Prominent members of the Vermont business community expressed support for a proposed merger of the state’s two largest utilities — Green Mountain Power and Central Vermont Public Service – at a sparsely attended public hearing on Tuesday night.
Representatives from Porter Medical Center, the Rutland Economic Development Corp., and Green Mountain Coffee Roasters spoke in favor of the transaction at the hearing, which was simulcast by Vermont Interactive Television to a handful of locations around the state.
Betsy Bishop, president of the Vermont Chamber of Commerce, said the merger would “reduce the cost of business” and “eliminate redundancies.” The chamber supports a plan to create one new utility for 72 percent of Vermont ratepayers, she said.
The public hearing was part of the Vermont Public Service Board’s proceedings to consider approving the merger.
On Sept. 2, the companies filed a joint petition for permission to merge. Montreal-based Gaz Metro owns Green Mountain Power and would be the parent company for the new entity.
The petition promises a return of $144 million in savings to customers over 10 years. Gaz Metro would transfer 33 percent of voting shares in the Vermont Electric Power Co., the state’s transmission utility, to a public-benefit entity called Vermont Low Income Trust for Electricity. The proceeds from any profits derived from the VELCO shares that are transferred to VLITE would be used to subsidize low-income ratepayers. Once CVPS and Green Mountain Power are merged, Gaz Metro would own 72 percent of VELCO. The transfer of ownership to VLITE would diminish the new company’s combined voting share to less than 50 percent.
About a dozen people made comments at the televised hearing, and with the exception of two remarks, most conveyed the same message: The merger and Gaz Metro ownership of the state’s two largest utilities is good for business.
James Stewart, executive director of the Rutland Economic Development Corp., said his organization’s biggest concern is access to a stable supply of affordable power going forward.
“To the extent that, as proposed, we will see jobs and a stable and affordable supply of electricity, we are supporting it,” Stewart said.
Part of the proposed merger includes establishing a “Headquarters for Operations and Energy Innovation” in Rutland along with a “Solar City” program in Rutland to deploy solar technology in the area.
Jim Daily, president of Porter Medical Center in Middlebury, also leant his support to the merger. Daily said the greatest threat to Vermont’s economy is health care, and lower electricity rates could help reduce overhead costs for hospitals across the state.
“We are in favor of the merger to create a stronger company and to realize the advantages of economies of scale,” Daily said.
Paul Comey, vice president of environmental affairs for Green Mountain Coffee Roasters, praised GMP’s “excellent environmental track record.”
Not everyone at the hearing was enthused about the merger and the way in which the deal has been handled by the state.
Susan Shashok, a member of the Middlebury Select Board, said she is concerned about perceived conflict-of-interest issues involving Liz Miller, commissioner of the Department of Public Service. The department represents ratepayers before the Public Service Board, and Sen. Vince Illuzzi, R/D-Essex-Orleans, has petitioned the board to appoint independent counsel to represent ratepayers in the proceeding because Miller’s husband is a managing partner at the law firm that represents Green Mountain Power.
An outspoken opponent of Green Mountain Power’s Kingdom Community Wind project in Lowell, Dennis Liddy, advocated against the merger because a Canadian company would dominate the regulated (and captive) electricity market in Vermont.
Barry Bernstein, president of the board of the Washington Electric Cooperative, said he was at the hearing to represent himself, not the co-op, which has also filed a motion to intervene. Bernstein said he was concerned with the large percentage ownership of VELCO by a Canadian utility.
“This is the most significant event in utility history (in Vermont),” Bernstein said. “The impact of what happens here will affect what happens 10 or 20 years down the road.”
Bernstein is a proponent of public ownership of VELCO. He said he was less worried about the “personalities of today” running Green Mountain Power and CVPS, and more concerned with what could happen in the future with such a concentration of power in one entity.
Robert Dostis, a spokesman for Green Mountain Power, said one of the primary worries mentioned at the hearing — that utilities in Vermont will become one monopoly — is unfounded.
“All utilities in Vermont are already monopolies,” Dostis said. Local municipal utilities and larger companies are granted market monopolies over certain geographic areas in exchange for strict regulation by the Department of Public Service and the Public Service Board.
Dostis said the merger will save ratepayers money as the two companies take advantage of economies of scale and eliminate the duplication of effort that comes with having two companies essentially doing the same thing.
Tuesday was the only public hearing for the Public Service Board’s docket. The board will hold technical hearings in February 2012, and briefs are due in March.
