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April 10, 2012

In Utility Merger Fight, A Battle For Votes — Or For Hearts and Minds?

If supporters of a proposed merger between the state’s two largest electric companies made one thing clear Tuesday it’s this: They’re winning the inside game in the Statehouse.

At a hearing held by two House committees Tuesday morning, an all-star lineup of current and former regulators, business leaders and the execs of the merging companies — Green Mountain Power and Central Vermont Public Service — stepped up to the microphone to say, “Hey legislature, mind your beeswax and quit meddling with the merger.”

House Energy Committee chairman Tony Klein (D-East Montpelier), who organized the hearing, said that with the merger battle royale focused on a disputed $21 million component, his goal was to broaden the scope of the debate.

“It’s a $700-million-plus deal and we’re only focused on $21 million. Part of this hearing was to find out what’s in the rest of the $700 million,” he said.

To opponents of the deal, Klein — who, like House Speaker Shap Smith, believes the legislature shouldn’t weigh in on the merger — was simply trying to change the subject. They say Smith and the merger’s chief elected booster, Gov. Peter Shumlin, are bottling up two bills that could be amended by detractors to change the terms of the merger.

“I think they’re just trying to run out the session and then we’ll all go away,” says Rep. Patti Komline (R-Dorset), who coauthored an amendment that would force the merging companies to cut $21 million in checks to ratepayers.

If that is indeed the House leadership’s not-so-secret plan, it certainly appears to be working. Though Komline says she’s convinced 80 House members to support her amendment — a majority of the 150-member body — you can’t amend a bill that's not going to the floor.

Over in the Senate, antagonism toward the merger has been louder but less organized. While Senate President Pro Tem John Campbell has bucked the Shumlin administration by indicating ambivalence toward the deal, it’s anyone’s guess whether he'll organize his chamber to oppose it. Campbell did not respond to requests for comment Tuesday.

So with merger proponents winning the inside game at the Statehouse, it’s time for those who want to tweak the deal to take their ball and go home, right?

Not if you ask Greg Marchildon, Vermont state director for AARP. His interest group is the loudest proponent of returning the $21 million — the value of a 2001 ratepayer-financed bailout of CVPS — to consumers and businesses, rather than investing it in energy efficiency, as the electric companies and the Shumlin administration have proposed.

Marchildon believes that by crafting a coherent message — give Granny her bailout money back — and running an aggressive campaign in the court of public opinion, his side is winning over the hearts and minds that matter.

“We ran a sophisticated and very high-level campaign, and we executed it pretty flawlessly, frankly. I’d let the other side characterize how they’ve done,” he says. “What we’ve done is create an environment for real people to take a step back and say, ‘This isn’t right.’”

AARP’s public engagement campaign has been extensive. According to Marchildon, the organization has spent just shy of $100,000 on television advertisements — in three two-week waves — blasting the deal. Their latest ad, which is appearing on WCAX-TV and cable channels, debuted last night.

Additionally, AARP spent between $15,000 and $20,000 on two mailings to members who live in CVPS’s service area and who would therefore benefit from a ratepayer refund. The group spent $12,500 on newspaper ads and $5000 on Facebook ads, according to Marchildon.

“Obviously, a real question for us at the start was if we’re really going to make this case, we’re going to need a big tool,” Marchildon says. “We’ve been greatly outnumbered and knew we were going up against what most people would agree are a very powerful twosome: Green Mountain Power and the Shumlin administration.”

Marchildon says his cause has been helped by a simple message.

“One of the things we’ve focused a lot on is speaking English and what the other side speaks is utility, which is not a language most Vermonters understand,” he says.

AARP's 30-second television spot, replete with images of a hard-working dairy farmer and a sad-looking family, translates a complex and wonky merger proposal into a paired-down, emotional appeal.

“If Vermont’s two largest utilities merge, executives and shareholders will make a bundle — about $150 million,” the narrator of the ad intones as a stack of cash falls from the sky. “But this merger wouldn’t have happened if we hadn’t bailed them out in the first place.”

The governor and the utilities, the narrator tells us, “seem to know what’s best for us.” But, the ad concludes, “Shouldn’t the governor side with Vermonters, not a power company?”

Far from subtle, but even those on the other side agree that it’s been effective.

“I congratulate folks who are advocating for the payback in a check,” says Klein. “I can’t go to the hearts of the people. I know that in the world of politics, that’s great politics. And it’s really, really hard to refute something like that.”

Of course, it’s all well and good for AARP to rile up Granny and Gramps — but if the legislature won’t budge, what’s the use?

Marchildon claims it was never AARP’s intention to goad the legislature into interfering with a decision on the merger that will ultimately be made by the independent Public Service Board.

“The legislature is going to do what it’s going to do,” he says. “They listen to their constituents and they speak up because that’s what elected officials do. Whether they want to move forward on this is entirely up to them." No matter that it’s his organization that’s been telling those constituents to contact their elected officials.

Instead, what AARP appears to be up to is working the referee. Though the Public Service Board acts as a quasi-judicial body and reviews only the evidence filed by formal interveners, Marchildon suspects the three commissioners might be paying attention to the ruckus in the Statehouse.

“You don’t lobby a quasi-judicial body the way you lobby a legislator and a governor. But this was a fair and honest way to bring the people’s voice into the process,” he says.

If the three commissioners are paying close attention to what Marchildon hopes the masses are thinking, perhaps that might sway them when they settle on the terms of the merger. 

“There’s absolutely no question that the Public Service Board doesn’t live in an icebox. They wake up every morning, pour their coffee and read the newspaper.”

And who knows? Maybe they even watch the ads on WCAX.

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