The Vermont Public Utility Commission approved a roughly 2.7% rate increase by the state’s largest electric utility to go into effect this fall.
Green Mountain Power will calculate the precise rate after the regulatory board approved the company’s proposed increase of 2.92% Thursday, subject to making certain modifications recommended by the Department of Public Service.
The rate hike will take effect in October, as many Vermonters will also see their energy bills go up because of other factors.
GMP customers will feel a bump this fall from a 5.43% rate hike approved last year — that hike went into effect but customers didn’t see the full increase on their bills because of a one-time windfall the utility gained from federal tax cuts that it returned to customers. There will also be line items on bills for tree trimming related to the emerald ash borer infestation and major storm recovery costs.
“While these changes are not under review in this proceeding, the Commission recognizes that the actual increase in energy bills experienced by ratepayers on October 1, 2019, will be greater than 2.92%,” the order from the PUC stated.
The majority of the utility’s costs are fixed for a three-year period based on a multi-year plan approved by the PUC earlier this year. The increase this fall is the first of three similar ones the utility will seek annually under the agreement.
“The primary purpose of this proceeding is to review GMP’s three-year forecast of the costs, such as power supply costs, not fixed in the plan,” states the commission.
The department recommended in August that the commission lower GMP’s rate increase to 2.67%.
In Thursday’s order, regulators asked GMP to file a revised rate in the next two weeks based on slight adjustments, suggested by the department, to power supply costs, property tax assumptions, and return on equity.
The utility anticipates the rate increase for next year will be close to 2.7%, according to GMP spokesperson Kristin Kelly.
Kelly said the utility is taking on “significant financial risk” by locking in most of its spending for the next three years.
“The idea here is that we’re providing that slow, steady rate path for customers, which gives them that predictability,” she said.
Kelly added that GMP’s rates have “tracked below inflation” for the past 20 years, despite cost pressures from the New England power grid.
“That’s why we’re so focused on our innovative programs, like battery storage, because what that does is it helps to lower those grid costs for all the customers we serve,” she said.
Riley Allen, deputy commissioner of the Department of Public Service, said the department “feels the commission essentially sided with us on the issues that we raised, so we’re very pleased with the decision.”
He added that the PUC had not fully agreed with DPS on its recommendations to lower GMP’s predictions for property tax increases.
Earlier this month, the state Agency of Commerce and Community Development filed a public comment in the case saying that businesses are concerned that the cumulative impact of rate increases and other line items over the next three years will lead to a more than 16% rise in electricity costs.
