Sugarbush, GMP Accused of Billing Violations

Author: Megan O'Keefe

Green Mountain Power (GMP) Corp., Vermont's second largest power company, gave unauthorized rate reductions totaling more than $545,000 to Sugarbush ski resort for 14 months in 1999 and 2000.
This violation, reported in documents filed by Vermont's Public Service Board on Oct. 31, is the newest in a long series of abuses committed by 14 of Vermont's utility companies.
A two-year investigation by the Department of Public Service uncovered 88 instances in which utility companies failed to abide by state rules governing special utility contracts.
These corporations repeatedly granted price and rate reductions to special utility contract customers without seeking the necessary approval from state regulators. GMP has admitted to committing nine violations.
Public Service Board Chairman Michael Dworkin expressed concern that rate reductions totalling almost $6.7 million were given to certain customers and compensated for through increased rates and charges to other customers.
Dorothy Schnure, a spokeswoman for GMP, maintained that unauthorized rate reductions granted to Sugarbush were the result of "an administrative oversight."
According to Schnure, violations occurred from May to November 1999 and again during the same months in 2000 due to a failure to terminate utility agreements between GMP and Sugarbush that were valid only during snowmaking season.
Originally, state regulators encouraged GMP and Sugarbush to devise a special contract that would provide the ski resort with reduced rates in return for agreeing to "make snow during off-peak times," said Schnure. A violation of state regulation occurred only when an administrative error resulted in the continuation of reduced rates beyond the period specified within the snowmaking contracts, Schnure continued.
Contrary to Dworkin's concerns, GMP maintained that such a contract saves money and "lowers costs for all of our customers." An arrangement like the one between GMP and Sugarbush, by limiting the use of power during peak hours, reduced the need to build new power plants and buy power at times of peak demand, Dworkin claimed.
As a result, costs remain low for all ratepayers. Despite accusations, GMP is adamant that the contracts were developed for "the public good."
"We were wrong, there's no question. We should have done all the approval. They were contracts that benefited our customers because it keeps our peak loads down, and benefited customers across the state because it keeps peak loads down," Schnure said.
The fact that the Department of Public Service is seeking only $79,000 in fines against GMP out of a possible $1.7 million seems to affirm the corporation's stance.
William Steinhurst, director of the Department of Public Service, agreed that special contracts can be beneficial and called the violations inadvertently administrative in nature.
He did warn that violations of state regulation by utilities companies would be punished more severely in the future.