A little bit lower now

Per the Jan. 10 agreement, Stowe Electric will also refund all its customers for that 3.5 percent difference dating back to July 8, 2013, the date the investigation was launched. The rate reduction will save customers a cumulative $400,000 a year, general manager Ellen Burt said, adding the one-time refund will give back a total of $125,000 to customers.

The Public Service Board (PSB) still has to sign off on the Jan. 10 agreement, but Burt said she is confident it will. Both she and the Department of Public Service’s special counsel signed the agreement. The PSB is the department’s regulatory arm.

“This is very exciting for us, because we’re closing this rate investigation in a very positive way,” Burt said.

The Jan. 10 memorandum of understanding says: “The rate reduction results in just and reasonable rates for (Stowe Electric Department).”

The reduction will not go into effect until a couple of billing cycles after the PSB closes its investigation, and the refunds will go out to customers in the spring, according to Burt.

The agreement also stipulates that Stowe Electric hire a management consultant to perform a business process review, an assessment of the utility’s processes, aimed at determining how efficiently the utility is being run. Stowe Electric Commissioner Dick Marron said the utility already appears to “run pretty efficiently, seeing the revenue we have coming in.”

Marron said Stowe Electric could benefit from having someone in-house dedicated to regulatory matters and who could be in constant contact with the Department of Public Service.

Stowe Mountain Resort was the lone intervener to the investigation, which gave the corporation access to all the information Stowe Electric received. The resort will receive the same reduction and refunds as every other Stowe Electric customer, but its snowmaking sector will not see any rate changes.

Burt said the resort uses a separate “load-following” contract for its snowmaking, so it does not suck up excess power Stowe Electric purchases off the grid.

Representatives from Stowe Mountain Resort did not respond to requests for comment.

‘Just and reasonable’

The PSB investigation into Stowe Electric’s rates started last year, as the Department of Public Service was finishing up an investigation into whether the utility had acted wrongfully by using some bond money meant for a transmission project to pay down a line of credit. To make amends for that violation, Stowe Electric spent roughly $25,000 on a pair of electric car chargers in lieu of paying a fine.

The Department of Public Service “raised concerns that Stowe’s projected revenues for 2013 appear to indicate that Stowe’s rates may be excessive and recommended that the (PSB) open an investigation into the justness and reasonableness of Stowe’s existing rates without delay.”

Burt said it is not surprising that Stowe Electric was showing higher-than-expected revenues, thanks to numerous “efficiencies” the utility has enacted over the years. Those include installing smart meters and making better decisions about when and from whom it buys power.

The utility had originally sought to block or delay the investigation because it intended to redesign its rate structure in early 2014, which would necessitate going to the PSB for rate approval anyway. Now, with the investigation out of the way, the commissioners and Burt plan to get started soon on that rate structure overhaul, using the lower rates as the new ground floor for the redesign.

The utility set the current rates in 2010, but Burt said it’s been roughly 30 years since it has done a complete restructuring.

Both Marron and Burt said they don’t see the outcome of the investigation as a punishment levied on Stowe Electric, because it is a nonprofit entity.

Said Marron, “We’re satisfied, and I suspect the ratepayers will be happy, too.”