Former Public Service Board Chair Richard Saudek testifies on the implications of the Legislature intervening in an open docket. Photo by Alan Panebaker

Richard Saudek, a former state utility regulator, said there’s no easy answer to the question of whether the Legislature should pass a law requiring Vermont’s two largest utilities to give $21 million in “windfall” money to ratepayers.

Saudek, the first commissioner of the Vermont Department of Public Service, explained to lawmakers why they shouldn’t intervene in the Public Service Board case, which is an open docket now before the quasi-judicial body.

“The wisdom of jumping into a case at this point, I think, is questionable, regardless of which side you’re on in the issue,” Saudek said.

In what has become one of the hottest issues this legislative session, some lawmakers have pushed for a bill that would direct the Vermont Public Service Board to place a condition on a merger agreement between the two power companies that would require a $21 million cash payout or rebate to ratepayers.

Central Vermont Public Service, the state’s largest utility, and Green Mountain Power, Vermont’s second biggest electric company, were bailed out by ratepayers when the two utilities were on the verge of bankruptcy. In 2001, the Vermont Public Service Board approved a rate increase as a result of an “imprudent” contract state utilities entered into with Hydro-Quebec. The agreement was a sharing mechanism that could be triggered by the sale of either utility. In 2007, Gaz Metro purchased Green Mountain Power, and the company struck a deal with the state to return money to ratepayers through efficiency savings and agreed to a settlement with AARP for a pilot program for low-income Vermonters.

Last year, Green Mountain Power, a subsidiary of Montreal-based Gaz Metro, made a bid to merge its Vermont operations with CVPS. Under the 2001 sharing mechanism, CVPS must repay ratepayers if it enters into a profitable merger.

Now lawmakers and AARP are pushing for a cash rebate to CVPS ratepayers. That move would essentially override a deal made by the Shumlin administration whereby Green Mountain Power and Central Vermont Public Service Corp. would invest $21 million in an efficiency fund that would go in large part to a low-income weatherization program.

In testimony about the $21 million “windfall” on Tuesday, former commissioner Saudek told members of the House Commerce and Community Development Committee that the Legislature should let regulators do their jobs.

Legislative intervention could undermine the authority of the Department of Public Service, according to Saudek. The department has a significant amount of clout, he said, and utilities have to deal with it. A legislative “fix” could change that for the future.

“If you’re a utility, you would go to the Legislature first before you go to the department,” he said.

On the other hand, he said, it is the responsibility of the Department of Public Service to explain to the Legislature and the public why its memorandum of understanding with the utilities is in their interest.

“It’s incumbent on the department to at least explain to you people why this is just as good of a deal as the other,” he said.

That said, Saudek said he didn’t necessarily think ratepayers shouldn’t get a refund.

As for the fact that Gaz Metro, a Canadian utility, will control a majority of the distribution utilities in the state, Saudek said, “The fact that big decisions are made elsewhere will ultimately have an effect on how the utilities behave toward Vermont.”

Saudek gave testimony on the first day of weeklong House committee hearings on the implications of legislative intervention into the Public Service Board process.

So far, four representatives have tried, without success, to get their proposal to the House floor as an amendment.

House Bill 718 is “housekeeping” legislation for the Department of Public Service and the Public Service Board.

Reps. Cynthia Browning, Patti Komline, Chris Pearson and Paul Poirier, see the bill as a vehicle for an amendment and they plan to hold a meeting at 10 a.m. on Thursday with the amendment’s sponsors (Poirier says there are 74) to announce plans to move the bill forward before the session ends. (Adjournment was originally slated for April 27, but that early end date now appears unlikely.)

Browning tried to introduce a floor amendment addressing the issue to this year’s energy bill but House Speaker Shap Smith said it was not germane to the underlying bill. H.718 is more relevant to the issue, and Browning and others say it was stalled in order to block her floor amendment.

The bill, H.718, stalled in the House Committee on Appropriations, but the House voted last week to return it to its original committee and take testimony on the merger issue.

Committee Chair Bill Botzow said the purpose of the hearings, which will continue throughout the week, is to get a grasp of the complicated utility issue.

Botzow said hearings will let the committee and the House understand the implications of the merger.

“I think the Speaker decided if there’s going to be a vote on this issue, it should be an informed vote,” he said. “We want to understand what it is we’re talking about and what are the implications of our decisions.”

Last week, the committee took a straw poll with a majority of the members saying they were reluctant to intervene in the open docket, Botzow said. He said it will be up to the committee to decide whether an amendment is friendly or unfriendly to the bill.

Rep. Heidi Scheuermann, a member of the committee, said she thinks ratepayers should get cash refunds.

One of the issues, she said in committee, is that many people feel the Public Service Board is not accessible enough.

“People don’t feel they’re getting a fair shake, and they’re going to their people’s representative to do that,” she said.

The windfall issue caught fire when lawmakers began to realize that the $21 million investment would come from an increase in rates. That investment would then create $25 million in future benefits for ratepayers, according to the agreement.

The weatherization program is based on one approved by the board in 2007 when Gaz Metro purchased Green Mountain Power.

The Senate has also looked into an amendment that would direct the Vermont Department of Public Service to reopen negotiations with the utilities.

Rep. Tony Klein had said he would introduce a resolution addressing the windfall, but on Tuesday he said the proposal hadn’t gone anywhere.

Editor’s note: Anne Galloway contributed to this report.

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Elizabeth Miller, commissioner of the Department of Public Service, gives testimony in Senate Commerce and Economic Development. Photo by Alan Panebaker

Some lawmakers say a proposal by the Shumlin administration and the state’s two largest utilities to create an efficiency fund is a shell game.

On March 26, the Vermont Department of Public Service, Green Mountain Power and Central Vermont Public Service Corp. proposed a memorandum of understanding that would allow the utilities to invest money in measures including weatherization as part of a windfall sharing mechanism.

The idea was to fulfill a requirement that utilities who got bailed out by ratepayers in the 1990s share profits with ratepayers if they are bought for above book value. The $700-million proposed merger meets that threshold.

Rep. Oliver Olsen, a Republican from Jamaica, said the only problem with the deal is the money being invested doesn’t come from the utilities at all. It comes from ratepayers.

When Vermont utilities entered into a contract with Hydro-Quebec which the Public Service Board deemed “imprudent,” they were on the verge of bankruptcy. The board allowed the utilities to increase rates on the condition that in any future merger above book value, the utilities would have to return up to $16 million (now $21 million adjusted for inflation) to ratepayers.

The money has become a hot-button issue in the Public Service Board proceeding and the Statehouse with both the AARP and a coalition of lawmakers pushing for a direct cash payment to current CVPS customers. CVPS is the utility that would be bought and is thus subject to the windfall requirement.

“It’s quite brilliant,” Olsen said. “They created a whole firestorm amongst advocates like the AARP and the community action agencies about how the money should be refunded. They kicked up a whole fuss around how the money should be rebated.”

Rep. Oliver Olsen. Photo by Josh Larkin.

What slipped away, Olsen said, was that $21 million was never going back to ratepayers in the first place. Under the current proposal, the utilities will invest $21 million of ratepayer money, and the proceeds that ensue will benefit ratepayers.

A group of lawmakers from across the political spectrum claims to have enough votes to put a stop to the proposal and require the utilities to pay cash rather than invest in the efficiency fund.

Olsen said he hasn’t signed on to the bill, but he is concerned the Department of Public Service isn’t doing enough to protect its constituents.

“At this point, the Department of Public Service is the advocate for the ratepayers, and I think in this case, they’ve come up short,” Olsen said. “I hope that they will look for an opportunity to bring Green Mountain Power back to the negotiating table and hammer out an MOU that more closely aligns with the objectives outlined in the [bill] and provides a more direct rebate to customers — a rebate that actually has monetary value.”

Olsen said the proposal in the MOU would fund state programs that have seen funding shortfalls. For example, community action agencies will see $12 million. Those programs have seen cuts in federal funding this year, and attempts to increase the gross receipts tax to fund them have failed. Funding these types of state programs at a cost to ratepayers, he said, could even pose constitutional issues.

The idea of the utilities investing ratepayers’ money in projects like weatherization piqued some senators’ interest as well.

The Senate Committee on Commerce and Economic Development held a hearing Thursday with Elizabeth Miller, commissioner of the Vermont Department of Public Service.

Three members of the committee have proposed another bill that would have the state study ownership of up to 51 percent of the shares of the state’s electric transmission system, which is owned for the most part by Green Mountain Power and CVPS. The committee chair, Sen. Vince Illuzzi, is an intervenor in the Public Service Board docket. He initially requested that the board assign independent counsel for the department since Miller’s husband works for the law firm that represents Green Mountain Power.

Sen. Vince Illuzzi. Photo by Alan Panebaker

Pressing Miller on the windfall issue, Sen. Peter Galbraith called the proposal a “sweetheart interest-free loan” where the utilities got a loan for no interest, and in the end did not have to pay it back.

Sen. Tim Ashe called it a “mind twister.”

“If I give you a dollar and you put that dollar back into efficiency in someone’s home, it seems like someone else is using my dollar in a way that benefits me,” Ashe said. “But I’m still a net loser when it comes to 21 million dollars in the equation.”

That “mind twister,” Miller agreed, was a confusing concept. The department has supported the idea of an efficiency fund even if it is ratepayer money being invested since the benefits reaped from things like weatherization will presumably create more societal good overall.

Miller said in the board’s 2001 order it did not mandate a cash refund but rather that some value came back to ratepayers.

“They said you had to make sure the value actually came back and ensure the value equals or exceeds the windfall amount over time,” Miller said. “The memorandum of understanding we’ve struck here is that it’s appropriate to follow that precedent. The efficiency fund does that.”

Dorothy Schnure, a spokeswoman for Green Mountain Power, emphasizes that the board did not actually require the utilities to pay ratepayers money. They simply had to create a benefit.

The way it pans out, Schnure said, is the utility will invest $21 million in a fund, which will be reflected in electricity rates. The utility will guarantee a $46 million gross benefit from that. Subtracting the $21 million ratepayers essentially invested in rates, $25 million will benefit customers, she said.

In 2007, when Gaz Metro bought Green Mountain Power, the board approved a similar efficiency fund, which was paid for with ratepayer dollars.

Schnure said comparing the windfall to a loan is inaccurate, and the benefits of the merger with the efficiency fund will be a good deal for Vermont. Originally the utilities claimed $144 million in savings the merger will create in 10 years and $1 million a year investments in a low-income fund would cover the windfall requirement.

“We believe our original proposal to guarantee customers $144 million in savings over the first 10 years (with savings continuing after that) meets the PSB requirement,” Schnure said. “With pushback from the DPS, we added additional value to customers with the [efficiency fund] proposal, which on its own also meets the PSB requirement.”

Schnure said the $144 million in projected savings from more efficient operations would not be possible without the merger.

Green Mountain Power has stated publicly that legislative intervention could kill the deal.

But James Dumont, an attorney who represents AARP, said the cash payment wouldn’t be a dealbreaker, and the utilities know it.

The merger agreement, Dumont said, outlines “material adverse effects” that would allow one of the companies to back out of the deal.

“My issue is intervening into a Public Service Board docket that is contested and very complex, more complex than people know.” ~ Rep. Tony Klein

A proxy statement to CVPS shareholders, however, says implementation of the windfall sharing mechanism or a change in law would not be considered in determining a material adverse effect.

For now, the four representatives who have been waiting for a bill to hit the floor that would lend itself to tacking on an amendment requiring cash payments to utility customers will have to keep waiting.

House Bill 718, which deals with miscellaneous issues surrounding the Department of Public Service and Public Service Board, is a prime target, but that bill is stalled in the House Committee on Appropriations.

Rep. Martha Heath, who chairs the committee, said Monday she was waiting to hear from House leadership how to proceed.

House Speaker Shap Smith has said that he would prefer the Legislature not interfere with open dockets where the board is currently taking testimony.

Rep. Tony Klein, who chairs the House Committee on Natural Resources and Energy, said Monday he was working to draft a resolution the Legislature could send to the Public Service Board that he said would get the point across without a specific mandate.

“I don’t have any issue with the subject matter,” Klein said. “I’m not saying giving checks is better than not giving checks. My issue is intervening into a Public Service Board docket that is contested and very complex, more complex than people know.”

Klein said the resolution would effectively mirror the amendment that Reps. Cynthia Browning, Paul Poirier, Patti Komline and Chris Pearson have proposed but would not actually require the board to do anything.

“I’m very concerned about the unintended consequences of the Legislature making a direct edict to the Public Service Board that it shall or shall not do anything in this particular situation,” Klein said.

Browning, who originally sponsored the amendment that would require cash payments, said she and others may have to wait and see what House leadership does.

“I remain committed to taking action that will make it more likely that a reasonable and equitable direct payback of the CVPS bailout to ratepayers will actually occur,” Browning said. “I would prefer an amendment to a bill: a resolution has no teeth. But that may be all that leadership allows.”

Browning said she still believes the proposed MOU is unfair to ratepayers even though it would result in useful investments in efficiency.

“It doesn’t return the money, then it charges us higher rates on the investments made with our money,” Browning said.

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Contact
Elizabeth H. Miller
Commissioner of the Department of Public Service
Phone:802-828-2321
Email: elizabeth.miller@state.vt.us

We are pleased to see that GMP and CVPS have retreated from their initial position that would have denied CVPS ratepayers additional value for their contribution to the Hydro Quebec bailout. The Department has maintained throughout the merger proceedings that CVPS customers deserve the full value of $21 million they are owed under the Public Service Board’s HQ order. The Department has sought to leverage these funds to provide an even greater return to CVPS ratepayers through clean energy and efficiency programs that will help lower energy bills and environmental impacts. The Department will carefully review the GMP/CVPS proposal to determine whether it is the optimal path, and has already reached out to the parties in the docket and multiple stakeholders including our Community Action Programs to discuss the best use of these funds.

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“We believed our initial merger proposal, which contains $144 million in guaranteed customer savings over the first 10 years and millions more afterward, met the standard for PSB approval,” GMP president and CEO Mary Powell said. “Having considered regulators’ and stakeholders’ views since we filed our proposal, and given our strong desire to provide significant, ongoing benefits to our customers, we proposed the creation of a new Community Energy and Efficiency Development Fund (CEED Fund) to help CVPS customers lower their energy bills and reduce their environmental footprints.”

The CEED Fund addresses concerns raised by the Department of Public Service (DPS) and AARP stemming from a 2000 Public Service Board order. That year, the PSB approved an increase in electric rates to help the utilities cover the cost of electricity from a contract with Hydro-Quebec, but said that value should be returned to CVPS customers if the company were ever sold.

“This proposal is in addition to the $144 million in guaranteed customer savings,” Powell said. “It represents a $21 million investment in energy efficiency on customers’ behalf, which will bring around $40 million in customer benefits that can only happen with the merger of these two great companies.”

Under the proposal, included in PSB testimony filed Wednesday and modeled after a program created when GMP was sold in 2007, the CEED Fund will invest in customer efficiency measures, community-based renewable energy, weatherization and other improvements that will create additional value and benefit for CVPS customers.

“This proposal demonstrates our continued commitment to the people of our state,” Powell said. “Through extraordinary efforts to improve efficiencies both in our own company and in our customers’ homes and businesses, we will significantly lower energy costs from what they would otherwise have been.”

The CEED Fund would provide resources to lower the cost for CVPS customers to make energy efficiency improvements. According to a recent analysis produced by Optimal Energy for the DPS’s 2011 Comprehensive Energy Plan, energy efficiency investments generate $5 in increased economic activity for every dollar spent, and create 43 job-years per $1 million invested. The economic boost comes not just from increased use of in-state resources to provide efficiency services, but in the subsequent spending and reinvestment of energy cost savings.

Besides the guaranteed savings and new efficiency proposal, the merger of GMP and CVPS will provide other substantial benefits for customers, including:

• annual $1 million for a low-income benefit program through VELCO dividend and contribution,
• enhanced storm response,
• integration of separate systems and services,
• an expanded commitment to community service programs established by CVPS,
• and a new Solar City Program and Energy Innovation Center in Rutland.

The new GMP will produce the $144 million in guaranteed savings without layoffs — except for a handful of executives — or forced relocation of employees. The company will be headquartered in Colchester, and the Operations Headquarters will be located in Rutland or Rutland Town.

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Middlebury – Sept. 27st (7-9 pm)
Middlebury High School (73 Charles Avenue)

Brattleboro – Sept. 28th (7-9 pm)
Brattleboro Union High School (131 Fairground Road)

Rutland – Sept. 29th (7-9 pm)
Rutland High School (22 Stratton Road)

Colchester – Oct. 3rd (7-9 pm)
Colchester High School (131 Laker Lane)

Danville – Oct. 6th (7-9 pm)
Danville School (148 Peacham Road)

Copies of the Draft plan are available at: http://www.vtenergyplan.vermont.gov/.   Persons requiring special accommodations please call (802) 828-2811 prior to the event to make arrangements.  Comments also may be submitted in writing to the Department at PSD.energyplan2011comments@state.vt.us or CEP Comments, Department of Public Service, 112 State Street, Montpelier, VT  05620-2601.  Comments must be received by 5:00 pm on October 10, 2011.

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802-828-4039

kelly.launder@state.vt.us

Vermont Department of Public Service Names Asa S. Hopkins
Director of Energy Policy and Planning

MONTPELIER, VT – The Vermont Department of Public Service (DPS) has named Asa S. Hopkins, Ph.D., as the new Director of Energy Policy and Planning. Dr. Hopkins will lead the Department’s policy and planning division, which serves as Vermont’s State Energy Office. In conjunction with the Commissioner of Public Service, the Governor’s office, the Legislature, and other energy stakeholders, Dr. Hopkins will develop and implement statewide energy policy, including energy efficiency and demand resource management programs, renewable energy policy, and electric utility planning.

“Asa will bring scientific rigor and a fresh perspective to energy planning here in Vermont,” said Commissioner Elizabeth Miller. “His experience in energy efficiency and in federal energy policy at the Department of Energy will be of tremendous benefit to the people of Vermont. The Department of Public Service is delighted to welcome him as Director.”

Before joining DPS, Dr. Hopkins worked at the United States Department of Energy for Under Secretary for Science Steven Koonin, serving as Dr. Koonin’s assistant project director for the DOE’s Quadrennial Technology Review. Before that he served as an analyst at the Lawrence Berkeley National Laboratory, providing economic and technical analysis of federal energy efficiency standards for appliances. Dr. Hopkins has a B.S., summa cum laude, in Physics from Haverford College and an M.S. and Ph.D, both in Physics, from the California Institute of Technology. He will join the DPS at the beginning of October.

The Department of Public Service is an agency within the executive branch of Vermont state government. Its charge is to represent the public interest in matters regarding energy, telecommunications, water and wastewater.

Judy Bruneau

Commissioner’s Office

Vermont Department of Public Service

112 State Street

Montpelier, VT 05620-2601

802-828-4071

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Department of Public Service Commissioner Elizabeth Miller, left, met with VPIRG leaders and canvassers on Thursday. VTD/Taylor Dobbs

In an effort to influence the state’s revised Comprehensive Energy Plan, the Vermont Public Interest Research Group presented state officials with 7,500 comment cards calling for 80 percent renewable electricity and heating fuel by 2030.

The VPIRG activists collected the comment cards in a door-to-door campaign across the state. The activists delivered the cards to Elizabeth Miller, the commissioner of the Department of Public Service, in a publicized meeting at her office.

Gov. Peter Shumlin has made the expansion of access to renewable energy a major priority of his administration. To that end, Miller has been charged with creating an energy plan likely to include a combination of wind, solar, hydro or biomass projects in the state of Vermont.

The primary purpose of the plan, as per the Vermont Energy Plan website, is to examine the state’s energy challenges and current energy sources.

VPIRG’s 7,500 fill-in-the-blank postcards were delivered a day before the July 15 public comment deadline. Miller said the Department of Public Service had received many comments prior to the deadline, and that most had “focused on in-state energy solutions, long-term energy security, along with the need to have an affordable [energy] portfolio.”

The cards all bore the same statements – written by VPIRG – with different signatures from residents throughout the state. Miller commended VPIRG, saying they do a “fantastic job of outreach and grassroots communication,” and said the comments would be considered as the administration drafts its energy plan.

Miller said an 80 percent renewable electricity portfolio appears to be attainable. She said 48 percent of electricity used in Vermont comes from renewable resources; 63 percent of that total comes from Hydro-Quebec, the rest comes from the state’s small solar and wind efforts, as well as biomass.

“We’re on a really good path that we just have to keep vigilant and keep moving on,” said Miller. Meeting ambitious renewable targets for transportation and heating energy will be more of a challenge, Miller said. Vermont has a long way to go to meet VPIRG’s goal of 80 percent by 2030.

“When you look at total energy usage statewide, heating is only about 5 percent renewable right now,” Miller said.

Though Shumlin has said he wants to increase the amount of renewable power in the state, his administration will not officially set a target until a draft of his comprehensive energy plan is released to the public in mid-August. The deadline for the final plan is Oct. 1. The Douglas administration prepared a draft “Comprehensive Energy Plan” in 2009, but it was never formally adopted. Shumlin says he is “revitalizing” the Douglas plan.

James Moore, clean energy program director for VPIRG, said the state needs to improve its energy standards to meet growing demand for renewable energy.

Dylan Zwicky, a VPIRG team leader, spent the early summer talking with Vermonters about future sources for electricity and fuels for transportation and heat. “Generally, all across the state, people want to see more renewable energy,” Zwicky said.

Many people have been turning to alternatives modes of travel such as public transit, carpools and bicycling, Zwicky said. Most of the Vermonters he interviewed, however, were less concerned about vehicular transportation.

Miller stressed that transportation will be an important part of the state’s energy plan. She said transportation costs are about 30 percent of Vermonters’ energy expenditures. Public transit, carpooling, more efficient vehicles, and even electric cars can be a part of the solution, she said.

“When you look at bringing transportation costs down, you have to look at several ways to do it,” Miller said.

VTDigger

Contact:
Elizabeth H. Miller
Commissioner
802-828-2321
Elizabeth.Miller@state.vt.us

MONTPELIER, VT – The Vermont Department of Public Service (DPS) has named John Beling as its new Director of Public Advocacy and Consumer Affairs. Mr. Beling, who has served as Special Counsel for DPS during the past year, will head the Department’s staff of attorneys who represent ratepayers in all public service company proceedings before the Public Service Board and in all other venues where those interests are at stake, such as the Federal Energy Regulatory Commission (FERC), the Federal Communication Commission (FCC), and the Nuclear Regulatory Commission (NRC). Mr. Beling will advise the Commissioner and DPS regarding the public interest and will help guide the long-term interest of all Vermonters in reliable, environmentally sustainable, and economically sound provision of utility services.  He will also oversee the Department’s Consumer Affairs division which reviews and investigates consumer complaints regarding regulated utility services.

“John has done excellent work for the Department this past year,” said Commissioner Elizabeth Miller, “and has deep experience in environmental litigation. He is the right person for this position. The Department of Public Service is delighted to welcome him as Director.”

Before joining DPS, Mr. Beling worked at the Vermont Attorney General’s office on environmental matters and served as enforcement counsel with the United States Environmental Protection Agency in Boston.  Mr. Beling started his career in the Torts Branch of the United States Department of Justice as a trial attorney focusing on asbestos and environmental tort litigation.  Mr. Beling has a BA, cum laude, in English and History from Tufts University and a JD from St. John’s University School of Law.

When not at work, John serves as a lecturer for the Dartmouth Institute for Health Policy and Clinical Practice. He also serves as a mock trial judge for Vermont Law School and enjoys coaching youth sports and instructing adaptive skiing.

“I look forward to helping to craft the policies that will balance the needs of progress and the needs of the consumer to enhance the superb quality of life that we enjoy here in Vermont,” commented Beling.

The Department of Public Service is an agency within the executive branch of Vermont state government. Its charge is to represent the public interest in matters regarding energy, telecommunications, water and wastewater.

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Rep. Tony Klein. VTD/Josh Larkin

Rep. Tony Klein, D-East Montpelier, chair of the House Energy and Natural Resources Committee, requested the study in April, according to a memo obtained from the department.

Read the memo. Rep. Tony Klein’s request; DPS response

The state has 20 utilities ranging in size from Central Vermont Public Service, the state’s largest power provider, to Vermont Electric Co-operative, which serves 10 percent of ratepayers, to 15 village and town power departments sprinkled across the state. The municipal electric entities were formed by the Rural Electrification Administration in the 1940s and 1950s.

In the letter sent, dated April 26, Klein asked the DPS to examine whether consolidating all 20 providers into one, two or three entities would save ratepayers money.

Vermont’s small utility world has been turned upside down since then. The Department of Public Service is moving ahead with Klein’s request in the aftermath of one of the biggest power deals in the state’s history.

Gaz Metro, the Montreal-based utility that owns Green Mountain Power, Vermont’s second largest utility has made a hostile takeover bid for Central Vermont Public Service, which serves 165,000 Vermonters. If the directors of CVPS accept the offer, Gaz Metro would consolidate Vermont’s two biggest utility companies into one entity that would provide electricity to 70 percent of Vermont ratepayers.

Green Mountain Power says the consolidation of the two companies will create efficiencies, eliminate managerial and operational redundancies and save ratepayers money. Job savings would come through natural attrition in the workforce and some reductions in force among top managers, according to Robert Dostis, a vice president for Green Mountain Power.

Klein is not an enthusiastic supporter of the merger. “This is the most radical change to our utilities over the last 60, even 100 years,” Klein said in an interview.

“The combining of these two utilities could be good or bad and a lot of questions and information need to come up to the surface,” Klein said.

If Fortis ends up winning out over Green Mountain Power, Klein expects CVPS to continue operating as it does now, but if GMP succeeds then the price of power can be expected to drop. Employees and ratepayers at other municipalities will be running to the general managers asking them to sell if power prices under GMP are much lower, Klein speculates.

“If Fortis wins this battle things will stay the same, if GMP wins this battle I think consolidation is inevitable,” Klein said.

In his April memo, Klein asked the department to look into “the cost of DPS and Public Service Board (PSB) regulations, such as staff, counsel, and expert witness or advisor retention; costs of electric utilities themselves, such as duplicative and administrative resources within the utilities, participation in regulatory proceedings and retention of outside assistance; and an estimate of savings to ratepayers, if any, that would accrue by reducing the number of utilities.”

Those savings, Klein said, would also likely come through job vacancies. There would be one general manager for a group of consolidated municipal utilities, for example, instead of 15 separate managerial salaries.

Dave Mullett from the Vermont Public Power Supply Authority sees it differently.

“I’d be frankly surprised if it (consolidating) saves money,” Mullett said. In his view, locally run municipalities have many benefits and they offer certain efficiencies in services.

The Department of Public Service’s Commissioner Liz Miller says it is too early to speculate on whether consolidating will save any money.

In a letter to Klein on Wednesday from Sarah Hofmann, deputy commissioner of DPS, Hofmann wrote that the department had begun mapping out a methodology and time line for the study.

“It will involve a great deal of work, reviewing and analyzing information both already in the hands at the Department and that which we will obtain through requests to the utilities,” Hofmann wrote.

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Gov. Peter Shumlin and Commissioner Liz Miller announce the creation of an oversight panel to watch over the management of Vermont Yankee. Photo by Josh Larkin

In the wake of new tests that show elevated levels of tritium, a radioactive isotope of hydrogen, in two monitoring wells at Vermont Yankee, Gov. Peter Shumlin announced on Tuesday that the state will create an oversight panel to keep tabs on Entergy Corporation’s management of the plant.

The affected wells are 150 to 200 feet north of the tritium plume that was first identified a year ago.

Entergy notified the Shumlin administration about the new tritium discoveries two weeks ago. The results were from tests conducted in December. The corporation’s radioactive sensing equipment broke down in the interim. The governor noted that Entergy didn’t mention the problem when officials gave testimony before the Public Service Board recently.

“We have a responsibility to all Vermonters that we operate a nuclear power plant that is not leaking tritium or other radioactive substances into the ground,” Shumlin said.  “This is the second January in a row that we’ve been stuck with this challenge. I intend as governor to work together with the commissioner to ensure we get straight talk and transparency; have a plan to get to the bottom of it; have a more active relationship with Entergy to ensure we’re getting accurate information in a timely fashion.”

On Friday, Dr. Harry Chen, the commissioner of the Department of Health sent a letter to Entergy, insisting that the company send the state split samples of water from monitoring wells. DOH is missing “hundreds” of samples, some of which date back to September.

“Obviously, I am concerned, No. 1 that this aging plant continues to show signs of a lack of reliability by yet another leak or a plume that is moving in directions north,” Shumlin said. “No. 2 by a lack of transparency by Entergy Louisiana in communicating to Vermont the challenges we’re facing in terms of the aging plant and reliability that should be a concern to all Vermonters. They’re certainly a concern to me.”

Shumlin outlined a three-point plan for the Department of Public Service to address the tritium problem at Vermont Yankee.

1. The governor has charged Liz Miller, the commissioner of the Department of Public Service, with appointing nuclear experts to a Reliability Oversight Committee. The panel will advise the department about Vermont Yankee reliability and “other issues that come up” as the state moves toward closing the plant in 2012.
2. The state will expect daily updates on tritium levels in monitoring wells from Entergy to the Department of Public Service and the Department of Health, Shumlin said. The Nuclear Regulatory Commission has called for a similar testing regimen.
3. Shumlin has demanded that Entergy give the Department an emergency plan within 24 hours that explains how “they’re going to get to the bottom of this will be formulating a plan to get to the bottom of this latest leak.”

Shumlin said these steps are necessary because “Entergy Louisiana does not do business the way Vermonters do business.”

“That’s been my experience,” Shumlin said. “I have not seen any behavior that suggests that they’ve decided to do business differently.”

Shumlin appointed Peter Bradford and Richard Saudek to the Texas Low-Level Nuclear Waste Compact Commission. Bradford, an adjunct professor at Vermont Law School, and Saudek, Vermont’s first commissioner of the Department of Public Service, will replace Uldis Vanags, the state’s nuclear engineer, and Stephen Wark, the communications director for the department.

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