Small Utilities Push For A Seat On VELCO Board

02/01/12 5:50PM By John Dillon
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(Host) Small electric utilities in Vermont are worried that their concerns will be overwhelmed if the state's two largest power companies merge and gain control over the transmission network.

As VPR's John Dillon reports, the attention is again focused on VELCO, the company that manages the statewide electric grid.

(Dillon) Control of the transmission grid has been a recurring theme of Vermont utility history.

Avram Patt is manager of the Washington Electric Co-op, a small utility based in East Montpelier. He says public ownership and oversight of the grid was proposed back in the 1950s.

(Patt) "So, it's not really a new idea. But this is a real potential historical turning point for the utility industry in Vermont, the proposed merger. And if that is approved by the Public Service Board we think this is an opportunity to really take a look at how the grid is operated and for whose benefit in the long term."

(Dillon) The issues about VELCO are being raised as the Public Service Board gets ready to review the planned sale of Central Vermont Public Service Corporation to GazMetro of Montreal and its merger with Green Mountain Power, which Gazmet already owns.

Patt is concerned that smaller utilities will get overruled in decisions about the transmission network if VELCO ownership is concentrated in one merged company that sells power to 70 percent of the state's ratepayers.

Washington Electric wants seats on the VELCO board for itself and other co-ops and municipally owned electric companies.

(Patt) "We would take that governance and actually change the ownership and see if it could operate more cost effectively as some form of quasi public entity rather than as a private company."

(Dillon) The Stowe Electric Department is a municipally owned utility that serves the resort community. And in testimony filed with the PSB, the Stowe utility says VELCO has at times operated like a "private club."

Ed French is an attorney who represents the Stowe Electric Department. He says VELCO made decisions about who would pay for a new transmission line that serves the town without Stowe having a seat on its board.

(French) "We've had some difficulties with the operational structure of VELCO as the testimony does point out. What we're seeking in the existing process is for the board to be reconstituted in a way that will be more responsive to the concerns of all Vermont utilities."

(Dillon) VELCO Vice President Kerrick Johnson says that VELCO is an open organization that operates under strict federal and state oversight.

Johnson says the money that VELCO makes is returned to ratepayers. And he warns that putting public members on the VELCO board could "destabilize" the company when it comes to making decisions about multi-million dollar transmission projects.

(Johnson) "Every single project we undertake can only be pursued and built unless it's found by the Public Service Board to be in the public good. It's in our DNA. So I understand there's concerns about having one much larger owner. But regardless of the size of that owner, the rules of how we have to conduct ourselves - of what projects we are allowed or not allowed to build - don't change."

(Dillon) The Public Service Department, the agency that represents utility customers, also wants public members on the VELCO board.

For VPR News, I'm John Dillon in Montpelier.

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