The deal for Noverco to buy out Valener was closed on Friday.
The state’s utility regulator on Thursday ruled against a longshot effort by opponents of a $1.2 billion energy deal to block the sale of the sole public company that indirectly owns two Vermont utilities.
But whether the deal will go forward as planned on Friday remains unclear.
Last week, the Public Utility Commission issued an order approving a petition by Canadian investment holding company Noverco to buy out public company Valener. The deal had to go through the PUC because it grants Noverco, through a series of subsidiaries, a 100% stake in both Vermont Gas and Green Mountain Power.
In its decision last week, the PUC agreed with both Noverco and the Department of Public Service that the deal would be in the public interest as it would provide increased access to capital for the companies upstream of the Vermont utilities by simplifying the ownership structure.
The commission had granted 19 GMP and Vermont Gas ratepayers who opposed the deal intervenor status. The intervenors’ attorney, Bristol-based attorney James Dumont, had filed a motion on Tuesday to stay the PUC’s order approving the transaction pending the commission’s consideration of post-trial motions — a move that, if approved, would have prevented Noverco from closing the deal on Friday.
Noverco’s attorneys responded by requesting the PUC decide on the stay by midday Thursday, to allow their client sufficient time to close the deal if the commission denied the intervenor’s request. The PUC convened a last-minute hearing Thursday morning to allow parties to present their arguments.
The intervenors, many of whom fought Vermont Gas’ Addison County pipeline, opposed the deal because one of the primary owners of Noverco is Enbridge, a Canadian multinational that has come under scrutiny from environmental advocates for its massive network of oil and natural gas pipelines. Under the acquisition, Enbridge’s indirect stake in GMP and Vermont Gas will increase from 27.61% to 38.89%. The Quebec pension fund investment manager, Caisse de dépôt et placement du Québec, remains the majority owner of Noverco.
All parties agreed that once the deal closes and the thousands of Valener shareholders are paid out, the transaction would be “irreversible.” Under the transaction agreement, the parties needed to close the deal five days after they had received all approvals — the OK from the PUC was the last remaining regulatory hurdle.
Dumont argued that the commission would be irrevocably harming the intervenors by not granting the stay and allowing the deal to go through on Friday, which they felt would render efforts to appeal the decision moot.
“If the sale goes through tomorrow, then our ability to make that case to the Supreme Court is short-circuited,” said Geoffrey Gardner, a GMP ratepayer who is one of the intervenors, during testimony.
Meanwhile, Owen McClain and Debra Bouffard, attorneys for Noverco with Burlington firm Sheehey, Furlong & Behm, argued that their client would be harmed if the PUC granted the motion to stay because the deal would be jeopardized.
“If we had a stay we would have to undo everything, there’s a long-term reputation issue associated with that,” Renaud Faucher, president of Noverco, said during testimony.
They also argued that Noverco had been complying with the requirements of its transaction agreement in moving to close the deal within five days after receiving PUC approval.
Daniel Burke, an attorney with the Department of Public Service, which acts as a ratepayer advocate in PUC proceedings, said the department also opposes the motion to stay as it could impact Noverco’s credit rating, thus potentially harming the ability of the Vermont utilities to raise capital.
PUC Chair Anthony Roisman told the intervenors that even if the deal went through and the Supreme Court, on appeal, ordered the PUC to reconsider its approval, the commission could still impose conditions to address intervenors’ concerns, like limiting the number of directors Enbridge could appoint to Energir, which would be a parent company of the two utilities. He also said that if the intervenors’ fears came true and Vermont Gas wanted to build a pipeline at the direction of Enbridge, it would need to seek PUC approval for that or any other major projects.
Dumont argued that the PUC has limited authority over matters like the composition of the board of Energir or an intrastate pipeline, which is ultimately approved by the federal government.
After breaking to deliberate, the PUC issued a split oral decision just before 1 p.m. denying the intervenors’ motion to stay their approval order. Commissioners Roisman and Margaret Cheney voted to deny the motion, while Commissioner Sarah Hofmann dissented.
To the visible dismay of Noverco president Faucher and the company’s counsel, Dumont then immediately filed a motion to appeal the PUC’s decision to the Supreme Court. The PUC granted Dumont’s motion.
Roisman also cautioned Noverco that as the PUC was going to take a serious look at the intervenors’ motion to reconsider, their last Friday order was “arguably not a final decision,” which they should take into account when deciding whether to close the deal Friday.
An attorney for Noverco did not immediately respond to a Thursday afternoon email seeking comment on whether the deal would close on Friday.
