[V]ermont manufacturers are calling for a probe into electricity rate hikes that will go into effect in October.
The state Agency of Commerce and Community Development filed a letter Wednesday with the Vermont Public Utility Commission on behalf of “key employers” who want an “investigation” into Green Mountain Power’s capital projects.
“The business community has questioned why — as they make great strides toward efficiency and reduced usage — they still face continuing growing energy costs from the utility’s ever-increasing rates,” states the letter.
GMP will seek 2.92% annual increases over the next three years under a multi-year regulation plan approved by the Vermont Public Utility Commission in May. The utility filed for the first of those increases in June.
But the ACCD says that the cumulative impact will be closer to a 16% to 20% increase over the next three years. In the PUC filing, the commerce agency said the range is “due to the lack of transparency in the notice.”
GMP disputes claims made by businesses and the commerce agency.
In addition to the 2.92% rate increase Vermonters will see starting this October, customers will also feel a 5.42% rate hike approved last year — that was initially offset by a one-time windfall the utility gained from federal tax cuts that was returned to customers.
GMP bills will also include a new line item for emerald ash borer tree clearing and recovery of $24 million in above-average storm costs projected over the next three years.
“Considered by itself, a 2.9% rate increase over three years may not appear to be a heavy burden,” commerce agency officials wrote. “Considered more completely — therefore more accurately — the increase would compound the longer-term price disadvantages endured by Vermont employers.”
The commerce agency held a conference call with large manufacturers and other businesses in July, who want the PUC to stop rate increases until there’s an “investigation” into GMP’s capital projects.
They pointed to a “nagging concern” about future electricity prices with fixed infrastructure costs spread over a period of flattened load and increased renewable production.
Joan Goldstein, commissioner of the Vermont Department of Economic Development, did not immediately respond to a request for comment Friday afternoon.
In June, the Public Utility Commission told GMP the company needed to be clearer with customers about the cumulative impact of the annual rate increase, the expiring tax credit and the other line items. The utility revised its customer notice to explain the other line items and last year’s rate increase.
GMP has not yet filed a formal response to the commerce agency’s letter.
“Our team is taking a hard look at the letter, but the early review of it shows a lot of factual inaccuracies,” said Kristin Kelly, communications director for GMP.
She stressed that the 2.92% annual rate increase currently before the PUC was filed as required by the already approved regulation plan that “provides a smooth, low, predictable rate path for customers,” she said.
Some of the main cost pressures facing the utility are transmission and power supply costs from the New England grid, as well as more frequent intense storms and declining electricity sales. Under the regulation plan, the utility has to “cap spending” for the next three years, said Kelly.
“This has been a thorough, detailed, more than a yearlong process involving public hearings, hundreds of pages of testimony, and state-hired experts to look at all of this,” Kelly said of the PUC’s review of the rate plan. “Everything GMP does and is doing has been thoroughly examined and was part of the (regulation plan) that was approved by regulators in May.”
The Department of Public Service, which acts as the public advocate, said in a filing that the PUC should lower GMP’s rate request from 2.92% to 2.43%. The department says that many of the costs in GMP’s rate filing have already been fixed by the regulation plan.
Vermont has lower average electricity costs than the other New England states, according to the U.S. Energy Information Administration. Kelly said GMP’s rates are currently the third lowest in New England, and will remain low compared with nearby states if the rate increase is approved.
GMP is not the only Vermont electric utility whose rates are going up.
Washington Electric Co-op had a 5.49% rate increase this year, driven largely by a decline in the market for renewable energy credits, while Vermont Electric Co-op’s CEO has said the utility will be seeking an increase later this year.
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