Editor’s note: This op-ed is by Jim Rademacher of Pittsford.
On March 20 the Public Service Board held a public hearing via VT Interactive TV concerning a request for a rate modification by Green Mountain Power. As the only member of the public to provide input at the hearing, I presented my commentary expecting “Trust and Competency” from our regulated public utilities as previously published in VTDigger. I emphasized the need for the PSB to demand the same. Mr. John Greenberg responded to my commentary in VTDigger stating:
“Mr. Rademacher raises a series of interesting questions here. If he hasn’t presented them to the Department of Public Service (DPS), he should. DPS is the ratepayers’ advocate in all utility rate cases and if there is any basis for these allegations (and for some, there clearly is), they should be raising them in the next rate case.”
Mr. Greenberg is absolutely correct. The DPS needs to demand trust and competency of regulated public utilities. The Public Service Board needs to know the law and regulations, review pertinent information and make a reasoned decision. It is the DPS’s responsibility to make sure the information provided by an applicant is accurate or at least reasonable. In the GMP Lowell Mountain certificate of public good (CPG) process the DPS failed in that responsibility. It should be remembered that the information provided by an applicant is sworn to be true and accurate.
• GMP represented no need for a synchronous condenser; now one is needed at $10 million.
• GMP represented a CF of 35 percent; turns out to be 20 percent.
• GMP represented 700 full-time-equivalent job years; probably more like 200.
• GMP represented 30 full-time permanent jobs of which 15 would be local; more like one and five. (Unless one counts all the lawyers paid to put up legal hurdles against innocent victims of this project.)
• A competent utility would have known a synchronous condenser was needed as VELCO and ISO-NE tried to tell them.
• A competent utility would have known the CF could not approach 35 percent.
• A competent utility would have known that 700 construction period jobs was way out of line.
• A competent utility would have known 30 permanent jobs was way out of line.
A competent DPS, with a reasonable and expected investigation, should have known the same and should have made such known to the PSB. The DPS did neither. That is not the level of trust and competency the public rightfully expects of the DPS.
Going forward it is this type of due diligence the DPS must do on all future CPG applications to reasonably assure the claims provided by the applicant can reasonably be expected to be realized.
Section 248 requires that a regulated project have a net economic benefit to the state. A competent DPS should have represented to the PSB that a $10 million condenser was needed, that 500 fewer installation related jobs was likely ($20 million salary and benefits lost), and 20+ fewer permanent jobs over the 25 years of the project was likely (another $20 million lost).
This $50 million swing may well have tipped the balance on this project from a net benefit to a net negative. A denial of the CPG application would then have been required. And this comes before taking into account that the CF is 20 percent instead of the promised 35 percent. That is an overall electricity output of 42.8 percent less than GMP promised [(35-20)/35 x 100%]. The project generates almost one-half the good it was supposed to.
The DPS needs to do a retrospective review of the predictions that GMP provided as part of the certificate application to determine eventual accuracy. A competent engineering department should not have been so far off. Was it really GMP engineering or was it really GMP bureaucrats cooking the numbers so that the financial analysis was favorable as required?
The public expects a competent DPS to protect us. The DPS needs to step up its game. The DPS needs to demand trust and competency from all regulated public utilities. Currently it is questionable whether the DPS and regulated public utilities are meeting expectations.
