Lawmakers to bring back “windfall return” amendment for CVPS ratepayer payback

GMP CEO Mary Powell, right, and CVPS CEO Larry Reilly. VTD/Anne Galloway

GMP CEO Mary Powell, right, and CVPS CEO Larry Reilly. VTD/Anne Galloway

An amendment that would require CVPS to pay back ratepayers in cash for a 2001 bailout may get a second chance.

Rep. Cynthia Browning, D-Arlington, will be proposing the measure when the Department of Public Service omnibus “housekeeping bill” comes out of House Commerce and Economic Development next week. The amendment now has 72 sponsors in the House, according to Rep. Paul Poirier, one of the bill’s lead supporters.

On Wednesday House Speaker Shap Smith determined the provision was “not germane” to the renewable portfolio standard bill, effectively preventing the amendment from coming to a vote on the House floor.

Read the VTDigger.org story.

Ratepayers floated millions of dollars to CVPS and Green Mountain Power in the early 2000s when the companies’ stocks sunk to junk bond status as a result of the high cost of power from the Hydro-Quebec project. CVPS is now being acquired by Montreal-based Gaz Metro doing business as Green Mountain Power. Stockholders and executives with CVPS stand to make millions in profits once the deal goes through.

The merger of Green Mountain Power and CVPS is now before the Vermont Public Service Board, a quasi-judicial body that will decide whether Gaz Metro’s purchase of CVPS is in the best interest of ratepayers.

Gov. Peter Shumlin, who has close political ties to Green Mountain Power, has said he supports the merger.

The value of the so-called “windfall return” is $21 million, and Browning wants the money returned directly to ratepayers. AARP-Vermont, an advocacy group, is also pressing for a full refund to ratepayers. Businesses would stand to get thousands of dollars worth of refunds, while residents would on average get $76. The state of Vermont would receive about $200,000, according to Browning.

Green Mountain Power has proposed an efficiency program it says would save the 135,000 CVPS ratepayers $40 million.

The windfall issue is now before the Vermont Public Service Board as part of the merger case. In a 2001 docket, the board ordered CVPS and Green Mountain Power to compensate ratepayers should the utilities ever be sold.

AARP-Vermont and Green Mountain Power entered into a $1 million settlement when the company was bought by Gaz Metro in 2006.

Dotty Schnure, communications director for Green Mountain Power, says the company wants to create an energy efficiency fund for CVPS customers that would be similar to a program it began in 2008. Green Mountain Power is investing $8 million over four years in more efficient municipal streetlights, home and business equipment replacement programs and an educational program for students.

The Shumlin administration wants to use the windfall money from CVPS to shore up the state’s low-income weatherization program, which was hit by a $900,000 federal cut this year, according to Elizabeth Miller, the commissioner of the Department of Public Service. The $8 million program is largely funded through the gross receipts tax ($7 million).

Liz Schlegel, communications director for the Central Vermont Community Action Council, says there will be little appetite to raise the gross receipts tax to make up for the federal shortfall this year. The state’s weatherization program provided services to 4,800 low-income homeowners from 2009 to 2012. As fuel prices go up and federal funding for the Low Income Heating Assistance Program declines, Schlegel said it will be more difficult for Vermonters to heat their homes, many of which were built in the 19th or early 20th century.

The Department of Public Service has asked the Public Service Board to consider a weatherization benefit for low- and moderate-income Vermonters. It has also asked that the board ensure that ratepayers across classes — business, manufacturing, residential and agricultural — see the equivalent of a cash payback made in electrical efficiency savings, which it says must be measured and verified.

Both the department and AARP have intervenor status in the Vermont Public Service Board merger proceedings.

Though it’s unusual, the state Legislature has the authority to intervene in the Public Service Board docket, according to the Joint Fiscal Office. The brief, prepared by the nonpartisan research arm of the Legislature, points to two examples of recent instances in which lawmakers stepped in to affect board dockets: in 1999, when an efficiency utility was created and again in 2008 when legislators sought to give the board criteria for an investigation of smart meters.

Editor’s note: Information was added to this story at 6:20 a.m. March 23.

Follow Anne on Twitter @GallowayVTD

Comments

  1. Chuck Kletecka :

    The true “windfall” would be large corporate customers like OMNYA. They would get hundreds of thousand dollars while the average household gets only $76!

    That money should go into a fund for those in greatest need, not to line corporate pockets.

  2. Janet Santor :

    This money should not be prorated nor averaged. I should be returned penny for penny. That is the only fair way and that just isn’t going to happen.

  3. Janet Santor :

    I meant “It” should be returned.

  4. Jay Davis :

    What is so ironic here, our so called unbiased Supreme Court declaring corporations with all the rights of citizens. What a bought out government on every level we see.

  5. David Dempsey :

    If we allow CVPS to invest the $21 million in their proposed efficiency fund, they will get rid of a $21 million liability (money owed to rate payers), and they will keep the asset ($21 million borrowed from rate payers) on their books. This amounts to an increase of $21 million in net worth, which increases the value of CVPS stock. For letting them keep the rate payers cash, we get a vague promise of future savings, with no explanation of how and when we these savings are going to materialize. I’ll take the cash, thank you.

  6. Randy Koch :

    Hats off to David Dempsey for explaining the significance of the $21 million being diverted to inflate the CVPS balance sheet. This is very funny money indeed in that at times the utility has said that the $21 million was already lumped in with the $144 million of claimed ratepayer savings. But wait: this $144M is the one and only benefit anyone can come up with that would come conceivably come from the merger. Yet it’s dishonest to call it $144M: it’s actually $123M. After all, repaying the $21M bailout can’t honestly be called cost savings! It makes you wonder if there is any validity whatsoever to even the remaining $123M. After all, none of that is pledged to accrue to the ratepayers for six long years by which time memories of Memos of Understanding will have gotten foggy and Gaz Metro may own the Vermont governor and legislature more completely than the CVPS executives now drooling at the millions they will probably make out of the merger.

  7. Connie Godin :

    Excellent idea to replace Community Action’s lost revenue with $ from this deal. Communtiy Action has been weatherizing low income households for over 25 years and needs help now! Thanks Gov, hope it passes this way.

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