It might seem like a state agency called the Department of Public Service would have a fairly clear mandate to serve the public. But after years of debate about the department’s priorities, lawmakers, the public, and even the department itself are trying to determine if it does a good job representing everyday Vermonters.
“In general – I won’t summarize percentages – but I’ll say there are a lot of people that are unhappy with us at the moment,” Recchia said in testimony before the Senate Finance Committee Thursday.
The department is charged with representing the public interest with utilities like Green Mountain Power, Vermont Gas, Comcast or Verizon. Critics say the department has all but abandoned that mission and instead represents the interests of the governor or the utilities they’re supposed to keep a critical eye on.
Carl Scott, who retired from Green Mountain Power in 2014 after years of dealing with the state’s regulatory system, also testified Thursday.
“The department is designed by statute to be the competition … for the regulated monopoly. Good competition yields razor-thin margins while producing a superior quality product,” he said.
With something like pizza, competition takes care of itself – people don’t tend to choose bad pizza that’s expensive, they eat something else, or find better value from another pizzeria. That forces pizza sellers to strive to make tastier pizza at a lower cost. Because utility customers usually have only one utility to choose from, the department was designed – in effect – to make sure the pizza is good and reasonably priced, even if it’s from the only pizzeria in town.
Scott says that’s not happening.
“Sadly, in my opinion the structure at the department has evolved into a regulatory organization that paves the way for easy corporate profits at the expense of the average ratepayer,” Scott said.
He wasn’t the only insider to testify that the department isn’t serving Vermonters well.
“The current [regulatory] situation, I believe, is kind of a perfect storm,” said Richard Saudek, who was the first ever commissioner of the Department of Public Service.
Saudek told lawmakers they’ve contributed to that storm with multiple mandates on renewable energy goals, ratepayer costs, local development rules and public input.
“Combine that with strong-willed governors with agendas relating directly to development as it relates to energy and communications,” Saudek said. Plus, he said, documents have shown the governor’s office sometimes coordinates directly with utilities.
The former commissioner said utilities and the investors behind them don’t necessarily have the state’s best interests in mind.
“They sit there and they look at the world and they say ‘Where can we make some money on an energy investment?’ and, son of a gun, little old Vermont comes right up,” he said.
In some other states, the agency implementing energy policies set by the governor and legislature is separate from a public or ratepayer advocacy office tasked with making sure customers get a fair deal.
Recchia says his department’s ability to take the state’s policy priorities and combine them with the interests of everyday Vermonters actually makes things better. He says that’s because the department considers more than just the economic cost of utility service.
He uses the example of cheap power from burning coal.
“A ratepayer advocate would say ‘Would you go get me some of that four-cent-a-kilowatt energy?’ because it’s cheaper,” Recchia told lawmakers. “And what I would say is as a public advocate: ‘Well, we have chosen to go a different way. I will get you the lowest possible rates I can in the context of the policies we’re trying to achieve.'”
Basically, Recchia says the department does the job it was given, and does it well. If lawmakers think someone needs to be sticking up exclusively for the interests of utility customers, Recchia said, that would require a change in state law.
“What’s come out of this is: If that’s the model that people feel like they want – that they want true, pure ratepayer advocacy – then that’s a different model than what we have,” Recchia said.
With that information in mind, lawmakers now have to decide if they want to keep the current system or overhaul the structure of the department.
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