Owner of GMP and Vermont Gas will get new CEO

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Owner of GMP and Vermont Gas will get new CEO

Tue, 10/22/2019 - 3:28pm -- tim

by Timothy McQuiston, Vermont Business Magazine Énergir announced Monday that Sophie Brochu has decided to step down on December 30 as President and CEO of the Montreal-based owner of Green Mountain Power and Vermont Gas Systems. The Board of Directors announced Éric Lachance—currently Senior Vice President, Regulatory Affairs, IT, Logistics and Chief Financial Officer—will succeed her. 

Sophie Brochu, Mari McClure and Mary Powell.

This is another significant development for Énergir. GMP CEO Mary Powell also is stepping down at the same time. Mari McClure, who joined GMP in 2010, will succeed her. GMP initiated a 2.72 percent rate hike October 1. And Energir itself has had a restructuring of its ownership, which was contested in Vermont.

GMP spokesperson Kristin Kelly said Powell's transition has been in the works for many months and is unrelated to ownership changes at Energir or to Brochu's stepping down. Kelly added that language in the PUC order strengthens GMP's position as an independent, regulated utility operating in Vermont, as it always has been.

In that complicated ownership restructuring at Énergir, opponents of it in Vermont have said they will condsider an appeal to the state Supreme Court. The Vermont Public Utilities Commission approved the deal in September, saying that it didn't affect Vermont.

Concern was raised in Vermont because the controlling partner of Énergir, LP, is Noverco Inc. Noverco is also a Montreal firm whose own ownership structure includes Enbridge, the Calgary-based oil and gas pipeline company. It's the Enbridge piece that has drawn the ire of opponents. Noverco acquired Valener, also of Montreal with a minority stake in Énergir, in September for C$1.2 billion in an all cash deal. 

According to Valener's 2018 annual report, Énergir revenues in 2018 were C$2,553.7 million. GMP's revenues were US$714 million. Vermont Gas revenues were US$117.1 million (or a total of C$1,067.3 million, up C$97.1 million from 2017). 

The PUC warned Noverco and Valener in September that the case could be appealed and potentially could be reversed. But the Canadian entities went ahead with the sale anyway on September 27, creating an apparent fait accompli. Valener held a 29% interest in Énergir. Noverco owned the rest and now owns all of it. The shareholders have been paid off and Valener is no longer publicly traded.

The PUC commissioners wrote in their final order approving the Valener transaction in part: "We have determined to approve the current Transaction despite Enbridge’s absence from this proceeding. The proposed Transaction will not result in any change to the operations, customer service offerings, or service quality of GMP or Vermont Gas, which will continue to operate as stand-alone companies with Vermont-based management. Nor will the proposed Transaction have a material effect on the business plans, corporate or capital structure, or governance of Vermont Gas or GMP."

GMP is Vermont's largest utility. Vermont Gas is the state's only natural gas pipeline company.

However, PUC commissioners included a summary of opponents objections to the transaction in their final order. Those opponents included several hundred individuals as well as VPIRG and 350Vermont:

"The overwhelming majority of the comments opposed the Commission’s approval of the petition for one or more of the following allegations:
• Noverco’s petition presents no realistic benefits to the public good but would have significant risks for the State.
• There is no positive effect for Vermonters in allowing Enbridge’s increased influence on GMP and Vermont Gas.
• Enbridge’s goal is to increase fracked-gas infrastructure that negatively affects climate change and human rights.
• Enbridge has a questionable corporate safety history and has been responsible for numerous pipeline incidents.
• Approving the petition will interrupt Vermont’s achievement of its 2050 energy goals and stifle innovative ways to provide clean power.
• Allowing Enbridge’s increased ownership will deviate from the State’s ability to respond to climate change by increasing the risk of more fossil-fuel infrastructure along existing rights of way, oil spills, and pipeline explosions.
• Ownership of public utilities and Vermont’s energy future should be local and not monopolized by a corporate giant that the State could not control.
• Approving the petition would eliminate Valener’s public shareholder voice in Noverco’s decision-making about GMP and Vermont Gas.
• Approving the petition would result in increased electrical rates."

The attorney for the opponents (Intervenors), James Dumont of Bristol, told VBM October 28 that they are still considering their options as regards a potential appeal.

The largest stakeholder in Energir is Caisse de dépôt et placement du Québec, from which the new CEO came three years ago. CDPQ is the controlling partner of Trencap, which owns 61.11 percent of Noverco, with Enbridge owning the rest. Parsing out the several individual investors, CDPQ is also the largest single investor in Énergir, and therefore GMP and VGS, with a 39.6 percent stake in Noverco and Enbridge is second with a 38.9 percent stake.

Enbridge is the largest crude oil and natural gas pipeline company in Canada; It also operates in the United States.

According to its Website, CDPQ was founded by the government of Quebec in 1965 to manage the funds of the Québec Pension Plan, a newly-created universal retirement plan. It has since grown into an international investor with C$325 billion under management, mostly in pension plans and public and parapublic insurance plans.

In leaving Énergir, Brochu said: "It is a great privilege to work for an organization as inspiring as Énergir. It has been a pleasure to work with seasoned colleagues who are committed, not only to the interests of their customers and shareholders, but also to those of society at large. That said, I think that all organizations need to have someone new take over at the helm from time to time to ensure continued momentum, and that was the thinking behind my decision."

Éric Lachance

"I hired Éric Lachance three years ago, when he was managing the Caisse de dépôt et placement du Québec's infrastructure portfolio in Europe. Éric brings to the Énergir team an understanding and a broad vision of the energy sector. He will draw on those assets to project Énergir even further into the future," Brochu said.

Éric Lachance said: "At Énergir, I joined a top-notch management team that is fully committed to making a difference in the communities it is privileged to serve. I am honoured to be working with my colleagues and I'm excited about the challenge of collaborating with them to develop the Québec flagship that Énergir has become on both sides of the border."

On behalf of the directors, Jean Houde, Chairman of the Board of Énergir Inc, said he would like to thank Sophie Brochu for Énergir's remarkable growth in recent years, and to underscore the complete trust that has been placed in Éric Lachance and the management team to ensure a successful future.

Energir ownership structure before Valener sale on September 17, 2019

Source: www.energir.com

About Énergir

With more than $7 billion in assets, Énergir is a diversified energy company whose mission is to find increasingly sustainable ways to meet the energy needs of its 520,000 customers and the communities it serves. In Québec, it is the leading natural gas distribution company and also produces, through its subsidiaries, electricity from wind power.

Through its subsidiaries in the United States, the company operates in 15 states where it produces electricity from hydraulic, wind and solar sources, while serving as the leading electricity distributor and the sole natural gas distributor in Vermont.

Énergir values energy efficiency and invests both resources and efforts in innovative energy projects such as renewable natural gas and liquefied and compressed natural gas. Through its subsidiaries, it also provides a variety of energy services. Énergir aspires to become the partner of choice for those striving for a better energy future.

SOURCE MONTRÉAL, Oct. 21, 2019 /CNW Telbec/ - Énergir www.energir.com/