Rate Hike Reveals Monopoly Influence in Gov’t

November 3, 2018

By David Flemming

Several months ago, Green Mountain Power received permission from the Department of Public Service (DPS) to raise Vermonters’ electric rates by 5.5%, due to GMP’s recent investments in Vermont’s electric grid. Last week, an ex-employee, Brian Winn, supported an anonymous letter to Vermont’s Public Utility Commission (PUC) protesting the lack of effort from the DPS (especially its commissioner) to negotiate the rate increase suggested by Green Mountain Power. The PUC’s response? ‘None of our business.’ Winn’s letter should be taken seriously, especially considering the questionable oversight from the DPS over Green Mountain Power during the past decade.

Among the letter’s most provocative claims were that: GMP “used an accounting gimmick… shorten(ing) the rate year to nine months” which would mean that the rate increase would be “at least 8%,” instead of the 5.45% which had been reported. DPS “Commissioner Tierney on multiple occasions altered Department witness testimony to remove information that would have been embarrassing to Green Mountain Power. This included removing recommendations about clearly uneconomic and risky investments… that would have saved the ratepayers money.”

In recent years, GMP has made some rather troubling investments, lending the letter a great deal of plausibility. Between 2011-16, Green Mountain Power failed to provide the DPS with documents showing that their investments were in Vermonters’ best interest, according to Vermont Public Radio. At one point, GMP was unable to properly document spending $18 million on wind turbines in the Northeast Kingdom, a cost which the DPS allowed GMP to pass along to its customer base, no questions asked.

The letter also insinuates that the DPS’ light touch on GMP involves career considerations. “Liz Miller, who used to be Commissioner (of the DPS) and signed off on the last very generous alternative regulation multi-year plan, is now representing Green Mountain Power in the new case.” The DPS’ Commissioner Tierney negotiating with GMP’s Miller, who sat where Tierney was sitting a few years ago. We’re left wondering if Tierney went easy on GMP so that she can walk into a higher paying job where she can negotiate against the public on behalf of the GMP.

By granting monopoly privileges, Vermont has incentivized monopolies to take advantage of bureaucrats who have every reason to look toward their next career move, rather than looking out for the common good. South Carolina has recently been looking into breaking up its utility monopolies. Perhaps Vermont should also consider such a move.

David Flemming is a policy analyst at the Ethan Allen Institute

{ 1 comment… read it below or add one }

Ray Thomas December 8, 2018 at 2:49 am

GMP has not been properly monitored by the State for a number of years. Case in point is when they were allowed to steal the $21 million dollars from the rate payers during the merger. Totally unconscionable it’s time the PSB started holding GMP accountable and looking out for the ratepayers. GMP steals money from solar customers by taking any power not used within twelve months!

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