AARP Vermont today launched a statewide campaign to recover $21 million owed to ratepayers of Central Vermont Public Service and has formally intervened in the pending merger of Green Mountain Power and CVPS. AARP intervened in December and files its testimony with the Vermont Public Service Board this week. The matter will be considered by the Board in the coming months.
‘AARP is speaking up for the thousands of Vermont ratepayers who reached into their pockets to bail out CVPS in 2001 when it was in serious financial trouble,’ said Greg Marchildon, AARP Vermont state director. ‘They deserve to be paid back and this merger should not go through until the company commits to directly repay this loan.’
AARP said the average CVPS residential ratepayer is due about $76, commercial customers would get an average of $352 and the average industrial customer would get more than $12,000 back. Marchildon said the payment could be in the form of cash, rebate or refund and would go to current CVPS customers. It covers all CVPS customers and is not related to AARP membership.
Eleven years ago, the financial viability of CVPS was severely threatened due to what the PSB deemed ‘imprudent’ contracts with Hydro Quebec. Consequently, the Board imposed a special rate increase on CVPS customers with a ‘windfall provision’ stating that ratepayers must be paid back $21 million ($16 million plus interest/cost of living increases) should CVPS ever become financially healthy enough to merge or be sold. Essentially, the Board treated the rate increase as a loan from ratepayers and ruled that shareholders should not profit from what amounted to a forced emergency loan from customers.
GMP's Manager of Corporate Communications, Dorothy Schnure, offered this written response:
· "GMP is committed to returning savings to customers. That's why we're proposing $144 million in guaranteed minimum savings over the first 10 years with the merger.
· "In addition to that, we're proposing to establish an ongoing trust that will provide $1 million a year in direct assistance for elderly and low-income Vermonters with their electric bills.
· "We believe that the above mentioned savings satisfies the $21 million provision by many multiples. We are pleased to be able to provide this tremendous value, not only to our customers, but to all Vermonters ‘ especially those in need.
"It's important to note that neither the $144 million in savings for all customers or the $1 million per year for older & low-income Vermonters would be possible without the merger. If there's no merger, there's no savings."
Marchildon emphasized that teh windfall provision was always intended to be in addition to any merger benefit. He added that the $21 million itself is only a fraction of the $130 million in above-market payments ratepayers made.
‘This windfall provision is clearly triggered by the merger and we are working to ensure that ratepayers receive a check in the mail or an immediate refund on their electric bill,’ said Marchildon. ‘It’s about fairness and about protecting Vermont consumers ‘ many of whom are older and living on minimal income or meager savings.’
He stated that rolling the refund into projected merger savings over time ‘ as proposed by utility officials -- is inadequate.
‘Certainly the merger will result in savings over time or it would never be approved by regulators. But the refund is a separate matter altogether.’
Marchildon stressed that AARP does not oppose the merger itself, but only wants to ensure customers recover their funds from a decade ago.
He said the Shumlin Administration has not taken a stand on this issue yet. He said the PSB will rule on this issue in the spring.
Advertising for the campaign will begin in early February along with statewide mailings and outreach through various social media. The online petition on the website is currently up and running.
AARP is a nonprofit, nonpartisan membership organization with 127,000 members in Vermont and 40 million members nationally. Through a wide array of special benefits, services, and information resources, we help our members make important choices, reach their goals and dreams, and make the most of life after 50.
AARP BURLINGTON, VT, January, 18, 2012 ‘
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