As state regulators deliberate over the proposed merger of our state’s two largest electric utilities, they hear from a host of experts, consultants, lawyers and corporations. Unfortunately, the ratepayers are rarely have a voice and certainly don’t have a seat at the table. That’s precisely why AARP Vermont launched an effort to help secure ratepayer refunds owed to CVPS customers as triggered by the pending merger with GMP.
The Vermont Public Service Board made very clear in 2001 that the ratepayers who bailed out CVPS with an emergency rate increase had to be repaid. This windfall sharing provision that AARP fought for 11 years ago in front of the Public Service Board, is clearly triggered by the merger. The regulators ordered that should the company ever be sold or merged, it needed to pay back ratepayers – before executives or shareholders profited from the sale. The bailout actually amounted to $98 million, but the Board capped it at $21 million.
Mergers and acquisitions can be complex transactions with lots of complicated elements. This is not one of them however. This is a simple matter of making good on a debt. A matter of fairness.
Instead of refunding the money back to the Vermonters who paid it, the utilities have now proposed creating an efficiency and weatherization program, which satisfies neither the debt, nor the regulator’s ruling. Unfortunatley, our Governor Shumlin seems to agree with the utilities. GMP actually proposes to set up an efficiency loan fund through a third party that some ratepayers could borrow from to weatherize or make efficiency improvements. Then they would pay the utility back through their bills. Where’s the refund in that? Furthermore, they propose to recover that “investment” through rates going forward!
This efficiency idea doesn’t wash on so many levels.
First, it relies on additional ratepayer funds to establish the program and is not an investment of the funds owed. Second, it’s a loan program, not a refund. As such it would only benefit those who want to borrow the funds to do a project and does nothing for everyone else – CVPS has 135,000 residential customers. Third, efficiency is great and Vermont is a national leader in investing in a host of energy efficiency programs already – which ratepayers pay for each month. Do we really need another…at the expense of ratepayers? Fourth, other states with utility mergers in the works (Massachusetts and Maryland) have offered similar efficiency programs on top of rebates and refunds to ratepayers. And those are states with no windfall protection provision in place. And finally, it’s not the state’s nor the utilities’ money to invest, redirect, absorb or apply to “merger savings”.
The reasons go on, but suffice it to say that this idea is a non-starter from the perspective of ratepayers who reached into their pockets 11 years ago to bail out their electric company and could really use their money back. Now the legislature is on the case as a host of Senators and Representatives have realized how wrong it is to not pay back customers and then charge them through rates for another efficiency program. A bill is currently circulating in the Statehouse and hearings were conducted aimed at requiring the Vermont Public Service Board to require the refund before approving the merger.
What it comes down to is this: Should utilities, the state or anyone else be telling these customers how to spend their money? Is there a reason they won’t just pay it back? AARP does not oppose this merger, nor are we against energy efficiency in any way. We are, however, in favor of protecting consumers and our members.
AARP is calling on members and CV ratepayers to speak up and be heard. Call the Governor’s hotline and request that he support a direct payback through a check or refund. Shouldn’t our Governor be siding with Vermonters and not a Canadian power company? The number to call is 877-503-9724.