SOURCE: Green Mountain Power

Green Mountain Power

Green Mountain Power

September 02, 2011 12:44 ET

CVPS and GMP File Merger Petition With Public Service Board

MONTPELIER, VT--(Marketwire - Sep 2, 2011) - Green Mountain Power Corporation (GMP) and Central Vermont Public Service (CVPS) today filed a petition with the Vermont Public Service Board (PSB) for the planned acquisition of CVPS by Gaz Métro Limited Partnership (Gaz Métro) and the merger of GMP and CVPS into one, stronger utility. Gaz Métro, GMP and CVPS announced in July the acquisition and the agreement to merge that provides significant benefits for customers, community, employees and shareholders, including a commitment to $144 million in customer savings over 10 years, a public ownership interest in VELCO, and the establishment of the Headquarters for Operations and Energy Innovation in Rutland.

"Today's filing with the PSB represents an important step in the process of combining two great Vermont companies," said Mary Powell, President and CEO of GMP and Larry Reilly, President and CEO of CVPS. "CVPS and GMP have a long history of bringing affordable, clean and reliable power to our customers. This combination is a unique opportunity that will allow us to deliver lower rates and higher quality service than if the companies continued to operate as stand-alone entities -- while maintaining the strong local bonds that set Vermont utilities apart."

The combination of CVPS and GMP will produce $144 million in customer savings over the next decade. The merger will generate permanent cost reductions and customer savings will grow to as much as $500 million over a twenty-year period. Due to the commitment to no layoffs, as well as the complexity of the integration, the full realization of annualized savings will take six years to achieve. During that time, the new combined company would share in anticipated savings while ensuring that customers receive $144 million of cumulative benefit over the first 10 years.

The agreement also includes other benefits in addition to customer savings. The new combined company will transfer 33% of the voting shares in VELCO, Vermont's transmission utility, to a new public benefit entity, which will diminish the new combined company's voting control of VELCO to less than 50%. The new public entity will provide $1 million annually -- largely generated by dividend from the VELCO stock -- to support a low-income rate program.

The Rutland region will remain part of the new utility's corporate identity, with the merged company locating its Headquarters for Operations and Energy Innovation in Rutland. There will be no layoffs, other than some executive officer positions due to the consolidation, nor mandatory relocation of employees. Additional benefits for the Rutland region include the establishment of a new downtown facility, $200,000 for regional economic development and support for the downtown, and new "Solar City" program in Rutland. Finally, the new, combined entity will build on CVPS's extensive community support efforts that are already underway.

The combined utility will also deliver even better service to customers in a number of ways. For example, a more contiguous service area will aid in storm recovery as resources can be deployed more uniformly than is possible today and crews from the separate utilities will no longer have to travel across the other company's service territory to work in a district.

The PSB will establish a schedule for the regulatory proceedings. The full petition can be downloaded at

This press release is for informational purposes only. Statements that are not historical facts are forward-looking and involve risks and uncertainties that could cause actual outcomes or results to materially differ from those expressed in this release. Readers are cautioned not to place undue reliance on these forward-looking statements and such statements speak only as of the date of this release.