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New Report: How Utility Regulation in VT Benefits Stockholders at the Expense of Ratepayers

Utility regulation in Vermont can be a very complicated process and one that most citizens do not fully understand. AARP Vermont is working hard to shed  light on some of the problems with the current approach to regulating electric and natural gas utility companies -- especially as it relates to the rates you pay. A new, independent report just released by AARP Vermont (attached below) shows how Vermont Gas Systems (VGS) has been operating under what is known as an alternative regulation plan created about 10 years ago. While the goal of this form of ratemaking regulation was to best serve Vermont consumers and ratepayers, the actual experience over the past decade has been just the opposite!

The attached report outlines how alternative regulation has not delivered on promised ratepayer benefits for Vermonters, and in fact, has led to ratepayers generally paying more than customers of other New England gas utilities. The analysis goes further to detail how alternative regulation has facilitated an expensive pipeline project that is being directly subsidized by current ratepayers, while VGS shareholders reap profits of approximately $10.5 million.

The report and analysis was produced by the Acadian Consulting Group, nationally recognized experts in the field of energy industry research and analysis -- including utility regulation, accounting and economic impacts. Collectively, Acadian has participated in over 300 regulatory proceedings in at least 27 different states, as well as abroad. These engagements include work performed for state and federal agencies, as well as both public and private companies.

The report is also being sent to the Vermont regulators as they analyze current VGS rate proposals and as the Public Service Board considers the renewing the VGS Alternative Regulation Plan. We hope it helps to clarify the need to revisit this form of regulation in favor of a more transparent and fair approach.

Alt Reg-VGS report 8-16

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