Utility veteran tapped for key PSD position

July 3, 2003

By DARREN M. ALLEN Vermont Press Bureau

MONTPELIER — Public Service Commissioner David O’Brien on Wednesday hired an economist with strong ties to utilities — including Green Mountain Power Corp. and the owners of the Vermont Yankee nuclear power plant — as his new director of planning.

Jonathan Lesser of Williston, a senior managing economist in the South Burlington office of Chicago-based Navigant Consulting Inc., replaces longtime planning director William Steinhurst.

O’Brien ousted Steinhurst on June 13, citing a need for a new approach to electric energy regulation.

“Jonathan is someone well known in the industry. He’s well published, and he brings a fresh perspective,” O’Brien said Wednesday. “I have comfort with him and his approach.”

That approach, he said, will mean focusing less on the state’s decade-long energy conservation efforts and more on reducing Vermont ’s high energy costs.

“Over the last 10 years or so, the focus has been on how to lower the overall bill, on how to reduce demand, and conserve energy,” O’Brien said. “We have not focused enough on unit costs. And I think it is fair to question the effectiveness of a policy that puts us at a competitive disadvantage.”

High utility rates — Vermont ’s electric rates are among the highest in the country — depress economic activity and cost Vermont job growth, O’Brien said.

“I do not have a dramatic agenda in mind,” he said. “But we do need a sense of balance. If we are so noncompetitive, we can’t blame it all on the utilities.”

O’Brien said the state needs to take a “hard look” at deregulating electric utilities while searching for “ways to attack the high unit cost” of electricity in Vermont . The over-reliance on conservation efforts — efforts that have won prestigious national awards over the years — is not effective in lowering energy costs for businesses, he said.

“The utilities are not always the enemies,” O’Brien added. “We have a multi-layered relationship with utilities and, yes, sometimes we have to work together.”

Lesser, who begins July 14 and is expected to earn $85,000 a year, holds a doctorate and master’s degree in economics from the University of Washington. He served as a regulator in the now-defunct Washington State Energy Office, and he has been an economist for the Pacific Northwest Utilities Conference Committee and the Idaho Power Corp.

Before joining Navigant — a firm that offers regulatory consulting services to energy companies — Lesser was a senior economist for Green Mountain Power, the second-largest of Vermont ’s six major electric companies.

He could not be reached Wednesday for comment.

His clients at Navigant have included Entergy Nuclear, owner of the Vermont Yankee nuclear plant. Lesser testified for Entergy in Public Service Board hearings two weeks ago on whether the plant should be allowed to boost its power output.

O’Brien said Lesser would not be involved in the department’s handling of the Vermont Yankee case. He said he did not believe Lesser would have to avoid any other matters before the department and board, including those involving Green Mountain Power.

In his Vermont Yankee testimony, Lesser said boosting Vermont Yankee’s power output by 110 megawatts from its current 510 megawatts would benefit Vermont ratepayers because it would increase New England ’s regional power supply, therefore tending to drive down prices. The 110 megawatts would equal less than 0.5 percent of regional power supplies.

GMP spokeswoman Dorothy Schnure said the company would have no comment on Lesser’s appointment.

Steinhurst held the post for 17 years, and often tussled with the state’s electric utilities before the Public Service Board. He was a key utility adversary in board decisions barring Central Vermont Public Service Corp. and Green Mountain Power from passing on the full costs associated with long-term power contracts with Hydro-Quebec.

Indeed, the department’s traditional role is to represent Vermont ’s electric ratepayers before the board, which is responsible for setting rates and overseeing the performance of the state’s public utilities.

His firing earlier this month sparked the ire of Senate President Pro Tem Peter Welch, D-Windsor, who reluctantly supported O’Brien’s confirmation as commissioner and last week questioned whether that support was misplaced.

“A number of senators, myself included, had concerns about your appointment due to your inexperience in utility regulation,” Welch told O’Brien in a June 26 letter. “When the Legislature reconvenes, the Senate Finance Committee will have a great interest in hearing from you as to the ‘differences in philosophy and overall desire for new thinking’ that led you to fire one of Vermont ’s premiere public servants.”

The concern was echoed by one of the state’s chief environmental lawyers.

“It’s just another indication that the Douglas administration doesn’t care about being green,” said Mark Sinclair, senior lawyer with the Conservation Law Foundation.

O’Brien said Wednesday that changes accompanying the first new administration in over a decade would be tough for some to take. But he insisted that the ways of the past have not pulled Vermont out of the economic doldrums.

“Someone show me we’re doing the right thing, and we’ll continue,” he said. “But I know for a fact we’re not as competitive as we should be.”

The Associated Press contributed to this report.

Contact Darren Allen at darren.allen@timesargus.com