers should get their money back.
VPR’s John Dillon has more:
(Dillon) A central test for regulators is whether the proposed sale of CVPS to a Canadian company is in the public interest.
AARP Vermont director Greg Marchildon says there’s also an element of fundamental fairness involved. He says when CVPS got into financial trouble in the late 1990s because of an expensive power contract with Hydro-Quebec, regulators approved higher rates in order to keep the company solvent.
(Marchildon) "I mean it’s important to note there would be no merger going on right now if it weren’t the ratepayers bailing these folks out after they made bad decisions."
(Dillon) Under the plan, CVPS would merge with Green Mountain Power, which is owned by Gaz Metro of Montreal.
When the Public Service Board approved GMP’s sale in 2007 it ordered that the utility fund a program to help low income ratepayers. Marchildon argues same principle applies in the CVPS sale. In the CVPS case, he says the utility’s stockholders will reap a windfall premium if the deal goes through. And he says ratepayers should get a $21 million refund.
(Marchildon) And we think that that money ought to go back to folks in the form of checks, in the form of real cash.
(Dillon) GMP spokeswoman Dorothy Schnure says customers will do better under this merger than they would have under a previous CVPS sale proposal.
The merged companies have promised to achieve $144 million in savings over 10 years. Schnure says that will lead to future rate adjustments that will benefit customers.
(Schnure) "The $144 million in guaranteed savings to customers of both companies far exceeds the $21 million that we’re required to give customers in value."
(Dillon) But AARP says ratepayers should get both the refund and the savings that are realized through the operational efficiencies of a combined company.
James Dumont is a lawyer who represents AARP at the Public Service Board.
(Dumont) "In any merger, those savings have to go to ratepayers anyway. So what they’re saying is we’re going to meet the test for a merger and not pay anything in addition to ratepayers. So the ratepayers who have made possible this windfall to CVPS shareholders are getting nothing back."
(Dillon) The Department of Public Service, which represents utility customers, is looking at the refund issue as well.
The state’s concern is whether the utilities’ projected $144 million savings is adequate, and meets the PSB standard of returning a windfall from the sale to customers.
For VPR News, I’m John Dillon in Montpelier.