As the proposal to sell Central Vermont Public Service and merge with Green Mountain Power moves through the regulatory review process, it is more important than ever for Vermont that the discussion about the transaction be based on facts. Unfortunately, as the discussion relates to benefits for CVPS customers, the facts have been occasionally set aside in the public discourse.
As president of CVPS, a company that for years has taken extraordinary pains to be open, direct and transparent, and is recognized by Forbes as one of the most trusted companies in America, I want to set the record straight. The company and our employees take enormous pride in our commitment to talk straight with each other, our customers, regulators and other stakeholders ó an expectation of every CVPS employee.
Through its recent campaign, AARP has essentially claimed CVPS was attempting to avoid an obligation it acknowledged ó a statement AARP should know from its participation in the regulatory review process to be inaccurate and baseless.
From the first days of CVPSís internal discussions about the possibility of selling or merging the company, there has been recognition that the Vermont Public Service Board provided the company with a significant benefit when it allowed the company to recover then above-market Hydro-Quebec power costs in 1998. Although there was no formal loan from customers, as AARP would have you believe, we knew that as a result of that PSB decision, we would be accountable to provide specific customer benefits if we sold the company. That fact was presented to every suitor we investigated as a potential buyer.
GMP recognized that obligation as well, and the joint CVPS-GMP merger proposal filed with the PSB addressed that requirement directly. In our original proposal, we promised $144 million in customer savings over a 10-year period ó benefits that could not occur absent the merger. The math is pretty simple and we believed these benefits would more than satisfy the PSBís expectations of $21 million in direct customer benefits.
In response to a Department of Public Service suggestion to enhance the customer benefits from the proposed merger, we recently proposed an additional investment, which would provide about $40 million in additional benefits to our customers. The proposal was patterned after the PSBís order when GMP was sold several years ago. In short, we thought our original proposal would meet the PSBís expectations, but when convinced otherwise, we proposed additional benefits to ensure we did just that.
AARP may fairly disagree with the way weíve proposed to deliver customer benefits from the sale, but that is not what it has done. Instead, for reasons unclear, AARP acted for months like we never made such proposals, and repeatedly stated, in advertisements, news releases, and interviews, that we have tried to avoid our obligations.
We have been committed from the beginning to meeting our obligations, and frankly find the AARP campaign to be both cynical and disappointing. AARP members and our customers ó indeed all Vermonters ó deserve better.
Larry Reilly is president and CEO of Central Vermont Public Service.
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