Green Mountain Power Corp. and the Vermont Department of Public Service settled the company�s pending rate case allowing rates to increase by 3.42% starting in January 2001.
As part of the settlement, Green Mountain will not ask for additional rate increases through April 2002.
�Over the past 18 months we have engaged in an extensive effort to reduce costs,� explained Christopher Dutton, CEO of Green Mountain. �GMP sold its corporate headquarters and reengineered its internal processes, leveraging technology to improve service while lowering costs. Our new organization operates with 195 employees down from 320 in June 1998.�
Green Mountain has not collected over $17 million in power supply costs related to Hydro Quebec. GMP also agreed to write off about $3.2 million in regulatory assets and will freeze its dividend at current levels until the company can replace current short-term credit facilities with long-term debt or equity financing. The company also agreed to stay its appeal to the Vermont State Supreme Court of the commissions� disallowance of the Hydro Quebec power supply costs. The appeal will be dropped when the Public Service Board approves the settlement. The settlement provides that Green Mountain won�t be subject to further prudency reviews of the Hydro Quebec contract.
Green Mountain also said it would eliminate seasonal rates as of April 2001. A customer using 500 kw-hr a month will see bills increase by $2.19/month under the settlement. The bill will be $66.22 for a customer using 500 kw-hrs/month. With the increase, Green Mountain customers will pay near the average rate for all investor owned utility customers in the state.
Vermont�s electric rates are some of the highest in the US, according to statistics from the Edison Electric Institute, a trade association in Washington. Vermont residential customers on average pay 11.5�/kw-hr. �substantially higher than the national average of 8.32�.
Shareholders of this small utility reacted favorably sending the price up 62� to close at $8.37 a share, moving the price closer to its 52-week high of $9.81/share.