Statement to the media on proposed
sale
of Green Mountain Power Corp.:
MONTPELIER, VT, October 17, 2006 -- In the interest of protecting Vermont ratepayers,
AARP Vermont has elected to intervene in the proposed sale of Green Mountain
Corp. (GMP) to Northern New England Energy Corporation. In our motion for
summary judgment, appearing below, AARP Vermont outlines its intention to see
that the Vermont Public Service Board (PSB) upholds its order of Jan. 23, 2001
as it relates to this sale.
Simply put, the PSB ordered that a portion of the proceeds from any GMP
company sale or merger be returned directly to ratepayers. Instead, the
company has proposed to charge ratepayers for an investment in an efficiency
program to try to satisfy the above order. If allowed to go forward,
ratepayers would be denied their legal right to nearly $9 million – monies
they paid in the form of higher rates to help the company absorb what was
deemed an imprudent contract with Hydro-Quebec years ago. Furthermore,
ratepayers would be paying additional funds so GMP could invest in a program
that would benefit the company directly.
Details of the case are in outlined in the documents below as filed
with the PSB on Friday. Questions or
requests for comment should be directed to Philene Taormina, advocacy director
at AARP Vermont at 802-224-1104 or [email protected].
AARP
MOTION FOR SUMMARY JUDGMENT
AARP moves pursuant to Board Rule 2.103 and 2.105
and V.R.C.P. 56 for summary judgment. A statement of material
undisputed facts is attached. Summary judgment should be granted for the
following reasons.
1. The Board’s final, unappealed order in Tariff
Filing of Green Mountain Power Requesting a 12.9% Rate Increase,
Docket 6107, January 23, 2001 (pp.248-49), concluded as follows:
25. As is
more fully described in Section IV.G of this Order, GMP's ratepayers shall
receive fifty percent of the above-book proceeds of any sale or merger of
GMP, or sale of its regulated assets, subject to a cumulative limit of $ 8
million, such limit to be adjusted for inflation. GMP shall notify this Board
no later than February 14, 2001, as to whether GMP requests a prompt Board
investigation into the specific design of the procedure by which the windfall
sharing is to be implemented.
2. GMP’s prefiled testimony and Petition
demonstrate that the acquisition will be for a price tens of millions of dollars
above book value.
3. The terms of the acquisition do not include
payment to ratepayers of any “proceeds” from the proposed
acquisition. Instead, GMP proposes to do the opposite. GMP plans to
charge to ratepayers an investment in an efficiency fund in order to try to
satisfy the requirement set forth above. It also plans to obtain a return
on the investment.
MEMORANDUM
In Docket 6107, AARP opposed the rate increase sought, and also asked the Board
to condition any requested rate increase upon two measures it had submitted to
protect the interests of ratepayers. One would have returned money to
ratepayers in the event share prices recovered and reached a certain
level. The other was designed to return money to ratepayers in the event
the company was purchased. The Board adopted the latter measure,
over GMP’s and the Department’s objections. It rejected the
former measure.
AARP chose not to appeal the Board’s decision. GMP also chose not
to appeal. The decision became a final judgment within the meaning of the
rules of res judicata or claim
preclusion, and issue preclusion.
From the
date the judgment became final, it was too late for AARP to challenge the rate
increase or the failure to impose both of the ratepayer-protection measures it
had submitted. From that date, the judgment also became binding
upon GMP. As the Court held in Johnston v. Wilkins, 2003 VT
56:
¶ 8. We conclude that the doctrine of res
judicata precluded the superior court from reforming the parties' non-competition
agreement, and thus we need not review the court's determination that the
agreement is commercially unreasonable. The parties' previous lawsuit
ended in a stipulated settlement that was incorporated in the court's final
judgment
disposing of the matter. Therefore, the
stipulated settlement has the preclusive effect of a final
judgment… Unappealed final judgments may be disturbed only pursuant
to the criteria set forth in V.R.C.P. 60(b).
See also In re Cent. Vt. Pub. Serv. Corp., 172 Vt. 14, 769 A.2d 668 (2001), applying issue preclusion and
claim preclusion to rate orders of the Board.
Now GMP
seeks approval of its planned purchase by Gaz Metro’s subsidiary.
GMP does not intend to comply with the Board’s order in Docket
6107. As is set forth in Mr. Dutton’s prefiled testimony at pp.
17-21, GMP is taking the position that the Board’s analysis of the costs
to ratepayers of the Hydro-Quebec contract was wrong, and therefore that the
company no longer needs to comply with the unappealed final order.
Instead of providing money from the proceeds of the purchase transaction and
returning these funds to ratepayers, as the Board order directs, GMP plans to
take additional money from ratepayers and invest that money for its own return.
GMP’s planned “efficiency” fund investment involves billing
ratepayers for 100% of the investment. GMP will obtain both return on
and return of those funds to the company.
As a
matter of law, the Company is bound by the 2001 Order. The Petition and
the supporting testimony of the Company’s President demonstrate that the
Company does not intend to comply with the 2001 Order. No proceeds from
the sale will be provided to ratepayers. The Petition therefore should be
dismissed
Date: October 12, 2006.
AARP
STATEMENT
OF UNDISPUTED FACTS IN SUPPORT OF
AARP
MOTION FOR SUMMARY JUDGMENT
1. The Board’s final, unappealed order in Tariff
Filing of Green Mountain Power Requesting a 12.9% Rate Increase,
Docket 6107, January 23, 2001 (pp.248-49), concluded as follows:
25. As is
more fully described in Section IV.G of this Order, GMP's ratepayers shall
receive fifty percent of the above-book proceeds of any sale or merger of
GMP, or sale of its regulated assets, subject to a cumulative limit of $ 8 million,
such limit to be adjusted for inflation. GMP shall notify this Board no later
than February 14, 2001, as to whether GMP requests a prompt Board investigation
into the specific design of the procedure by which the windfall sharing is to
be implemented.
2. The acquisition will be for a price tens of
millions of dollars above book value. (Company President Dutton’s
prefiled testimony assumes that the full 8 million, plus the inflation
adjustment, is due; see Mr. Dutton’s prefiled testimony at pp. 17-21.)
3. The terms of the acquisition do not include
payment to ratepayers of any “proceeds” from the proposed
acquisition. Instead, GMP proposes to do the opposite. GMP plans to
charge to ratepayers an investment in an efficiency fund in order to try to satisfy
the requirement set forth above. It also plans to obtain a return on the
investment. (Mr. Dutton’s prefiled testimony at pp. 17-21.)
Date: October 12, 2006.
AARP