GMP says no base rate increase til mid-2015

COLCHESTER, VT

Green Mountain Power has announced that its customers would not experience a base rate increase for at least two years. The announcement comes as power and operating costs continue to rise and other utilities in New England are increasing rates.

In a filing with the Vermont Public Service Board on Friday, GMP said efficiencies from the merger with Central Vermont Public Service and a continued focus on cost controls means the company can hold base rates flat for the foreseeable future.

“Faced with increases in power supply costs and normal inflation our team has worked really hard to find ways to save money for our customers,” said Mary Powell, GMP president and CEO. “As we promised in the merger, we have found substantial efficiencies operating as one company, and we are pleased our customers all across Vermont will benefit.”

In August, Green Mountain Power committed to a plan that would have capped any increase for the year beginning October 2014 at 2.5 percent, but Friday’s filing requested a decrease in base rates of 0.03 percent. The new rates include $15.5 million in savings from the merger.

“We are especially pleased that we are able to hold rates flat in an environment that is forcing many utilities in New England to ask for increases,” Powell said. “Our strategy — operating cost-effectively and obtaining long-term commitments to affordable, clean, and reliable power — is paying off. According to the most recent data available, GMP’s overall rates rank among the lowest in New England, and we are confident we can maintain the position.”

Under this proposal, GMP rates will remain flat until at least October 2015. Many other major utilities in New England, such as Maine Public Service, United Illuminating, Public Service of New Hampshire, NStar and National Grid, have recently asked to increase rates, in some cases by as much as 18 percent, according to news stories around New England. Green Mountain Power’s strategy of owned generation and long-term stable contracts protects its customers from much of the volatility of market prices.

GMP customers are currently billed each month for base rates, which represent the bulk of the monthly bills. In addition, there are separate line item charges for energy efficiency programs and an energy assistance program required by the state. Under alternative regulation, charges for significant storms and variations in power supply costs are not included in base rates, but, if approved by the Public Service Board, appear as line items. In the first quarter of 2014, the power supply adjustor will be a credit on customer bills that essentially offsets the storm charge. It is important to note that the power supply adjustment has been a net credit for GMP customers since it began in 2007.

Vermont remains the only state in the northeast where utilities remain solely responsible for procuring power in the marketplace. To date, remaining as an integrated regulated utility has sheltered Vermont customers from volatility in the wholesale energy markets.