MONTPELIER, Vt. (AP) -- State regulators cleared the way Friday for the state's two largest power companies to merge, and Green Mountain Power said its parent company likely would close on the purchase of Central Vermont Public Service Corp. later this month.
The proposed merger "represents an historic opportunity to achieve significant, immediate and enduring benefits for all retail customers" of both utilities, the Public Service Board said in its 169-page order approving the deal.
Among the benefits would be efficiencies resulting in $144 million in savings to ratepayers during the next 10 years, with greater savings after that, as well as improved grid reliability and storm response through combining the companies' repair dispatch systems, GMP said in a statement.
"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," Mary Powell, GMP's president and CEO, said in a statement.
Under the deal, GMP, which is owned by Montreal-based energy firm Gaz Metro, takes control of Rutland-based CVPS in a stock sale that was valued at $472.4 million when it was announced last July.
Gov. Peter Shumlin called the deal "great news for Vermont ratepayers." Shumlin praised a provision in the deal designed to address criticism that the merger would end up with a Canadian company controlling the Vermont Electric Power Co., better known as VELCO, which manages Vermont's high-voltage transmission system. VELCO has been owned proportionately by Vermont's utilities, with CVPS and GMP combined holding a controlling interest.
Some lawmakers had expressed concern that if Gaz Metro got control of VELCO, Vermont's high-voltage backbone would become a conduit for power sales from energy-rich Quebec to the population centers of southern New England and New York, with Vermont consumers' needs taking a back seat.
The merger deal calls for a specially created public trust to own 38 percent of the stock in VELCO. Vermont's smaller municipal and cooperative utilities own 16 percent, meaning that together, the public and nonprofit entities will control 54 percent of VELCO stock.
Commissioner Elizabeth Miller of the Department of Public Service, which represents consumers before the quasi-judicial board and negotiated an agreement with the company included the provisions on VELCO, said the trust, municipal and cooperative utilities also would have a larger presence on the VELCO board.
Shumlin said the provision will "ensure that the public interest will be represented in the oversight of our state transmission system."
The deal was panned by the consumer group AARP, which had raised an alarm — and received attention during the now completed legislative session — over a payback provision for extra money CVPS customers were ordered to pay the company a decade ago to pull it back from the brink of bankruptcy.
AARP wanted to see the $21 million rebated to ratepayers, but the board approved GMP's plan that the money would be invested instead in energy efficiency, with much of it going to a program that works to make homes more weather-tight, saving consumers money on heat. That plan also was supported by the department.
Some lawmakers tried and ultimately failed to pass legislation directing the Public Service Board to reject the company's proposal to use the $21 million for weatherization and order that the money go back to ratepayers instead.
Dissension continued among lawmakers. Sen. Vincent Illuzzi, R-Essex-Orleans and a candidate for state auditor, called the board's order "a crushing defeat for the public in general," citing the $21 million, which he said ratepayers "will never get back."
AARP State Director Greg Marchildon criticized the board's decision.
"Today was a great day for Gaz Metro and CVPS shareholders and a lousy day for the ratepayers that bailed CVPS out when it was in financial crisis," Marchildon said.
AARP also has complained that savings generated through utility mergers in other states have been divided more in ratepayers' favor than was the case with the proposal approved by regulators on Friday.
Miller said the Public Service Board had carefully considered AARP's concerns in a "very detailed and thorough investigation" and rejected its arguments.