Utility Regulators Make Public Anonymous Allegations In GMP Rate Case

Nov 20, 2018

State utility regulators have taken the unusual step of making public an anonymous letter that alleges close ties between the agency that advocates for ratepayers and Green Mountain Power, the state’s largest electric utility.

The letter concerns GMP’s request to hike rates by 5.45 percent. It said the state has been far too cozy with the power company.

The letter is unsigned but full of alleged insider details on the pending rate case. It focuses on the Department of Public Service, the state agency charged with representing ratepayers. And it appears it may have come from someone on the department staff, because it says “we” were told not to raise certain claims with GMP. It called the department’s position in the case a “sham.”

Commissioner June Tierney heads the department, and said she cannot comment on the substance of the letter. Tierney said she does not believe the letter came from inside her department. And she characterized the anonymous document as an attempt to undermine the process.

“From my point of view, the actual impact of this communication is an attempt to destabilize the PUC process itself and to suggest that there is cause to not have confidence in the decisions the PUC ultimately renders,” she said.

"From my point of view, the actual impact of this communication is an attempt to destabilize the PUC process." - June Tierney, commissioner of the Vermont Department of Public Service.

For Tierney, the letter employs a tactic which she said is far too common in the current public discourse.

“It seems of late the arguments are drifting from the merits of policy to instead taking issue with the character of the individuals who are engaged in crafting the policy, or in enacting the policy,” she said. “And I think that’s regrettable.”

The letter was sent to local news outlets as well as the state Public Utility Commission, the three-person panel that regulates the state's utilities.

"We have not made any judgment about the comment. But it is a substantive comment, and we wanted to make sure the parties, if they wanted to, had an opportunity to say something about it." - PUC Chairman Anthony Roisman

PUC Chairman Anthony Roisman said the commission decided to make the letter public on its website in four GMP cases – just as it does with any other comments – in the interests of transparency.

“We have not made any judgment about the comment. But it is a substantive comment, and we wanted to make sure the parties – if they wanted to – had an opportunity to say something about it,” Roisman said.

The letter said the department’s director of finance and economics was fired after clashing with Commissioner Tierney over the state’s approach to the case. The position is now listed as vacant on the state’s website, and that person could not be reached for comment.

The letter also said Tierney told her staff to settle the rate case. But the case is not settled. It was litigated, and is pending before the PUC for a decision. Tierney said the department and GMP have substantial policy differences that the regulators will now have to resolve, including how to account for GMP’s investments in energy storage devices known as Tesla PowerWalls.

“What we’re trying to balance is the new grid, the new vision, tomorrow’s energy world, against the ratepayers’ interest of today as well, and making sure all this transformation is accomplished with an appropriate allocation of risk and also at the least cost,” she said.

In comments filed with the PUC on Wednesday, the department said it stands by the sworn testimony and the record developed in the case. 

"The department has reviewed the anonymous letter, which materially mischaracterizes the department's investigation of GMP's rate filing and reflects a poor understanding of not just the factual and analytical underpinnings of the pending GMP rate case, but also of rate case litigation process generally," the filing said. "No good cause exists for the Commission to conclude that its proceedings lack integrity or have otherwise failed to facilitate a fair and transparent review of the contested evidence."

GMP spokeswoman Kristin Carlson said the letter’s inference that the department has been soft on GMP is wrong.

“This rate case has been a really rigorous, thorough process that has extended over months and months. There’s been expert analysis, there’s been public hearings, public involvement,” she said. “This case is fully litigated and right now it rests with the PUC and nothing in the case has been decided yet.”

In a letter filed late Tuesday with the PUC, the company said the letter contains statements that are "factually inaccurate and also inconsistent with extensive, sworn testimony and record evidence." It notes that the case has not been settled, and that the department and the utility are far apart on some issues.

"This rate case has been a really rigorous, thorough process that has extended over months and months... And right now it rests with the PUC and nothing in the case has been decided yet." - Kristin Carlson, GMP spokeswoman

Meanwhile, the department’s latest filing with regulators says GMP deserves a 5.3 percent rate increase rather than a 5.45 percent increase the company initially asked for. The department said after a proposed credit for tax savings, customers would actually see a 1 percent decrease.

However, the department’s filing also notes that the state and GMP still have “fundamental disagreements” over how to account for the Tesla PowerWall investments and various transmission and distribution projects.

Update 11/21/2018 2:55 p.m. Post updated to include the Department of Public Service's response to the Public Utility Commission's invitation to comment on the anonymous allegations.