PSB: CVPS-GMP Merger Provides "Historic Opportunity" for Savings
June 15 2012 - 1:46PM
Marketwired
The Vermont Public Service Board (PSB) today approved an historic
combination of Green Mountain Power and Central Vermont Public
Service (NYSE: CV). After more than nine months of testimony and
extensive deliberations, the PSB said the merger would benefit
customers and be in the public good. The approval is an important
step in creating one utility that will provide hundreds of millions
of dollars of savings and other benefits for its Vermont consumers.
A formal closing is expected in late June.
In its order the PSB said, "The Proposed Transaction represents
an historic opportunity to achieve significant, immediate and
enduring benefits for all retail customers of CVPS and GMP,
Vermont's two largest electric utilities."
BOON TO VERMONT ECONOMY "This
once-in-a-lifetime opportunity will save customers money and create
additional significant benefits to customers of both utilities,"
said Mary Powell, president and chief executive officer of Green
Mountain Power. "Our guaranteed cost savings and reliability
improvements will help our customers with their own household and
business budgets, and be a boon to Vermont's economy at a time when
it is critically needed. We have set a goal to become the best
small utility in the country, and with this regulatory approval, we
can begin the work to make that goal a reality."
Many of GMP's customers look forward to the merger
benefits."This merger will be good for our business because the
guaranteed savings that must be returned to customers will help to
lower our energy costs, which is a critical component of helping us
achieve success and be competitive with low electricity rates in
other parts of the country," said Paul Frascoia, CEO and President
of Fab-Tech, Incorporated, of Colchester, Vermont.
The PSB said the new company will provide unique benefits that
could only result from combining the two Vermont utilities. Through
more efficient operations, achieved without forced relocations or
layoffs except some executives, Green Mountain Power has guaranteed
rate savings of $144 million over the next 10 years, with even
greater savings continuing after that. Those savings will be seen
through rates for customers that will be lower than they would
otherwise have been, with required PSB reviews to ensure customer
savings are achieved.
Larry Reilly, president and CEO of CVPS, said the merger was
long overdue. "CVPS and GMP are among the best small utilities in
America today, but together the men and women of the new GMP will
be better positioned to serve our neighbors across Vermont," Mr.
Reilly said. "There is justifiable pride in our record of customer
service, reliability and storm response at CVPS, but I am confident
that our employees will work with their new co-workers at GMP to
provide even greater service levels in the years ahead. And I am
confident that GMP will continue and expand CV's commitment to the
communities we have traditionally served, including Rutland."
NEW STRUCTURE BRINGS MULTIPLE BENEFITS FOR
CONSUMERS The combined utility will provide other important
features for customers and Vermont. It will transfer 38 percent of
its ownership in VELCO to a public trust, ensuring that ownership
and control of VELCO will remain with Vermont entities. The
transfer of stock to the Vermont Low Income Trust for Electricity
(VLITE) will generate an annual dividend of $1 million that the PSB
has directed in its order will "fund projects and initiatives that
further the energy policies of the State of Vermont."
The PSB approval incorporates the agreement that GMP reached
with the Vermont Department of Public Service that increased the
benefits to Vermonters from $144 million to $177 million by
providing more benefits to customers sooner than originally
proposed, increasing Vermonters' voice in the control of VELCO,
investing millions of dollars in efficiency and weatherization to
benefit customers, and setting a higher reliability standard that
the new company must achieve.
Green Mountain Power will continue the historic commitment that
CVPS has to its hometown by locating the Headquarters for
Operations and Energy Innovation in Rutland. In addition, Green
Mountain Power will build upon CVPS's extensive community support
efforts, and will support economic development and job creation
opportunities in Rutland. And consistent with GMP's leadership in
solar and wind, the company has committed to making Rutland
Vermont's "Solar City."
In addition to the financial benefits for customers, this new
chapter of a combined CVPS and GMP will improve reliability and
service for Vermonters. A contiguous service territory and one
operations headquarters will streamline storm response to restore
power faster and reduce the overall frequency and duration of
outages. Also, with the benefit of the combined utility's
information technology resources, it will be able to move basic
services online more swiftly, and allow customer service
representatives to provide more personalized service, which will be
especially important for the implementation of the statewide Smart
Grid initiative.
"The talented and dedicated workforce at the new Green Mountain
Power is excited about the many new ways we can provide significant
value to our customers," Ms. Powell said. "Our mutual deep
commitment to our communities and to all our customers will help us
be successful in achieving the guaranteed benefits to Vermonters so
that we will become the best small utility in America."
About Green Mountain Power Green Mountain
Power generates, transmits, distributes and sells electricity in
Vermont and is a leader in wind and solar generation.
www.greenmountainpower.com.
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