Rutland Mayor Chris Louras said he and other members of the council of aldermen are concerned about potential job losses as a result of Gaz Metro’s proposal to merge Green Mountain Power with Central Vermont Public Service, Vermont’s two largest utilities.
Montreal-based Gaz Metro, which has owned Green Mountain Power since 2007 and Vermont Gas Systems since 1986, is attempting to trump a recent offer made by Fortis, Inc., to purchase Rutland-based Central Vermont Public Service.
Under the Gaz Metro plan, ratepayers would see savings of $144 million over 10 years in operating costs, according to Mary Powell, chief executive officer of Green Mountain Power. The cost reductions would come from the elimination of operational redundancies and labor savings achieved through attrition and consolidation of upper management positions.
Powell told reporters at a recent press conference that Green Mountain Power would build a new regional headquarters in Rutland. The offer also includes the transformation of the state’s largest municipality outside Chittenden County into Vermont’s first solar city.
Louras and state Sen. Kevin Mullin, R-Rutland, are worried that the merger will result in job losses and vacant facilities in the city of Rutland.
CVPS employs about 500 people, and it owns three large buildings in Rutland, an engineering facility, an operations center and a management headquarters.
A number of CVPS employees earn between $60,000 and $90,000 per year, according to Louras, and he says it’s unclear whether Green Mountain Power would classify these workers as part of upper management.
“We can’t afford to lose any of those jobs in Rutland,” Louras said. “They’ve said no layoffs, but they can’t guarantee no relocations at this point. If those employees move to Colchester (GMP’s home base) that’s the same impact as a layoff. Unlike Chittenden County, in Rutland County, we can’t absorb the loss of 50, 20 or even 10, middle- to upper-income jobs.”
Highly paid workers for CVPS have the disposable income to spend money on purchases and restaurant outings, he said.
The best way to mitigate job losses over the next 10 years, Louras says, is for Green Mountain Power to make cuts to upper management at its headquarters in Colchester.
Under the merger plan, Green Mountain Power would close the existing headquarters and build a new facility downtown. The CVPS management headquarters on Grove Street is assessed at $2.3 million, according to Louras.
Robert Dostis, head of external affairs for Green Mountain Power, said no decision has been made about which senior executive officials would leave. “That would be a result of conversations between GMP and CVPS — we’ll work with them on all decisions pertaining to staffing,” Dostis said. “We’re only talking about the senior management team. We don’t need two CEOs.”
Over the next five to 10 years, 40 percent of Green Mountain Power’s 205 employees are retiring. “That’s the opportunity that presents itself,” Dostis said. “If CVPS can do some of the work that’s where we find some of the savings.”
When asked how many senior executive positions would be eliminated, Dostis said he didn’t know the number.
Dostis said Green Mountain Power has made a commitment to having a “presence in the downtown area.” Company employees from Colchester and members of the CVPS staff in the current Rutland facility would move to the new location in the heart of downtown. As for the operations and engineering departments, Dostis said, “that level of detail will come after a decision is made and then we work with CVPS.”
Sen. Kevin Mullin, R-Rutland, said this isn’t the first time a major company has pulled its executive team out of Rutland. OMYA, the marble manufacturing company, moved its top executives to Cincinnati a few years ago. Those job losses had a ripple effect across the county, Mullin said.
The state senator says the Green Mountain Power’s annual $14.4 million in projected savings does not include the diversion of $1 million of its revenue stream from VELCO into a program to provide reduced electricity rates for elderly and poor Vermonters.
“You have to subtract whatever revenue stream is from VELCO,” Mullin said. “It’s a bigger figure than $144 million in job loss. The real question is just how many jobs will be lost. They’re not up front with the information they’re telling me. I’ll see that information the same time the Public Service Board does – they’re not going to release it until they have a deal with CVPS. I need that information (now).”
Mullin expects the new regional headquarters Green Mountain Power builds will be smaller than the Grove Street facility. “That location will be sitting vacant for a long time,” Mullin said.
Mullin penned a screed about the deal last week that was sent to lawmakers and local leaders in which he exhorted his fellow Rutland residents “not to be fooled into thinking this is better for the Rutland Region. It isn’t. First question we must all ask ourselves is should we allow a foreign corporation to control our power supply. WE SHOULDN’T. Both proposals fail that basic test.” (Editor’s note: The full text is at the end of this post.)
He then goes on to accuse Gov. Peter Shumlin of “jumping on board with GMP.”
“My cynical side tells me that one merely has to look at who was in charge of the inaugural ball to figure out who has his ear,” Mullin wrote, in a reference to Mary Powell, who chaired the governor’s inaugural ball committee.
“The reality is I am worried about his close ties with Mary Powell,” Mullin said in an interview. “My job isn’t to help people in Chittenden get lower electricity rates, it’s to help people in Rutland.”
Dostis said the Green Mountain Power deal will help Rutland’s economy. “Five years from now we’re going to be talking about the additional jobs we’ve created,” Dostis said. “We’re trying to create green jobs through the solar city initiative. I can see businesses attracted to Rutland because of what’s accomplished by the solar city and being a greater presence downtown. We’ll see a lot more activity. We want to partner with Rutland to make that happen. It’s an incredible opportunity with CVPS and GMP as one entity.”
One of those opportunities, Dostis said, is lower electricity rates. “Clearly for our business to stay competitive, the cost of energy is important and to the extent we can keep costs down allows businesses to be competitive, to grow, to hire and to support the economic vitality of the region of Rutland and the state.
Louras is skeptical about that tradeoff. “I don’t believe the increase in utility rates at lower levels than otherwise would be offered will encourage job growth in other sectors enough to offset the job losses,” Louras said. “That’s not proved to be the case in the past. There will not be the job gains to offset the job losses.”
The Rutland mayor said he will continue to discuss his concerns with Green Mountain Power, the Shumlin administration and state utility regulators. “We expect to be fully engaged with the Public Service Board,” Louras said.
Mullin is contacting shareholders, in an attempt to dissuade them from approving the deal.
Memo from Kevin Mullin to “Legislators and local leaders”
Don’t be fooled into thinking this is better for the Rutland Region. It isn’t. First question we must all ask ourselves is should we allow a foreign corporation to control our power supply. WE SHOULDN’T. Both proposals fail that basic test. If we get past the first hurdle, we have to ask ourselves about how it will affect the Rutland economy. If we merely look at what happened with the higher paying jobs at OMYA we will see what will happen with those CVPS positions. In this regard the Fortis deal is better because they are at least allowing autonomy. GMP talks about savings to ratepayers. These can only occur if there is significant consolidation and reduction in force. Rutland will lose big time under GMP.
Don’t be fooled by the governor jumping on board with GMP. My cynical side tells me that one merely has to look at who was in charge of the inaugural ball to figure out who has his ear. I hope I’m wrong. I tried to reach him but the cell phone number that I could always reach him at has been discontinued so that guys like me can’t bother him on the weekend and off hours. Let’s get all the facts before we back either proposal but at this point I believe the CVPS board made the best possible decision with Fortis given their responsibility to their shareholders, many of whom have strong ties to the Rutland region.
Our responsibility, however, is to protect the economic vitality of this region. A building in downtown is great but not if it and the building in Rutland Town are closed in the next decade. It breaks my heart to see one strong Rutland region based business after another slowly lose their local presence. We can ask the tough questions and we must. Our very future is at stake. In the meantime don’t let Chittenden county and their strong ties to the governor continue to suck out our lifeblood.
Respectfully yours,
Kevin
