COLCHESTER, VT--(Marketwired - Dec 20, 2013) - Green Mountain Power today 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 today, GMP said efficiencies from the merger with Central Vermont Public Service and a continued focus on cost controls means the company can hold base rate flats 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."
"Associated Industries of Vermont is very appreciative of GMP's sincere efforts and intention to keep base rates flat for two years," said AIV President Sandra Dragon. "It is important to do everything we can to control and reduce electricity costs in Vermont, and we look forward to working closely with GMP in the coming months to find other opportunities to lower costs."
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 today'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%, 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.
Future rate changes will continue to benefit from the guaranteed $144 million in savings Green Mountain Power promised in the first 10 years of the merger. Customers' guaranteed savings have amounted to $15.5 million in the first three years following the merger, and the Company's focus on operating efficiencies has saved customers millions more.
Today's filing is the beginning of a traditional rate case GMP agreed to file as part of the merger, and that by statute takes 8.5 months before the Public Service Board. GMP today also filed an update to its alternative regulation plan that extends the plan for another four years, beginning October 1, 2014. GMP has been operating under alternative regulation since 2007.
About Green Mountain Power
Green Mountain Power (www.greenmountainpower.com), the Solar Electric Power Association's 2013 Utility of the Year, generates, transmits, distributes and sells electricity in the state of Vermont. The company, which serves more than 250,000 customers, has set its vision to be the best small company in America.