The Vermont House decided Friday that now is not the time to intervene in an open Public Service Board proceeding involving the merger of the state’s two largest utilities.
On an 87-54 vote, legislation that would have directed the board to ensure $21 million in cash went to ratepayers died on the floor Friday afternoon.
Eighteen lawmakers who initially signed on to the amendment changed their stance.
Instead, the House voted 99-43 to pass a resolution to issue a letter to the utilities and Department of Public Service asking that the General Assembly’s concerns about the merger be considered.
A compromise amendment from Rep. Oliver Olsen also passed, on a voice vote. His proposal would block utilities from recovering rates for weatherization or investments that don’t benefit the electric system. Olsen’s amendment would not intervene in the current docket per se, but would affect a subsequent ratemaking process involving the utilities.
The House tossed around multiple proposals to decide how to deal with the ever-pressing issue of a windfall that Central Vermont Public Service Corp. is required to share with ratepayers when it merges with Green Mountain Power.
The Legislature debated for hours this week the merits of telling the Public Service Board that CVPS must give ratepayers a check or refund for $21 million or not approve the deal.
The Vermont Department of Public Service, which represents ratepayers before the board, struck a compromise with the utilities that would involve investing that $21 million in efficiency measures, with $12 million going to weatherization programs. The utilities would be able to recoup that money in rates. They say $25 million in benefits will flow through to ratepayers through less electricity usage.
The issue pitted lawmakers against each other based on principle. Some say the Legislature should let the Public Service Board do its job. Others say it is a matter of economic inequity with utility executives reaping huge benefits while refusing to pay back ratepayers for a bailout in the early 2000s when the utilities raised rates as a result of bad contracts with Hydro-Quebec.
The Senate voted Thursday to approve legislation that would require the Public Service Board to direct money used to prevent the bankruptcy or financial instability of a utility, like a bailout, to be returned to ratepayers in a credit or refund. Under the Senate bill, utilities couldn’t recoup the money in rates.
Gov. Peter Shumlin issued a harsh statement Thursday rebuking the Senate. He says the Legislature shouldn’t meddle in the board’s affairs.
The House and Senate will have to deal with the issue again in a conference committee on this year’s budget bill. In a last-ditch effort, Rep. Paul Poirier asked lawmakers to direct their members to agree with the Senate’s version. That push failed on a 105-24 vote.
The House has been less supportive of legislative intervention than the Senate. Numerous proposals emerged in the last two days to take a more hands-off approach.
The Vermont Public Service Board, which will ultimately make the decision on what happens with the windfall money, was conspicuously absent from the list of that letter’s recipients.
Proponents of a law that would direct a $21 million cash payout have grumbled throughout the session about procedural moves to stifle their efforts. Some say the resolution was designed to draw away supporters of the amendment offered by Cynthia Browning.
Rep. Chris Pearson, one of four lawmakers who consistently pushed for the amendment, said the resolution was a maneuver to undermine the efforts by him and others.
“We all recognize as I think we probably ought to that this resolution is meant to deflate the substantive debate we’ve been having,” Pearson said. “I find it very discouraging to have this resolution voted on before any debate. It’s designed to deflate an argument that’s made people uncomfortable. But uncomfortable positions are part of this job. I just wish we could have had this absent the effect of having a feel-good resolution.”
But Margaret Cheney, vice chair of the House Committee on Natural Resources and Energy, said the resolution still sent a strong message.
“Some will say this resolution does nothing,” she said. “It does not tell the Public Service Board what to do. It does not intervene in an open docket. It does not interfere with the regulatory process. But a legislative resolution, by its very nature speaks in a loud and powerful voice.”
Whether it was due to the feel-good resolution or not, one-by-one numerous lawmakers stood up to say they were shifting their support against the amendment after having their names on it.
On the House floor, the debate centered on two issues: legislative intervention and economic fairness.
Michael Marcotte, vice chair of the House Committee on Commerce and Economic Development, heard weeks of testimony in committee on the issue.
He said he was sympathetic to the argument that people should get their money back.
“People made an investment. They were forced to make it,” he said. “They should get money back when the trigger was pulled. But I don’t feel that’s our decision.”
Rep. Tony Klein, chair of the House Committee on Natural Resources and Energy, has in the last week been outspoken about his vehement opposition to intervening in an open docket. His committee supported Olsen’s amendment. He said it was a compromise.
“The Browning amendment has become a political football,” he said in committee Friday morning. “It’s politics. This gives folks something to vote for rather than just voting against something.”
Rep. Tom Koch, said he voted to inject the Legislature into a pending case with reservations. But he said the current deal presented some exceptional circumstances warranting that effort.
“As far as I’m concerned, this memorandum of understanding embodies a deal that breaks a deal and this new deal stinks,” he said. “Now lawyers can take a pig out of the sky and pretty it up so it’s ready for the county fair, but I don’t think you can work that kind of magic on this deal.”
While the Browning amendment failed, the House expressed support for an amendment to that amendment that would prohibit utilities from clawing back in rates money invested in efficiency. Since Browning’s underlying amendment died, so too did that proposal.
Another amendment by Rep. Chris Pearson that would require a state report looking into the possibility of public ownership of the electric transmission system failed 41-95 also.
An amendment by Rep. Paul Ralston to create a working group under the attorney general that would study an alternate consumer advocacy model for the Public Service Board passed 106-33.
Late Friday afternoon, Browning introduced yet another change that would require legislative approval of any merger resulting in control of 50 percent or more of the state’s utility market.
That one died on a voice vote late in the afternoon.
