The $21 Million CV Controversy: My Perspective

by William Sayre

The Vermont Legislature is a fine institution, with a proud tradition, whose members strive to form, or reform, law, in a way, as they see it, that best serves Vermont and her people.

However, as legislative sessions draw to a close, it is not uncommon for one issue, particularly one that is more complicated than it first appears, to become contentious, not only in and of itself, but as a vessel through which legislators, and the people they represent, can release the frustrations and disappointments they feel on other issues, related or not.

This year is no exception, and the $21 million for CV customers that is part of merger of Central Vermont Public Service (CV) into Green Mountain Power (GMP), appears to be the issue.

As the Legislature debated the fate of the $21 million last week, emotions ran high, tempers flared, and harsh words were said. Some legislators suggested that CV was not keeping a promise, and breaking a deal it had made in 2001. One legislator went so far as to suggest that thievery was involved, with $21 million to be stolen from CV ratepayers.

These accusations, some made by legislators I’ve known and respected for many years, are quite serious. And they demand a serious response, even if, indeed, especially if, they are made by old friends and kindred spirits. I shall attempt to do so here.

There are many questions that could be asked, and have been asked, about CV’s merger with GMP. And I am happy, at another time, to do my best to answer any or all of them. But for now, the one question, at the heart of the legislative controversy last week, and the one that is the greatest source of misunderstanding, and misinformation, is this:

Will CV customers, as a result of the merger, see direct dollar savings of at least $21 million in their electric bills, compared with what their bills would have been, in the absence of the merger?

There is no doubt in my mind, that the answer to this question is yes. Why? Because a very important aspect of the merger agreement, an aspect largely forgotten in the legislative controversy, is that customers of the combined company are assured, over the next 10 years, of $144 million in direct dollar savings in their electric bills. These assured savings come from combining territories, eliminating duplications, and improving efficiencies.

What will this mean for the CV customers, seeking $21 million in savings on their bills? Well, because more than half the customers of the combined company are current customers of CV, they will receive more than half the $144 million in savings. This means that CV customers will indeed save more than $21 million on their bills, perhaps as much as three times over.

I can assure you that customer savings were a matter of great importance to the CV Board as we deliberated on the merger of CV into GMP. Of course, it is the Board’s fiduciary responsibility, under law, to do its best for CV stockholders, many of whom are retired CV employees, and others of whom make Vermont their home.

It also was important to the CV Board to ensure that CV employees could transition as smoothly as possible into the combined company. But of equal importance, the Board wanted to assure that customers of the combined company, about 70 percent of all Vermont homes and businesses, including current CV customers, will save money on their electric bills. All three goals will be accomplished through this merger.

Let me close by adding a thought about the tone of our debate on energy issues. Energy plays an important role in our economy, our environment, and our society. It always has, and always will. It is only natural, therefore, that we will have spirited debates as to what policies are best for producing, distributing and using energy, electricity and otherwise. Competition in the marketplace of ideas will produce the best policy. As we debate competing ideas, however, it serves no useful purpose to impugn the motives or integrity of those who hold different views than our own. It is my hope that we will resolve the challenges before us, in the crucible of compromise, by working together, with respect for all points of view, and the people who hold them. I am optimistic that we will succeed in doing so.

William Sayre is the Chairman of the Board of the Central Vermont Public Service Corporation

9 thoughts on “The $21 Million CV Controversy: My Perspective

  1. I have rarely disagreed with Bill Sayre, but in this instance I must. There exisists a contract of sorts between rate payers and CVPS concerning increased payments to keep the company solvent. So by what authority does the legislature presume to mis-spend it as if it were the tax money they regularly mispend.

  2. WOW! It appears Bill Sayers has no idea how angry the ratepayers are over the question of returning the 21 million dollars to us! You see, being perhaps naive, we thought the money in question would be returned to us in the form of checks, not in boxes of curly lightbulbs, or crates of weatherstripping. When folks enter an agreement they do not expect one of the parties to reinterpert the conditions of repayment somewhere down the road. You say you don’t care for the “tone” of this debate – may I suggest that it has gotten shrill because NO ONE IS LISTENING TO THE PEOPLE!!!

  3. Democrat Tom Salmon “spent” two terms protecting the interests of the private electric utilities. He was paid off for this service: the top job at Green Mountain Power. This governmental-monkey business has now led to rate payer bailouts (loan)of a utility brought on by abysmal legislation, of which shall never see a pay-back let alone any interest on said loan.
    Now we have a GMP-CVPS merger, with yet another democratic governor’s desire to own 51% of a power grid (Velco) who recently had difficulty managing his bird feeders.
    If tracking the electric bill history in the town of Proctor – since the greatest consumer of CV’s power, OMYA, sold out the old Vermont Marble generators to CV – is ANY indicator of the future utility rates in Vermont, prepare for the exodus – businesses, families etc. and the creation of a much greater (larger) government body.
    Then there is the VEEUF. You want to try to understand the twists & turns of how the sausage is made? Have fun at the following:
    We are now at a convuluted point in the future of Vermont where tranparency is talked but not walked. The interwoven players and their fortunes to be made, from the lawyers to their legislators, is shocking. No, it’s an embarrassment.

  4. I give Mr. Sayer some credit for addressing the concern directly, and for the tone of his article and call for civility in the legislature.

    Still, I can certainly understand that the issue of the rebate may feel like it has been addressed by those involved in the merger, but doesn’t seem tangible as a consumer.

    And on another level… doesn’t it seem that this merger eliminates competition? At the same time our legislature seems bent on closing Vermont Yankee. That’s too many eggs in one basket for me. It can’t be good for containing costs in the not-too-distant future.

  5. How will the $144 million in merger savings be measured? Mr. Sayre seems to indicate that rates will be reduced. I’ll bet a dollar to a donut that the savings are rates ‘lower than they would have been absent the merger.’ I’ll also wager my electric bill in 10 years will NOT be lower than it is today.

  6. Why we’re in your pocket, Pete. We posted your comment, didn’t we? That seems to be the criteria for who’s pocket we’re in…. We’re not in the business of silencing those with whom we disagree. Those in favor of a free marketplace should have the confidence to include ideas in that marketplace, and allow competition to determine which ideas are best.

  7. Yeah, right, Sayres…how do you spell theft? You are the problem , too bad your arrogance precludes you from actually realizing it. TNR has just shown in whose pocket they are.

    • After publishing numerous articles highly critical of the whole merger and two recent articles critical of Shumlin and the legislature’s handling of the $21 Million, we publish ONE article from another perspective and we are now somehow in someone’s pocket??? GIVE ME A BREAK!

  8. He fails to mention that most of the savings from the takeover will come, as in most takeovers, by shedding jobs and paying new hires less for the same or more work. He himself will lose his job too but certainly receive a golden parachute.

    GazMet is first in line to take $82 million of the “savings” and use it to finance the takeover, golden parachutes included.

    These “assured” or “guaranteed” savings are only wishful thinking: there is no contractual arrangement and costs are notoriously difficult to estimate even a few years out. That’s why if, after 10 years, the “savings” do not materialize, well the utility will simply go to the PSB and say they are sorry.

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