Public service chief rebuts claim that department fails ratepayers
Public Service Commissioner Chris Recchia went before the Senate Finance Committee on Tuesday to defend his department against complaints by an advocacy group that says it fails to effectively champion the interests of the public.
The committee is considering whether to propose language modifying the department's public advocacy function.
The department hews to its statutory obligations, Recchia told senators, and in doing so represents Vermonters' interests.
His remarks came in the wake of a report from the group AARP that said his department "fails repeatedly to take positions that are consistent with ratepayer interests."
Recchia pointed to the state's low power costs, stable rates and steady advancement toward renewable energy goals as evidence that his department is an effective advocate for consumers.
The AARP Vermont report also criticized the department for appearing to take its cues from the governor, rather than everyday Vermonters, and for failing to pursue "fuel-neutral" energy goals.
The public service commissioner is appointed by the governor and confirmed by the Senate.
The governor's office is but one of many entities the department looks to as it carries out its mission, Recchia said.
"We have an elected government official in the governor, who's elected every two years to represent the people of Vermont, and that's an important voice," Recchia said after the committee meeting. "It'll come as no surprise that this governor is extremely passionate about energy issues, and he has a right to be, because energy is an important part of Vermont's future."
He said the Department of Public Service also takes guidance from the Legislature's directives and statutes, the people of Vermont, Public Service Board precedent and past department positions.
"All of that leads to our conclusions of what we believe is in the best interests of the people of Vermont," he said.
AARP has litigated against the Department of Public Service, most prominently in a case involving a natural gas pipeline in Addison County that both the department and the governor support.
AARP and other intervenors failed in their attempt in that case to persuade the Public Service Board to re-evaluate a public good certificate for the pipeline.
AARP's Vermont State Director Greg Marchildon said this incident illustrated a pattern of permissiveness afforded state utilities at the expense of Vermont's ratepayers.
"If you look over the last number of years, the department is not just siding with GMP and [Vermont Gas Systems] but there's little evidence they ever aggressively work to oppose anything the state's utilities put forward," Marchildon said.
The fact that AARP and the department came to different conclusions in that instance doesn't necessarily indicate flaws within the department's public advocacy function, Recchia said.
"Where's the problem? Because they don't like the position we've taken on a particular case," Recchia said, "they want to restructure the whole thing?"
As for AARP's recommendation of fuel neutrality in the department's consideration of public good, Recchia said he lacks authority to carry that out.
The AARP report advocates fuel neutrality in pursuit of the lowest possible energy pricing, Recchia said. This approach doesn't follow state goals established in favor of renewable energy and efficiency measures, he said.
"That's not what the Legislature directed us to do," he said. "That's not the law."
"Our statutory obligation is to get consumers the least-cost energy we can, in the context of state policies we have for efficiency and renewable energy," he said.
AARP's accusations came in the form of a sharply worded critique that a consultant wrote for the organization, responding to a recent report from the department on its ratepayer advocacy structure.
The AARP report calls on the Legislature to remove the department's ratepayer advocacy function and create a new ratepayer advocate position outside the department's purview.
Recchia said he "vigorously" protested the notion that his department doesn't achieve excellent results with its current structure and said the insinuation of undue outside influence has harmed the morale of staffers. He said AARP could provide no evidence that any other public advocacy structure could produce better results.
Though Marchildon didn't take issue with the oft-cited assertion that Vermont enjoys the second-lowest electric rates in New England, he said that as a result of the state's lax public advocacy in the department, rates would likely rise sometime in the future.
Vermont could easily fix the situation by removing the ratepayer advocacy function from the Department and giving it greater independence from the administration's energy goals, Marchildon said.
"We don't think that whatever the report shows, or what we believe the state needs to do, is revolutionary," he said. Rather, by freeing ratepayer advocacy from the Department, Vermont would be eliminating a conflict of interest and doing what is common among the remaining states in the Union, he said.
Some senators said Recchia's testimony sounded convincing but they're open to structural changes in the department's public advocacy function.
"I feel pretty much persuaded by what Mr. Recchia said," said Finance Committee member Claire Ayer, D-Addison. "But it might not be a bad idea to have the public advocate seated in another department."
Ayer said the Legislature established the current structure and it's lawmakers' responsibility to revise that structure if it's not working. Sometimes arrangements created by the Legislature outlive their usefulness, she said.
Sen. Kevin Mullin, R-Rutland, said he's still uncertain whether ratepayers are getting the best price they possibly can. Some instances appear to show utilities and their shareholders profiting to a greater degree than ratepayers, as the result of Public Service Department decisions, Mullin said.
Much remains to be answered before writing legislation to address any problems the committee discovers, Mullin said.
"We're still in fact-finding mode, to try to determine whether we have a system that works properly to protect Vermonters," he said.
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