YCQM - Liz Miller - April 15, 2012 - WCAX.COM Local Vermont News, Weather and Sports-

YCQM - Liz Miller - April 15, 2012

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BURLINGTON, Vt. -

April 15, 2012 -- Vt. Public Service Commissioner Liz Miller joins Kristin Carlson and Darren Perron to discuss energy, including the CVPS/GMP merger.

TRANSCRIPT:

>> GOOD MORNING, EVERYONE. I'M DARREN PERRON.

>> AND I'M KRISTIN CARLSON. OUR NEWSMAKER THIS MORNING IS THE PUBLIC SERVICE COMMISSIONER LIZ MILLER.

>> THANK YOU FOR JOINING US.

>> THANKDZ FOR HAVING ME.

>> THE PROPOSED MERGER HAS GOTTEN A LOT OF ATTENTION. THE LEGISLATURE HAS HELD SEVERAL HEARINGS ON THIS, THE MOST RECENT WAS YESTERDAY, ON THE MERGER BETWEEN CENTRAL HAVE THE PUBLIC SERVICE AND GREEN MOUNTAIN POWER. THE CARDS SEEM TO BE STACK FOR PEOPLE WHO ARE IN FAVOR OF THE PROPOSED MERGER. DO YOU THINK IT WAS A FAIR HEARING YESTERDAY?

>> YES, I THOUGHT IT WAS A THOROUGH HEARING, IT LASTED MORE THAN TWO HOURS, WE HAD WITNESSES FROM THE FORMER PUBLIC SERVICE BOARD THROUGH AARP PRESENTING TO THE COMMITTEE, AND WHILE A NUMBER OF BUSINESSES AND THE UTILITIES THEMSELVES PRESENTED, I FEEL THAT IT GAVE THE COMMITTEE A QUESTION TO ASK A LOT OF QUESTIONS, GET A LOT OF INFORMATION. IT'S MY UNDERSTANDING THAT'S WHAT THEY WERE LOOKING FOR. I THINK IT WAS A GOOD HEARING.

>> IT'S INTERESTING BECAUSE THERE WAS ANOTHER HEARING, CAUCUS THAT YOU TALKED TO IN THE SENATE THE PREVIOUS WEEK THAT, AGAIN, AT THIS POINT THE LEGISLATURE ISN'T REALLY INTERVENEING -- THAT SENATE HEARING GOT A LOT OF FEEDBACK, SOME THOUGHT IT WAS HEATED, SOME THOUGHT IT WAS INAPPROPRIATE QUESTIONS, AND SO WHY WERE THEY EVEN TAKING TESTIMONY ON IT IT IF IT'S A PUBLIC SERVICE BOARD QUESTION?

>> THAT'S A FAIR QUESTION, BUT THE LEGISLATURE SEEKS ANSWERS ON WHAT'S GOING ON IN THE PUBLIC SPHERE. FOR EXAMPLE, WE'VE PRESENTED ON NEW ENGLAND. WE WANT TO HEAR WHAT OTHER STATES ARE DOING WITH THEIR ENERGY POLICIES. THAT HELPS THE LEGISLATURE IN THEIR WORK, AND TO GIVE INFORMATION TO THEIR CONSTITUENTS, SO I THINK IT'S VERY APPROPRIATE FOR THE LEGISLATURE TO ASK QUESTIONS, SEEK INFORMATION, AND I UNDERSTAND THAT THEY DO THAT EVEN IF THEY DON'T EXPECT TO HAVE LEGISLATIVE ACTION AFFECT THE OUTCOME.

>> WE'RE SEEING VIDEO OF THE DAY YOU WERE SPEAKING BEFORE THE SENATE. DO YOU THINK YOU WERE REALLY CALLED THERE TO TALK ABOUT THIS MERGER? DO YOU FEEL LIKE YOU WERE GRILLED DURING THAT HEARING?

>> WELL, YOU KNOW, I'VE HEARD THAT TERM USED SINCE. I CAME THERE TO PRESENT INFORMATION AND EXPLAIN TO THE SENATE WHY THIS MERGER, IF IT IS APPROVED WITH THE CONDITIONS WE'RE LOOKING FOR, WELL IN THE GF A STATE AS A WHOLE. WE'LL SAVE RATEPAYERS MONEY, AS THIS DEAL IS PUT TOGETHER. THAT'S WHY I CAME. I CAN'T GET INTO THE MINDS OF INDIVIDUAL SENATORS AND WHY THEY CAME TO LISTEN, BUT I THINK A NUMBER OF THEM WANTED INFORMATION. SOME OF THEM CAME WITH SPECIFIC VIEWPOINTS AND OPINIONS, AND THAT'S THEIR PREROGATIVE TO DO THAT. I DIDN'T FEEL IT WAS A GRILLING, PER SE. YOU HAVE TO REMEMBER MY BACKGROUND, I'M USED TO ARGUING, I USED TO BE A LITIGATOR. SO GOING INTO AA SITUATION LIKE THAT AND ANSWERING TOUGH QUESTIONS IS WHAT I EXPECT TO DO, AND THAT'S WHAT I DID.

>> WILL RATE PAYERS SEE THE RATES GO DOWN?

>> IT WILL CREATE $144 MILLION OF SAVINGS FOR RATEPAYERS. THAT'S A SIGNIFICANT AMOUNT OF MONEY. IBM HAS CALCULATED THAT UNDER THE TERMS OF THE MERGER SAVINGS THAT WE NEGOTIATED, THEY'RE SAVING IN THE FIRST FIVE OR SIX YEARS OF THE DEAL WOULD BE AT LEAST $2 MILLION. THAT'S A SIGNIFICANT AMOUNT OF MONEY. FOR AN AVERAGE CUSTOMER THAT USES FAR LESS ELECTRICITY, THEY'LL GET A BENEFIT IN PROPORTION OF THE ELECTRICITY THEY USE.

>> IF THEY HAVE A $100 BILL NOW, THEY WOULD SEE IT DROP 90, 80 BUCKS?

>> THE WAY THE GUARANTEE WORKS, IT WILL ACTUALLY BE TAKEN OUT OF THE BASE THAT THE UTILITIES OTHERWISE GET TO USE TO SET THEIR RATES, SO IT WILL LOWER WHAT THE RATES OTHERWISE WOULD BE. I'M ALWAYS CAREFUL WHEN I TALK TO FOLKS IN THE LEGISLATURE OR ELSEWHERE TO SAY, LOOK, RATES GO UP FOR A LOT OF DIFFERENT REASONS. THE REASON WHY THIS MERGER IS A GOOD THING AND A GOOD VALUE FOR VERMONT IS BECAUSE IT GIVES US A PLACE TO HAVE SIGNIFICANT SAVINGS AND BRING THAT PRESSURE DOWN. SO OVER THE 10-YEAR, $144 MILLION THAT WE'RE TALKING ABOUT, IT'S SOMETHING NORTH OF 5%. IN TERMS OF THE RATE DEPRESSION. AND IT DEPENDS ON WHAT HAPPENS ELSEWHERE IN THE POWER MARKETS, BUT THAT'S NOT DIRECTLY AFFECTED BY THE MERGER. THE MERGER IS ALL ABOUT CREATING SAVINGS BY ALIGNING THE TERRITORIES, STREAMLINING THE WAY THE COMPANIES DO BUSINESS, AS WELL AS HAVING BETTER SERVICE FOR VERMONTERS.

>> A LOT FEEL OVER $700 MILLION, IT'S BEEN NEGOTIATED VERY INTENSELY, THE SHUMLIN ADMINISTRATION HAS BEEN ON BOARD, BUT THERE IS A LOT OF CONCERN ABOUT THE $21 MILLION, HOW IT GETS RETURNED TO VERMONTERS. HELP US UNDERSTAND, COMMISSIONER MILLER, WHEN VERMONTERS SEE THAT NUMBER, HOW COULD $20 MILLION POTENTIALLY SINK A $700 MILLION DEAL?

>> YOU HAVE TO HAVE A PERSPECTIVE OF WHERE THE WHOLE THING CAME FROM. ABOUT A YEAR AGO, CVPS EXPECTED TO BE SOLD, AND THERE WERE MULTIPLE BIDDERS. GMP WAS ONE OF THOSE BIDDERS. THEY HAD TO STRETCH THIS BID. THE REASON THAT THEY DID THAT WAS BECAUSE THEY SAW THEY COULD BRING A DEAL, NOT JUST THAT I WAS GOOD FOR THE SHAREHOLDERS, BECAUSE EVERY ACQUISITION IS GOOD AND SHAREHOLDERS BENEFIT OR THEY WOULDN'T HAPPEN, BUT A DEAL THAT WAS GOOD FOR THE CUSTOMERS BY CREATING ALL OF THIS MERGER SAVINGS. THAT WAS A STRETCH. HAVING THE DEAL COME TOGETHER IN THE WAY THAT IT DID WAS BASED ON WHAT THE BOARD HAS DONE IN THE PAST. AS I THINK YOU PROBABLY HEARD IN SOME OF THE LEGISLATIVE HEARINGS, AN EFFICIENCY BOARD APPROACH WAS APPROVED FIVE YEARS AGO, AND THAT WAS IN A CASE WHERE THERE WASN'T EVEN A MERGER CREATING ALL OF THESE TERRIFIC AND SIGNIFICANT SAVINGS. HAVING THAT PERSPECTIVE WHEN THE DEAL CAME TOGETHER -- IT MAKES SENSE TO ME THAT THE WAY THAT THE DEAL WAS FILED BY GMP DID NOT INCLUDE IN ANY RESPECT THE $21 MILLION. GMP'S INITIAL POSITION WAS THAT THE $144 MILLION THAT THEY WILL BE SAVING CUSTOMERS AND THAT WE HAVE GUARANTEED WITH THE MEM DUM OF UNDERSTANDING WOULD SATISFY -- MEMORANDUM OF UNDERSTANDING WOULD SATISFY THAT WINDFALL. THEY SAID WE NEED SOMETHING MORE, WE ALSO WANT TO MAKE THIS EFFICIENCY INVESTMENT, WHICH IS IN LINE WITH WHAT THE BOARD DID BRIEFUS GI, AND GMP DID DID THAT.

>> BUT WHO WILL SEE WHAT THE EFFECT? SENATOR RANDY, A REPUBLICAN, HAS BROUGHT THIS LETTER FROM A CUSTOMER WHO SAYS I'M AN ELDERLY WOMAN, I'M NOT GOING TO SEE ANY BENEFIT, I'M NOT GOING TO SEE THIS MONEY, WHY CAN'T I GET MY MONEY RETURNED. I GUESS, AGAIN, MY QUESTION IS, YOU KNOW, WHY WOULD $20 MILLION SINK THE DEAL? IF THERE IS A CONCERN YOU'RE HEARING FROM A TRI-PARTISAN GROUP OF LAWMAKERS, WOULD REOPENING AND HAVING A NEW NEGOTIATION MEAN THE DEAL IS DONE? THERE IS NO ROOM FOR NEGOTIATION ON THAT?

>> YOU KNOW, THE NEGOTIATION THAT THE DEPARTMENT HAD IS SUBJECT TO THE PUBLIC SERVICE BOARD APPROVAL, AND IT'S NOT JUST HOW NEGOTIATION AND OUR MEMORANDUM OF UNDERSTANDING, BUT IT'S RUTLAND'S PROMISE NOT TO HAVE LAYOFFS, IT'S IBM AND SOME OTHER BUSINESS INTERESTS THAT ENTERED INTO MEMORANDUMS OF UNDERSTANDING ON RATE PATHS, AND ALL OF THOSE AGREEMENTS TOGETHER ARE PRESENTED TO THE PUBLIC SERVICE BOARD, AND IT'S REALLY THE PUBLIC SERVICE BOARD PROCESS TO LOOK AT THOSE AGREEMENTS, LOOK AT THE EVIDENCE IN THE CASE, AND DECIDE WHAT THE BEST THING TO DO IS. FROM THE DEPARTMENT'S POINT OF VIEW IN THE NEGOTIATIONS WITH GMP, WE WERE LOOKING AT THE WHOLE YEAR, AT THE SIGNIFICANT SAVINGS, AND I WOULD SAY TO THE PERSON THAT YOU MENTIONED IN THE LETTER FROM SENATOR BROCK, THIS MERGER IS GUARANTEEING TO BRING $144 TO RATE PAYERS IN THE FIRST TEN YEARS, AND IT'S JUST ON OPERATIONS AND MAINTENANCE, NOT EVEN INCLUDING SAVINGS BEYOND THE TEN YEARS AND COMES FROM A COMPANY HAS BETTER FINANCING AND BETTER NEGOTIATING ON POWER CONTRACTS BECAUSE IT'S LONGER AND ALL OF THAT, AS WELL AS SERVICE QUALITY BENEFITS. THERE ARE BENEFITS TO CUSTOMERS. I THINK APPROACHING THE NEGOTIATIONSES AS A WHOLE AND TAKING IT THAT WAY WAS THE WAY WE LOOKED AT IT, AND I THINK IT'S THE WAY VERMONTERS WILL ULTIMATELY LOOK AT.

>> YOU HAD MENTIONED THAT THE AARP WAS AT THAT HOUSE HEARING THE OTHER DAY. OF COURSE, THEY ARE THE BIGGEST PROPONENT OF RETURNING THAT $21 MILLION THEY WANT TO SEE CHECKS CUT TO THE PEOPLE WHO WERE PART OF THE BAILOUT. WHAT DO YOU SAY TO THOSE FOLKS?

>> WELL, AARP HAS ACTIVELY PARTICIPATED IN FRONT OF THE BOARD. IT HAS HIRED EXPERTS AND ATTORNEYS, IT HAS DONE A VIGOROUS, FULL-FLOATED JOB OF PRESENTING ITS -- FULL-THROATED JOB OF PRESENTING ITS POSITION. I THINK WE SHOULD STEP BACK FROM THAT FOR JUST A MOMENT. IT'S NOT RETURNING CHECKS TO THE SAME CUSTOMERS WHO PAID IN HIGHER RATES WHEN THE HQ CONTRACT WAS RULED ON BY THE BOARD. IT'S RETURNING IT TO BE EXISTING CUSTOMERS. SOME HAVE MOVED IN, SOME JUST RECENTLY, OTHER CUSTOMERS HAVE LEFT OR NO LONGER WERE IN CVPS TERRITORY FOR OTHER REASONS. ALTHOUGH AARP'S GOT A GOOD SOUNDBITE, I DON'T THINK IT GETS TO THE UNDERLYING ISSUE, WHICH IS CUSTOMERS PAID TO BAIL OUT CVPS OVER 10 YEARS AGO, THEY DID THAT TO AVOID BANKRUPTCY AND FRANKLY EVEN GREATER PROBLEMS FOR THE RATEPAYERS, NOT IN TERMS OF JUST MONEY BUT SERVICE QUALITY AT THE TIME. THE BOARD RECOGNIZED AT THAT TIME THAT IT WOULD HAVE TO DECIDE LATER HOW TO ACTUALLY TREAT THAT WINDFALL. IT DID NOT ORDER REFUNDS. AND THEN WHEN IT LOOKED AT THE GAS METRO ACQUISITION, IT REJECTED REFUNDS IN FAVOR OF OUR PLAN LAID OUT IN THE MEMORANDUM OF UNDERSTANDING. AARP'S POSITION IS VERY UNDERSTANDABLE, AND THEY'RE DOING A GOOD JOB PRESENTING IT, BUT IT'S NOT THE BASIS OF THE HISTORY HERE.

>> A BIG PART OF THE PROBLEM WOULD BE TRACKING DOWN THE FOLKS WHO WERE PART OF THAT BAILOUT TO BEGIN WITH?

>> SURE. THERE'S NO PERFECT -- AARP REALIZES, THERE IS NO PERFECT SOLUTION. THAT'S WHY THE BOARD IN THE ORIGINAL HQ ORDER LEFT THE MECHANISM FOR RETURNING THE VALUE TO A FUTURE DECISION. BECAUSE THAT ORDER WENT ON INTO THE FUTURE. IT COULD HAVE BEEN NOT JUST NOW BUT 10 YEARS FROM NOW THAT CVP WAS PUT UP FOR SALE, AND THEN WHAT, WITH A WHOLE NEW GENERATION OF CUSTOMERS? I THINK THE PROBLEM WAS CLEAR, AND WHEN IT WAS ADDRESSED, THE BOARD SPECIFICALLY SAID CUSTOMERS CREDITS, REFUNDS, NO, WE'RE NOT GOING TO DO THAT. WE'RE GOING TO INSTEAD APPROVE AN EFFICIENCY FUND. EFFICIENCY IS GOOD NOT JUST FOR THE CUSTOMERS WHO ACCESS IT INDIVIDUALLY BUT FOR THE SYSTEM AS A WHOLE, ON THE THERMAL HOME-HEATING SIDE, IT SAVES MONEY INTO THE FUTURE, IT SAVES MONEY WHEN YOU INSULATE YOUR WALLS. THE BOARD HAS LOOKED AT THIS IN THE PAST, AND WE BELIEVE THIS IS APPROPRIATE HERE.

>> THE $21 MILLION QUESTION HAS CREATED INTERESTING ALLIES AND ENEMIES. PETER SHUMLIN THINKS THE AGREEMENT SHOULD MOVE FORWARD AS IT STANDS, BUT IT'S INTERESTING BECAUSE ONE OF HIS ARGUMENTS IS THAT THE LEGISLATURE SHOULD NOT INTERVENE WHILE THERE'S A PUBLIC SERVICE BOARD DOCKET, AND THEY'RE CONSIDERING THIS ISSUE, BUT MANY OF HIS ALLIES SAY WAIT A SECOND, GOVERNOR, YOU INTERVENEED BY HAVING THEM NOT CONSIDERING RELICENSING VERMONT YANKEE. DO YOU THINK THERE IS SOME HYPOCRISY THERE?

>> ABSOLUTELY NOT. THE ORIGINAL LEGISLATION THAT THE LEGISLATURE PASSED ON VERMONT YANKEE WAS NOT IN AN OPEN DOCKET; IT WAS IN 2006 OR OP 06 AND IT SAYS WHEN YANKEE RELIANCES, WE HAVE TO VOTE AT THAT TIME TO SAY WE ARE OKAY WITH THEM PROCEEDING, AND THEN FAST FOARD SEVERAL YEARS WHEN GOVERNOR SHUMLIN WAS GOVERNOR PRO TEM, HE HAD THE SENATE TAKE A VOTE. I CAN SEE THE ARGUMENT, WHAT I THINK IS, IT'S NOT THE SAME THING. HERE WE HAVE AN ACTIVE, OPEN, CONTESTED DOCKET, WE JUST FINISHED A TRIAL ON IT LAST WEEK IN FRONT OF A BOARD, WHICH IS EXPECTED TO MAKE A DECISION IN A COUPLE OF MONTHS. IN THE YANKEE SITUATION, IT WAS THE LEGISLATURE SAYING YOU CANNOT PROCEED UNLESS WE VOTE, AND THAT MADE THAT LEGISLATION BEFORE THE PROCESS HAD OPENED.

>> SO IF THE LEGISLATURE HAD PASSED A LAW LAST YEAR SAYING THIS LEGISLATURE COULDN'T PROCEED UNLESS WE GOT INVOLVED, THAT WOULD HAVE BEEN FAIR?

>> YOU KNOW, LEGISLATURES MAKE PROSPECTIVE CHANGES. THEY PUT IN LAWS THAT WILL APPLY IN THE FUTURE, AND JUST LIKE WITH ENERGY POLICY, PUTTING IN A PARTICULAR SET OF GOALS NOW AND THEN LOOKING AT IT IN THREE YEARS, AND SIMILARLY WITH THE MERGER STANDARD, THE LEGISLATURE COULD, OF COURSE, DECIDE TO LEAD THIS INTO THE FUTURE. THAT'S NOT WHAT HAPPENED HERE.

>> WE'RE GOING TO TAKE A BRIEF BREAK AND MEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEMEME

>> WELCOME BACK. WE'RE TALKING WITH LIZ MILLER. THIS MERGER OF CVPS AND MANOOGIAN MANSION WOULD AFFECT -- AND GMP WOULD AFFECT TENS OF THOUSANDS OF CUSTOMERS.

>> LET'S LISTEN IN TO WHAT THE GOVERNOR HAD TO SAY JUST THE OTHER NIGHT.

>> FROM A PROCESS STANDPOINT, REGARDLESS OF WHERE YOU STAND ON THE DETAILS OF THIS PARTICULAR MERGER, IT IS ABSOLUTELY INAPPROPRIATE FOR THE LEGISLATURE OR THE GOVERNOR TO PASS LAWEDS IN A PENDING CASE. IT'S NO DIFFERENT THAN IF YOU HAD A LEGAL CASE BEFORE A JUDGE FOR A LEGISLATURE TO PASS AN OPINION AND TELL THE JUDGES WHAT TO DO. I HAVE CONFIDENCE IN THE PUBLIC SERVICE BOARD, STAY OUT OF THE WAY IN TERMS OF LEGISLATING TO THE PUBLIC SERVICE BOARD. EXPRESS YOUR OPINIONS TO THEM, HAVE THE ARGUMENT DOWN THERE. KEEP IT OUT OF LEGISLATION AND LEGISLATURE SENT TO THE GOVERNOR. THAT WOULD REALLY UNDERMINE THE PROCESS.

>> GOVERNOR, LET ME JUST MAKE A POINT HERE. ISN'T THAT EXACTLY WHAT HAPPENED DURING VERMONT YANKEE?

>> NO. WHAT HAPPENED AT VERMONT YANKEE WAS GOVERNOR DOUGLAS PASSED INTO LAW LEGISLATURE WHICH SAID THE BOARD CAN'T RELICENSE THE PLANT WITHOUT AN AFFIRMATIVE VOTE FROM THE LEGISLATURE. THAT WAS TRUE WHEN THE PLANT WAS BUILT 40 YEARS AGO. THEY WERE CONTINUING THAT TRADITION. THAT'S VERY DIFFERENT IN MY JUDGMENT THAN ENTERING JUDGMENT IN A PENDING CASE.

>> WE WERE JUST CHATTING A LITTLE BIT ABOUT THAT VERY THING. CAN YOU ELABORATE ON ANY ANYMORE, AND ALSO, SOME FOLKS HAVE CALLED INTO QUESTION THAT STATEMENT ABOUT THAT THE AGREEMENT ON RELICENSURE WAS DETERMINED 40 YEARS AGO WHEN THE PLANT WAS FIRST LICENSED. DO YOU KNOW ANYTHING ABOUT THAT? DO YOU KNOW IF THAT STATEMENT BY THE GOVERNOR IS TRUE?

>> I HAVE AN UNDERSTANDING THAT YEARS AND YEARS AGO, PRIOR TO THE ACTUAL CPG PROCESS AT THE BOARD, THE LEGISLATURE LOOKED AT WHETHER TO ESSENTIALLY GO WITH HYDRO OR NUCLEAR, AND THAT'S A CLOAK WE'LL WAY OF PUTTING IT, BUT THERE -- COLOQUIAL WAY OF PUTTING IT, BUT THE DECISION WAS MADE TO GO WITH NUCLEAR. MY UNDERSTANDING IS IS THAT THE GOVERNOR WAS DISCUSSING THAT LONG-AGO DECISION WHEN THE LEGISLATURE WAS DECIDING WHETHER TO GO WITH SOME OF THE HYDRO FACILITIES AND INSTEAD DECIDED TO ALLOW A NUCLEAR PLANT TO COME IN, WHICH WAS OWNED MOSTLY BY OUR UTILITIES.

>> ANOTHER QUESTION THAT HAS BEEN RAISED IS THE FACT THAT, IF THIS MERGER GOES THROUGH, YOU KNOW, A SIGNIFICANT AMOUNT OF POWER IN THE STATE OF VERMONT IS GOING TO BE COMING FROM OUT OF STATE, OUT OF COUNTRY, IN CANADA. IS THAT A CONCERN AT ALL?

>> THAT THE MERGER GOES THROUGH? IS THAT THE QUESTION?

>> YES.

>> IF THE MERGER GOES THROUGH, WE WILL HAVE CVPS OWNED BY THE SAME PARENT AS GMP IS PRESENTLY OWNED, AND THERE'S A NUMBER OF POWER CONTRACTS THAT WHEN THEY MERGE BOTH KRATHS WILL BRING TO THE TABLE, AND THEY HAVE DIFFERENT LENGTHS OF TIME. THE HYDRO QUESTIONBECK IS WITH A NUMBER -- THE HYDRO QUEBEC IS WITH A NUMBER OF COMPANIES, THE SEABROOK COMPANY IS ANOTHER ONE. I DON'T SEE THE MERGER HAS INFLUENCING ONE WAY OR THE OTHER WHERE THE POWER COMES FROM. THAT PROCESS REALLY IS, AGAIN, A PUBLIC SERVICE BOARD PROCESS, WHERE LARGE CONTRACTS ARE ENTERED INTO. THE BOARD HAS TO LOOK AT IT AND DETERMINE IF IT'S IN THE BEST INTERESTS OF THE RAY RATEPAYER IN THE STATE.

>> ONE CONCERN IS THAT NOW GAS METRO WILL OWN SO MUCH OF THE STATE THAT THEY'LL USE VERMONT AS A BYWAY.

>> I HAVE HEARD THAT. YOU KNOW, WE TOOK THAT CONCERN SERIOUSLY. I THINK GAS METRO AND GMP DID AS WELL AS INITIALLY -- THEY WANTED TO DIE VEST THEMSELVES OF ABOUT A THIRD OF VELCO TO GIVE SOME ASSURANCE THAT, NO, WE DON'T INTEND TO RUN THINGS THROUGH WITHOUT PROCESS, WE DON'T INTEND TO MAKE THIS ABOUT TRANSMISSION, BUT WHEN WE HEARD THE CONCERNS, WE WANTED TO BE SURE THAT VERMONT FEELS COMFORTABLE THAT ITS TRANSMISSION WILL BE GOVERNED WITH VERMONT'S BEST INTERESTS IN MIND. GETTING ADDITIONAL PUBLIC INTEREST AND PUBLIC DIRECTION SETS ON THAT VELCO BOARD WAS IMPORTANT, SO WE ALSO HAVE DAY-TO-DAY -- NOT JUST AS SOON AS THIS MERGE SER PROPOSED BUT INTO THE FUTURE -- MORE PEOPLE IN VELCO, OUR TRANSMISSION COMPANY, GOVERNING THAT COMPANY WITH VERMONT'S BEST INTERESTS IN MIND.

>> A BIG ISSUE IS THE FUTURE OF VERMONT YANKEE. IT'S CURRENTLY OPERATING, THEY'RE SELLING OUT OF STATE BECAUSE OF THIS LEGAL BATTLE WITH THE STATE. IS THIS GOING TO GO TO THE U.S. SUPREME COURT, DO YOU THINK?

>> I CAN'T ONE WAY OR THE OTHER. THE U.S. SUPREME COURT TAKES A FRACTION OF CASES.

>> VERMONT CASES SEEM TO MAKE IT TO WHERE THEY ARE.

>> I HAVEN'T LOOKED FROM A PERCENTAGE POINT OF VIEW. I CAN TELL YOU, THE UTILITIES DIDN'T ENTER INTO CONTRACTS WITH ENTERGY, AS YOU KNOW, THAT HAPPENED BEFORE ANY OF THE LEGAL FIGHT. YOU REMEMBER THE VERMONT ELECTRIC DECISION LAST SPRING.

>> CVPS DIDN'T THINK THEY WERE GOING TO BE RELICENSED.

>> I THINK THE UTILITIES LOOKED AT RISK, AT STATE PROCESS, AT THE FACT THAT ENTERGY HAD LOOKED AT HAVING A DIFFERENT OWNER AND DID NOT DO SO, THEY LOOKED AT RELIABILITY ISSUES. YANKEE IS OPERATING AT ONLY ABOUT A THIRD BECAUSE THERE ARE LEAKS IN THEIR CONDENSEOR BOX. THAT'S NOT AFFECTING US BECAUSE WE'RE NOT RECEIVING CONTRACT FROM THEM UNDER CONTRACT RIGHT NOW. THERE ARE UNIT CONTINGENT CONTRACT, CONTRACT DEPENDENT UPON THE OPERATION OF A PARTICULAR UTILITY, AND VERMONTERS ARE NOT RECEIVING POWER UNDER THAT, GIVEN THE POWER KRABLTHS THEY OTHER -- CONTRACTS THEY OTHERWISE HAVE, THAT'S THE RIGHT DECISION, AND I THINK IT'S A GOOD THING FOR VERMONTERS.

>> I GUESS I'M GETTING MORE AT, YOU KNOW, ARE VERMONTERS IN FOR A LENGTHY LEGAL BATTLE, DO YOU THINK?

>> IT'S INTERESTING, LET ME JUST TELL YOU WHERE WE ARE AT THE PUBLIC SERVICE BOARD. THEY HAVE TO FILE, I THINK A WEEK FROM NOW, A NEW CERTIFICATION FOR PUBLIC GOOD.

>> AND THEN THEY HAVE TO REOPEN THE DOCKET.

>> YES, AND TYPICALLY THOSE ARE SCHEDULED TO LAST BETWEEN SEVEN MONTHS AND A YEAR AND A HALF, AND DEPENDING ON THE OUTCOME, THERE COULD BE APPEALS.

>> AND YANKEE WILL BE RUNNING THAT WHOLE TIME.

>> YES, CONSISTENT WITH ITS ABILITY TO DO SO. AND I DO THINK THAT THIS WILL BE A MULTI-MONTH, PROBABLY MULTI-YEAR PROCESS, BUT IT'S IMPORTANT THAT THE STATE HAVE ITS STAY, THAT THE JURISDICTION OF THE STATE BE RESPECTED, AND MEANWHILE THE ATTORNEY GENERAL IS PURSUING THINGS IN THE FEDERAL COURT SYSTEM, BUT I'M FOCUSED ON THE PUBLIC SERVICE BOARD PROCESS AND WHAT THAT'S GOING TO LOOK LIKE FOR VERMONT.

>> BACK TO THE PROPOSED MERGER, WE'RE SEEING DOWN IN BOSTON ENSTAR IS MERGING, IT'S GOING TO BE THE LARGEST UTILITY IN NEW ENGLAND. IS THIS A TREND IN THE INDUSTRY, TO SEE MERGERS LIKE THAT ONE AND WHAT'S BEING PROPOSED HERE IN VERMONT.

>> AND THERE HAVE BEEN OTHER LARGE OTHER ONES AS WELL. I'M NOT A MERGER AND ACQUISITION EXPERT, BUT I'VE BEEN READING YOU. IT'S MY UNDERSTANDING THAT THE UTILITY INDUSTRY GOES LIKE THIS, LIKE ANY OTHER INDUSTRY, AND THERE SEEM TO BE A NUMBER OF ACQUISITIONS PROPOSED. GIVEN THE WAY THAT POWER MARKETS WORK, AND THE EFFICIENCIES THAT COME FROM HAVING REAL SCALE, I UNDERSTAND THAT. ENERGY COSTS ARE LOW RIGHT NOW, REGIONALLY AND NATIONALLY. AND I THINK IN THAT ENVIRONMENT, HAVING THESE SORTS OF ACQUISITIONS AND MERGERS IS UNDERSTANDABLE. BUT JUST LIKE ANYTHING ELSE, IT'S AN ECONOMIC TREND, A MARKET TREND, AND WE'RE SEEING IT HERE WITH REGARD TO CVPS AND GMP, BUT I THINK THE REAL HEADLINE STORY IS THAT WE'RE GETTING SOMETHING OUT OF IT THAT CAN CREATE RATE SAVINGS.

>> ARE YOU SURPRISED? I MEAN, WHEN YOU TOOK THIS POSITION, DID YOU ANTICIPATE THE SORT OF KERFUFFLE THAT'S BEEN GOING ON OVER THIS, OR DID YOU KNOW WHAT YOU WERE GETTING INTO?

>> I KNEW THAT ENERGY ISSUES ARE DEEPLY FELT IN VERMONT AND HAVE BEEN FOR DECADES, AND I KNEW THERE WERE A NUMBER OF THINGS ON THE DEPARTMENT'S PLATE. WE HAVEN'T EVEN TALKED ABOUT THINGS LIKE BURLINGTON TELECOM AND OTHER THINGS THAT HAVE BEEN IN THE NEWS, AND I WAS EXCITED FOR THAT CHALLENGE AND REALLY LOOKING FORWARD TO HELPING GOVERNOR SHUMLIN AND THE ADMINISTRATION WEAVE THROUGH THOSE ISSUES. I DID ANTICIPATE THAT IT WOULD BE AN INTERESTING JOB, AND THERE WOULD BE A LOT OF THINGS ON OUR PLATE. IN ANY PARTICULAR SITUATION, YOU CAN'T SEE EVERYTHING COMING, AND I WILL SAY THAT THE LEVEL OF ISSUES, OR THE NUMBER OF ISSUES AT THE DEPARTMENT RIGHT NOW, CAN AT TIMES FEEL LIKE A LITTLE BIT MUCH, BUT THAT'S OKAY. I MEAN, THAT'S MY JOB, AND I'M HAPPY TO DO IT.

>> COMMISSIONER LIZ MILLER OF THE PUBLIC SERVICE DEPARTMENT, YOU CAN REACH HER AT HER OFFICE, SHE WOULD LOVE TO HEAR FROM YOU.

>> THANKS FOR JOINING US EVERYBODY. SEE YOU SOON. CAPTIONING PROVIDED BY CAPTION ASSOCIATES, LLC WWW.CAPTIONASSOCIATES.COM

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