October 18, 2009, the Burlington Free Press, by Nancy Remsen

FAIRLEE -- Four of the five prospective Democratic candidates for governor came to the Lake Morey Resort on Saturday to court delegates representing the 9,500-members of the Vermont AFL-CIO -- even though the primary and general elections are months away.

The delegates didn't mind. Unions want to hear from potential candidates early, said Jill Charbonneau of Middlebury, Vermont AFL-CIO executive vice president. "We want to have our voice shape their campaigns."

As a result, the 53rd convention for this association of unions featured a parade of politicians including four Democratic gubernatorial aspirants -- Former Sen. Matt Dunne, Sen. Doug Racine, Sen. Peter Shumlin and Secretary of State Deb Markowitz. Sen. Susan Bartlett, who has launched a gubernatorial campaign, too, was scheduled to appear but canceled because of illness.

The union group also heard words of advice from Progressive Anthony Pollina, the gubernatorial candidate the AFL-CIO endorsed in the 2008 election. He said he has yet to decide whether he will run for statewide office in 2010, but he had plenty to say about how labor ought to measure the candidates seeking their votes, money and campaign support.

"How popular you all are going to be in the next few months because you have power," Pollina told the 50 delegates at the convention. Looking to the back of the room where a couple of the Democratic rivals stood, Pollina said, "They want your credibility. They want you to empower them."

"Don't give away that power too quickly," Pollina said. He suggested waiting until after the Legislature adjourns, noting that three of the five serve in the Senate. "See what these people are able to do."

Pollina suggested the AFL-CIO could make some demands now. For example, he said one litmus test would be to see what happens to S.88, a bill to create a single-payer health system in Vermont. The bill received no consideration last winter even though half the Senate has signed on as sponsors.

"That bill should have passed yesterday," Pollina said. He noted that two senators running for governor aren't sponsors of S.88 -- Racine and Bartlett.

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October 17, 2009, the Burlington Free Press, by Terri Hallenbeck

Burlington Mayor Bob Kiss lashed back Friday at accusations about use of city money to pay for Burlington Telecom, saying the utility is sound and that state officials have known what the city was doing for months.

Kiss called statements leveled a day earlier by state Public Service Commissioner David O’Brien “inaccurate, inflammatory and totally inappropriate.”

City officials are under fire for using $17 million from city coffers to cover operating expenses for the city-owned utility for the past two years, a move that violates Burlington Telecom’s license to operate.

The use of city funds to shore up the Internet, telephone and television service has raised ire among a number of people in Burlington and in Montpelier, prompting city officials to scurry for explanations.

City officials have scheduled two public meetings on the issue for next week — one to update the City Council on Tuesday and another to hear from Burlington residents Thursday.

Kiss and other city officials spent part of Friday seeking to refute statements O’Brien made to The Burlington Free Press this week, calling the city’s funding practices a violation of law.

Kiss argued Friday that the city’s lawyer told the Public Service Department’s lawyer that Burlington was using city money to fill a funding gap at Burlington Telecom in November. It should have been clear that that had been going on for several months, meaning it went beyond the 60 days Burlington Telecom’s license allowed, city Chief Administrative Officer Jonathan Leopold said.

City officials again discussed the issue with the Public Service Department in April, suggesting they needed to amend the condition that limited city funding to 60 days, but the department recommended putting that issue on hold, Kiss said.

O’Brien said Friday he became aware that Burlington Telecom owed the city millions of dollars within the past month.

O’Brien said he could find no record of the November meeting. At the April meeting, he said, his department asked how much the city was lending Burlington Telecom, and the city answered by asking whether the department wanted the city to seek relief from the 60-day limit.

“They borrowed $17 million, and they weren’t supposed to,” OBrien said. “They’re shooting the messenger.”

Leopold said O’Brien’s statements run the risk of undermining confidence in Burlington Telecom, which is unwarranted. “I believe Burlington Telecom is worth considerably more than the debt,” he said.

Possible consequences

O’Brien said his department will investigate the city’s actions further and make recommendations to the Public Service Board, which will decide whether to grant the city’s request to amend the 60-day limit.

City officials acknowledge they should have alerted the board of the 60-day-limit violation before they did Sept. 30. Kiss said the city is arguing to the board that a 60-day limit is unreasonable.

“The 60-day requirement has never really worked,” he said. “Money doesn’t move in 60 days.”

It will be up to the three-person quasi-judicial Public Service Board to decide what, if any, consequences the city faces for violating that condition. Among the possibilities are fines, new conditions imposed on Burlington Telecom’s license or, the most extreme, revocation of the license.

“Sometimes some operations can’t be saved,” O’Brien said Friday, but he added, “We don’t really like to get into the business of revoking licenses to operate.”

'Great deal of concern'

O’Brien said he sent letters to the state auditor and attorney general to alert them to the Burlington Telecom situation. Auditor Tom Salmon already had told city officials he’s planning to investigate.

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October 14, 2009, the Vermont Business Magazine, by Kevin Kelley

The “public option” has emerged as a topic of debate in Vermont – not (yet?) in regard to health insurance, perhaps, but in the telecommunications industry.

A publicly owned telecom utility has been operating in Burlington for the past three years, and several towns around the state, grouped into consortiums, are moving to establish similar entities that would offer telephone, cable television and Internet services to their residents and businesses. FairPoint, Comcast and other private telecom companies don't like having to compete with these government-supported enterprises – for many of the same reasons that private insurers are fighting to prevent Congress from creating a public alternative in the health-care sector.

But a big private provider such as Comcast does have the financial firepower to outgun a small municipally-owned competitor such as Burlington Telecom (BT). And that threat has led BT to try to keep sensitive information secret – a stance that, in turn, has ignited controversy over a public entity's obligations to disclose financial data to the public.

Absent full disclosure, concern has grown in regard to BT's stability. Worries about its ability to manage a heavy debt load and to achieve profitability have rippled beyond Burlington's borders as a result of news reports that have raised questions about BT's financial health.

Some residents of eastern Chittenden County, for example, have used doubts about BT's status as a basis for opposing a public telecom option in their area, says John Doty, a telecom specialist in Westford who favors building such a system. He likens the push to develop citizen-controlled telecom utilities in rural Vermont to the establishment 75 years ago. Back then, co-ops brought electricity to places that private utilities had left unserved because sparse populations made infrastructure buildouts appear cost-ineffective.

Even after Comcast and FairPoint complete their own state-mandated buildouts in his area, Doty notes, “There will still be holes that will leave some people without access to a good network.” It would also be “nice to have a choice of providers,” Doty adds.

Ideological arguments like those heard in the national health care debate are being made by opponents of government-funded telecom operations. Such perspectives were presented in a Wall Street Journal article in March on efforts in eastern and central Vermont to establish a public telecom network with federal stimulus money.

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October 13, 2009, the Burlington Free Press, by Mayor Bob Kiss

Burlington Telecom (BT) provides high-quality, affordable, state-of-the-art telecommunication services to Burlington's residences, businesses and government. It promises to be even more successful as it looks to expand these services throughout the city, the region, the state and beyond.

Before BT, Burlington residents complained of poor service and frequent price increases. Like numerous Vermont communities today, many households in Burlington either lacked telecom services entirely or were seriously under served. City officials and the people of Burlington decided that a municipally owned and operated alternative telecommunications company could resolve these problems.

Private telecom companies saw this effort as a threat to their domination and control of the industry. National companies doing business in Vermont tried to persuade the Legislature to deny Burlington the right to provide telecom services.

While the industry was unsuccessful in its efforts to stop BT, the Legislature did place significant restrictions on Burlington's ability to finance this new initiative, including the requirement of "competitive neutrality." This meant the city could not use traditional municipal credit sources such as general obligation bonds to build BT. In contrast, just a generation ago, the state allowed municipalities to use these same credit sources to bring electricity to all Vermonters.

The industry may have thought it had thwarted the development of a publicly owned competitor. But, Burlington built a telecom system that is technically superior to anything the private industry provides in Vermont. To this day, BT is the only telecom system in Vermont that provides the highest quality, state-of-the-art internet, telephone and video services by using fiber to the home.

The city financed BT construction and start up through a lease purchase agreement with two investment companies. The city paid BT expenses out of the city's "pooled cash" account, then received reimbursement for these expenses from BT revenues and the lease purchase financing. The pooled cash account functions as a master checking account for all the different funds and departments of the city.

In January 2008, Jonathan Leopold, chief administrative officer, reported to the Board of Finance that the city would need additional financing to complete the build-out of BT and to sustain BT through start up. The board authorized him to work with the city's financial advisers to obtain this financing. In the meantime, BT used pooled cash to cover expenses that exceeded its revenues.
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Just as the city began to pursue additional financing, this country faced the worst financial crisis since the great depression. New lease purchase financing was not available and in August 2008 the city temporarily suspended its efforts to refinance BT.

The city continued to use pooled cash to pay telecom system expenses. The alternatives were to stop the build-out, stop hooking up new customers or shut down BT. None of these were acceptable, and the first two options would have violated the Certificate of Public Good. This use of pooled cash was essential.

However, using pooled cash for more than 60 days requires approval of the Public Service Board. The city has petitioned the board for this approval because it is the best way to preserve what Burlington residents want: a strong, state-of-the-art system that provides competition to a private industry that has under-served and over-charged Burlington residents for decades. And now, as the economy recovers, BT will pursue financing based on an updated business plan that promises completion of the build-out in Burlington with expansion beyond the city.

We must continue to support BT. The City Council and the Board of Finance will continue to participate in making decisions about BT's future. Together, we will protect the city's financial security and preserve the strong credit rating it has maintained over many years.

BT provides a public service that is as essential to the economic prosperity of our city and state in this century as the interstate highway system was in the last century. We must keep moving forward.

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October 10, 2009, the Burlington Free Press, by John Curran

MONTPELIER -- A plan by the owners of Vermont Yankee to sell the nuclear plant to a spinoff company has been approved by the Vermont Department of Public Service, which originally opposed it but reconsidered after eliciting new guarantees from the company.
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The state Public Service Board still must sign off on the deal, as must regulators in the state of New York.

The U.S. Nuclear Regulatory Commission has already endorsed the plan by Entergy Corp. to form a company called Enexus Energy Corp. that would operate Vermont Yankee and five other nuclear power plants now owned by New Orleans-based Entergy.

In an eight-page "memorandum of understanding" filed Thursday, the state said Entergy's addition of a provision guaranteeing Vermont Yankee's access to $100 million in revolving credit from Enexus alleviated concerns that the plant wouldn't have the financial wherewithal to safely operate it under the new owners.

The deal also calls for Enexus to have access to a $60 million line of credit and requires the spinoff company to take out an additional $50 million line of credit if its credit rating drops under investment grade.

"We believe that the structure, as proposed, is better than what we have right now," said Stephen Wark, a spokesman for the Department of Public Service. "What this does is makes Enexus fully responsible.

"The other advantage to it is that it provides much lower debt than they had previously proposed, and several significant options for lines of credit and funds to resolve the reliability and/or safety issues. We think it's a better structure that will result in better management of the plant," he said.

Entergy Corp. spokesman Michael Burns said the reworked deal came in response to Vermont's concerns.

"It's another hurdle that's been cleared," Burns said. "The commitments we made in the memorandum were made in an effort to respond to issues raised in the approval process in Vermont. We believe the memorandum of understanding forms the basis for gaining the Public Service Board's support for the transaction."

No date has been set for a vote by the Public Service Board, a quasi-judicial body that is separate from the Department of Public Service.

Not all are cheering the state's endorsement of the deal.
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Paul Burns, executive director of the Vermont Public Interest Research Group, which wants Vermont Yankee shut down, said the guarantees offered by Entergy are inadequate.

"There's a significant risk to Vermont rate payers if the new owners of the nuclear plant are highly leveraged and lacking in sufficient resources."

[Full Story]

October 10, 2009, the Brattleboro Reformer, by Bob Audette

BRATTLEBORO -- The 2010 legislative session is coming fast and one of the biggest items on the Legislature’s plate is whether Vermont Yankee nuclear power plant in Vernon should receive permission to continue operation past its original license expiration date of 2012.

Entergy, which owns and operates Yankee, has applied to the Nuclear Regulatory Commission to extend the operating license of Yankee for another 20 years, from 2012 to 2032. In addition to NRC approval, Entergy must also receive a certificate of public good from the Public Service Board and the OK from the Legislature.

In considering whether the Legislature should give its stamp of approval to continued operation, its members must consider a number of different factors.

Those include whether the plant can operate reliably for another 20 years, whether financial agreements with the state’s utilities benefit Vermont taxpayers and whether the decommissioning fund is adequate to return the site to a greenfield following shutdown.

But one of the biggest factors the Legislature needs to consider is the economic impact of shuttering the plant on Vernon and the rest of the state.

"We are looking at this because this will happen, whether it’s in two years or 22 years," said Rep. Alison Clarkson, D-Woodstock/Reading, a member of the House Ways and Means Committee.

The chairman of the committee, Michael Obuchowski, D-Rockingham, appointed Clarkson to conduct an
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economic impact study.

"We initiated this conversation with the intention of doing the best we can to protect the interests of Vernon resident as well as the rest of Vermont," said Obuchowski.

Clarkson described the study as a "multi-pronged effort" combining legal, taxation and policy issues.

One major portion of the study, she said, is to look at sites around the country that have been decommissioned -- such as the Yankee Rowe plant in Rowe, Mass., and Maine Yankee in Wiscasset, Maine -- and evaluate how the closures affected those communities and their states.

Specifically, Clarkson will be comparing what the property taxes were during operation and after shutdown.

"How are the sites back being productive?" she said is one question the Legislature will need to know during its deliberations. "How have they been restored and how are they taxing waste storage?"

What their current usages are has a direct affect on the tax rolls, she said, and another of the factors the Legislature must consider.

"That’s an incredibly valuable piece of property along the Connecticut River," she said, which could one day be the site of another power generating facility or for some other industrial use.

Because Entergy pays a big chunk of the town’s taxes, its closure would mean "a huge hit" on the town’s taxpayers, said Clarkson.

"A major concern that we have is the hit the Vernon school is going to take once the generation tax disappears," she said.

Vernon’s representative in the Legislature, Rep. Patricia O’Donnell, said the study is desperately needed.

"We need to know exactly what we are doing before we make these decisions," she said. O’Donnell supports the continued operation of the power plant.

Not only do legislators have to consider the effect on the town and the state tax rolls, but also what the loss of good-paying jobs will mean to the region.

"I think we should keep those jobs," said O’Donnell.

Every lost job will have an effect on the local economy, she said, "When people are not out there buying goods and services."

And if you cut $100 million out the state’s tax base that means even more lost jobs on the state level, cuts in services and programs and a decrease in education funding.

"We have to figure out how we are going to find this money," said O’Donnell.

The Vernon Selectboard has voted unanimously in support of the continued operation of Yankee, said Mike Ball, board chairman and a senior engineer at the power plant.

Ball is also concerned what effect the loss of jobs will have on his town and the region.

About 50 of Yankee’s 650 employees live in Vernon, said Ball.

Some might retire if the plant closes in 2012, he said, while others might have to move to find similar work elsewhere.

That would have an effect not only on income taxes to the state but also on property values if a bunch of homes were to hit the market at the same time, said Ball.

And, he said, those employees spend their money in the community and local vendors are employed doing contract work at the plant.

Two projects in Vernon will have a positive effect on the town’s tax roles, said Ball.

They are the new switchyard Velco is building on land it purchased from Yankee and new turbines recently installed in the Vernon Dam.

Velco is spending $281 million on the new switchyard. Velco manages transmission systems that move electricity around the state. The cost of the upgrades at the Vernon Dam were not disclosed by TransCanada, which operates the facility.

"They will lessen the impact but won’t make up for not having Vermont Yankee," said O’Donnell.

Clarkson will also be looking at what condition decommissioned sites were left in after clean up was complete and will be considering whether tax incentives can speed up decontamination when it happens.

"We’re hoping to have enough pulled together by the time we start the discussion in Ways and Means in January," said Clarkson.

If the plant continues operation past 2012, she said, her efforts won’t be wasted.

"We will at least have a file that will be thorough and well researched for whoever takes it on in 20 years," she said.

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