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Canadian Pipeline Company To Increase Indirect Ownership Of Vermont Utilities

Exterior of the Vermont Gas building.
Taylor Dobbs
/
VPR File
Enbridge Inc., one of North America's largest pipeline companies. is increasing its stake in the parent company that owns Vermont Gas and Green Mountain Power.

Will it matter if a major pipeline company has a larger stake in the parent companies of Green Mountain Power and Vermont Gas? Climate activists and opponents of gas pipelines think so.

State regulators are now examining a change in ownership that would indirectly increase the ownership of Enbridge Inc. in the Vermont subsidiaries.

GMP and Vermont Gas both say they operate independently in Vermont. Yet they’re part of a complex, multi-layered ownership structure involving Canadian pension funds, a major Quebec natural gas company, and Enbridge, one of North America’s largest pipeline companies.

The deal under review would increase Enbridge’s stake in the Canadian corporate parent to about 39 percent.

The state’s asked for a hearing before the Public Utility Commission to review the change.

"We believe that ... a hearing will be necessary so that we may hear testimony to be sure that the parent companies' goals and priorities are in line with those of the companies that they ultimately own in Vermont." — James Porter, Department of Public Service

“We believe that the opportunity for a hearing will be necessary so that we may hear testimony to be sure that the parent companies’ goals and priorities are in line with those of the companies that they ultimately own in Vermont,” said James Porter, director of public advocacy at the state Department of Public Service.

Porter said the ownership change should have no material impact on GMP or Vermont Gas, because they are already controlled by a Canadian energy company even before Enbridge increases its stake.

“That said, since the last time one of these transactions was approved, there have been substantial changes in Vermont’s energy policy and goals,” he said.

Among those changes: Vermont now has a commitment to convert to 90 percent renewable energy by 2050. And GMP has promised to have a 100 percent renewable portfolio by 2030.

The organization 350Vermont says these commitments don’t match Enbridge’s corporate history and heavy investment in fossil fuel infrastructure. A 2010 Enbridge pipeline spill in Michigan dumped over 1 million gallons of tar sands oil into the Kalamazoo River in Michigan. Julie Macuga with 350Vermont said the company continues to invest in pipelines and fossil fuel infrastructure across North America.

"Enbridge is doing a lot of egregious things [such as] their history of destroying ecosystems and violating treaties. I don't see that being in line with Green Mountain Power's values and their commitment to 100 percent renewable energy." — Julie Macuga, 350Vermont

“Enbridge is doing a lot of egregious things [such as] their history of destroying ecosystems and violating treaties,” she said. “I don’t see that being in line with Green Mountain Power’s values and their commitment to 100 percent renewable energy.”

In documents filed with Public Utility Commission, a Canadian executive says the ownership change will not affect Vermont operations. But he did not outline why Enbridge wants to add to its holdings..

And that's an answer worth knowing, said Kevin Jones, the director of the Institute for Energy and the Environment at Vermont Law School.

“Clearly from the documents that have been filed, it's not clear whether this is about gaining more control over Vermont utilities or gaining more control about assets elsewhere in Quebec,” Jones said.

A transaction of this nature affecting the state’s two major gas and electric companies should be closely examined, Jones said.

“When there’s a change in ownership I think it’s very important for it to be transparent and for regulators and for the people in Vermont to understand who will own and control the entity, even though it’s not a change in majority control,” he said.

James Dumont is a lawyer in Bristol who has represented opponents of Vermont Gas’ Addison pipeline project. He said the public should be concerned about Enbridge’s indirect ownership in Vermont in part because federal regulators encourage pipeline companies to use existing pipeline corridors.

“Part of their agenda right now is to get natural gas to the Atlantic Coast to export it,” he said. “To the extent that Enbridge gets more control over the companies that own Vermont Gas and Green Mountain Power, that will make it easier for them to use these corridors.”

GMP officials said the company operates independently, and its commitment to renewables stays strong.

“Our governance is Vermonters,” said Kristin Kelly, GMP spokeswoman. “Nothing is expected to change at all in how GMP is run, in GMP’s commitments to our customers in delivering innovative solutions that continue to cut carbon emissions.”

"This transaction is not going to impact our customers, our communities or our operations here in Vermont." — Beth Parent, Vermont Gas

Beth Parent of Vermont Gas said the company has no plans to expand its pipeline.

“This transaction is not going to impact our customers, our communities or our operations here in Vermont,” she said. “We are led by a team of dedicated Vermonters and we work hard every day to deliver a clean and more affordable energy option.”

But James Dumont, the lawyer who has worked on utility issues for years, offered this historical comparison: When Vermont utilities wanted to lock into long term contracts with Hydro-Quebec, state regulators in 1990 held extensive hearings. Canadian executives were called to Montpelier to be cross examined under oath.

“And I hope that’s what happens in this case, that we just don’t get public relations, we actually get witnesses and discovery, so we get reliable answers to questions,” he said.

Late on Friday, the Public Utility Commission scheduled a pre-hearing conference for May 31 on the change of ownership.

Update 5/17/2019 6:30 p.m Story was updated to note that the PUC will hold a pre-hearing conference on the case.

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