Shumlin vs. the Vermont Senate: Is there a conflict of interest over the GMP/Gaz Metro merger?

by Robert Maynard

The Burlington Free Press just ran an article entitled “Shumlin blasts Senate for ‘extreme overreach’ in utility merger debate.”  The object of Governor Shumlin’s ire was a Senate compromise to deal with problems related to the GMP/Gaz Metro merger: “After several hours of debate Wednesday night, a boisterous joint caucus Thursday morning and dozens of private huddles, senators settled on compromise language expressing their dissatisfaction with the way rate payers were being treated as part of the merger deal between Central Vermont Public Service and Green Mountain Power Corp.”  The compromise was the result of a bipartisan attempt by the Vermont Senate to ensure that rate payers are paid back when rates are raised to help out a financially strapped utility: “The compromise, which passed with little dissent, declares that it is state policy that when rate payers are asked to pay extra to help a financially strapped utility, they must be paid back via credit or cash refund and the utility can use new rate increases to cover the refund expense”.  The measure enjoyed support across the political spectrum:

Sen. Randy Brock, R-Franklin, was among the compromise supporters and he said the Senate wasn’t out of line in offering policy. “The Legislature provides policy to the board all the time,” Brock said. He added, “This is such an egregious example of the ratepayers not being treated appropriately. “

“This makes the policy clear to the board.” Brock said.

Sen. Tim Ashe, D/P-Chittenden came up with the framework for the compromise, scribbling a proposal on a scrap of paper during the heated caucus Thursday morning.

Despite the widespread support for the measure and the obvious benefit to rate payers, Governor Shumlin was not at all happy with it:

The governor’s criticisms came in a statement issued through social media. It reads:

“The appropriate avenue for legislators to express their views on this proposed merger is through the Public Service Board, which has taken countless hours of testimony and received input from a wide range of stakeholders and experts.

“This matter is now in the hands of the Board. The Senate’s action today interferes with an open PSB docket, undermines the credibility of the regulatory process, and is an extreme overreach of legislative jurisdiction.

“The Senate should be wrapping up its work and adjourning this week. Instead, adjournment has been pushed back at least a week, and Vermont taxpayers are now on the hook for another $275,000 thanks to the Senate’s inability to complete its work on time. The Senate should focus on the real issues under its jurisdiction, like passing the budget that should have passed days ago, and bringing the session to a close.”

It should come as no surprise that the results of the GMP/Gaz Merro merger are now raising concerns.  True North Reports has already ran a three part series on the potential pitfalls associated with the merger.  Part one dealt with concerns over who would end up owning the infrastructure.  It identified the following concerns:

  • Foreign Ownership of so much of the energy infrastructure in Vermont.
  • Consolidation of Ownership by one powerful company.
  • Weak regulatory control of the merger by Vermont, including conflict-of-interest issues.

Part two dealt with the relationship that Governor Shumlin has with Green Mountain Pawer and raised the question of whether there was a conflict of interest existed.  As the article noted:

When Governor Shumlin presented his State of the State speech on January 5, protestors against wind development stood outside the Capital dome. They weren’t just protesting a wind farm, though. They were protesting Shumlin’s overly-close relationship with Green Mountain Power (GMP), the utility that is building the wind development at Lowell Mountain. One sign showed Shumlin in bed with big wind. Another sign claimed that the Shumlin administration is a wholly-owned subsidiary of Green Mountain Power (GMP), the company building the wind farm at Lowell.

Perhaps we should not be surprised that the Governor is less than pleased with the Senate for promoting a measure aimed at dealing with the inequities created by the merger.  Raising such a fuss over a measure with the broad based support that this measure enjoyed does bring up questions again about a possible conflict of interest.

Part three raises the question of whether the consumers are being protected in this merger.  In raising this question the article noted that the agencies responsible for protecting the consumers are not doing there job:

Vermont has two agencies that regulate utilities and protect consumers. Vermont’s Public Service Board (PSB) oversees utility actions and sets rates. The Department of Public Service (DPS) acts as the consumer advocate in cases before the PSB. If these two agencies do their job, Vermont citizens should feel comfortable, no matter who owns the utilities. Unfortunately, PSB and DPS are not doing their job to protect ordinary citizens and ratepayers.

Again, the matter of a possible conflict of interest is raised:

DPS is charged with protecting consumers, and many people have been concerned with Shumlin’s appointment of Liz Miller as Commissioner of the DPS. Ms. Miller’s husband is managing partner of the law firm that represents Green Mountain Power, a conflict of interest situation that puts her actions as Commissioner in doubt.

Senator Vince Illuzzi was particularly concerned that Miller would not be able to do an appropriate job of supervising the merger. A major issue is preventing Green Mountain Power having monopoly control of the transmission companies. Such control by one massive company could hurt all smaller utilities. Illuzzi filed interventions at both the federal and state levels, asking for an independent counsel to supervise the merger. Many small Vermont utilities joined his interventions.

Apparently a majority of members of the Vermont Senate are convinced that the problem rate payer protection is serious enough to warrant action.  Governor Shumlin seems to be miffed that they would have the audacity to raise concerns with a merger he championed.

One thought on “Shumlin vs. the Vermont Senate: Is there a conflict of interest over the GMP/Gaz Metro merger?

  1. Nice job Robert. This whole deal doesn’t feel right; and it seems out of character for Shumlin. Between this deal and a clear intent to shut VT Yankee down, I hope that people will begin to pay attention to what is happening to the energy infrastructure in our state–and who is behind it.

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