Electric utilities laud exceptional earnings

Burlington Free Press, May 16, 2003

By Sue Robinson
Free Press Staff Writer

COLCHESTER -- The state's two largest electric utilities patted themselves on the back at their annual meetings for stellar earnings in 2002, and promised more cost cutting in the next year.

Central Vermont Public Service pledged last week it would continue to freeze electric rates for its 143,000 customers for another four years. Green Mountain Power Corp. declined to go that far in its meeting Thursday, but did say it would probably not need to raise rates through 2004 for its 88,000 customers.

Gov. Jim Douglas spoke at both meetings, criticizing the state's electric rates, which are 35 percent higher than the national average, but praising the companies' financial solvency.

"This is the end of a very rough road that this and other electric utilities have trod over the last few years," Douglas said at the GMP meeting. "Now we've got to find ways to reduce our electric costs if we are going to remain competitive."

Both utilities last received rate increases in 2001: CVPS got 3.9 percent; GMP, 3.4 percent. At the time, the companies told state regulators that the increases were crucial to their financial well-being.

Much has changed, in part because of the rate increases and in part because of massive restructuring at both utilities that included staff reductions. Both companies shaved millions of dollars in operating costs.

In 2002, CVPS reported $19.8 million in net earnings, or $1.56 per share, compared to $2.4 million, or 6 cents per share, in 2001. Its stock price began 2002 at $16.70 per share and closed Thursday at $18.21, up 11 cents.

GMP reported $11.4 million in net earnings, or $1.98 per share, compared to $10.7 million, or $1.85 per share, the year before. Its stock started 2002 at $18.65 per share, and closed Thursday at $21.17, down 13 cents.

Company executives said the cost cutting is not over. For example, GMP CEO and President Chris Dutton suggested the state's utilities consolidate their service areas through asset swapping or shared maintenance contracts.

In addition, the utilities completed the sale of the nuclear plant, Vermont Yankee, a move expected to save customers more than $80 million over the next decade.

"What they have done over the past few years is outstanding. We would like to see them continue what they are doing," said Tim Shea, vice president of the Lake Champlain Chamber of Commerce.
Contact Sue Robinson at 660-1852 or srobinso@bfp.burlingtonfreepress .com