Department of Public Service Censors Criticism in Audit

The Vermont Department of Public Service (VDPS) has come under intense scrutiny this week for omitting criticisms from an internal report assessing its accountability to the public. In a letter to the Department, lawyer James Dumont argued that VDPS independence is compromised by the influence of the governor, who appoints the director of the organization and retains undue influence over decision making at the Department. Although VDPS Public Service Commissioner Chris Recchia told the Senate Finance Committee that an appendix to the report included all commentary, which was also available online, Dumont’s criticism was left out.

“A lawyer must, under our code of ethics, represent the wishes of the client,” Dumont wrote in a retainer. “I believe it is high time for the legislature to re-examine whether ratepayer advocacy should be directed by a person who is appointed by the governor, serves at the pleasure of the governor and ... in some major cases has been ordered or strongly urged to make decisions based on the wishes of the governor without regard to the expertise and opinions of the professional staff and lawyers within the Department.”

The report, eventually issued on Feb. 22, did not include this suggestion, instead stating that “... there is no indication that the current structure of the Department creates any real or inherent conflicts of interest.”

In June of 2015, Governor Shumlin signed an act of the Vermont State Legislature mandating VDPS to “... evaluate the pros and cons of various forms of ratepayer advocate offices,” and to develop “any recommendations on how to improve the structure and effectiveness of the Division for Public Advocacy (DPA) within the Department of Public Service.”

In theory, the DPA is responsible for ensuring that ratepayers in Vermont, no matter what utility they pay for, are protected from exploitative price hikes or unfair rate changes, and is generally intended to advocate on behalf of consumers. Because a limited number of utility companies are able to operate in Vermont, the VDPS is meant to simulate competition and regulate the non-competitive market.

The VDPS is part of the executive branch, and is run by a commissioner appointed by the governor. Critics like Dumont assert that placing ratepayer advocacy under the umbrella of an appointed office rather than one chosen by ratepayers compromises the independence of the office.

Supporters of this structure say it is economical and better meets the needs of the public. In a press statement, Recchia claimed that her staff mistook Dumont’s letter for personal comments that he did not wish to be used in the VDPS audit.

“My staff just misinterpreted Mr. Dumont’s request in his letter about providing formal comments,” said Recchia, “and they thought that he did not wish to include those.”

“Obviously, after [hearing about this] yesterday, he did want them included and we have posted those since then on the website,” she continued. “But that was entirely a staff interpretation decision based on their conversations with him. And I respect the fact that, checking it out today, that’s what they told me.”

However, Dumont is not alone in his opposition to the current VDPS structure. During the audit process, AARP Vermont Advocacy Director
Philene Taormina pointed out that the VDPS structure is unique to Vermont.

“One week the public advocate is fighting with the company to make a large expansion in a pipeline or a big renewable project and ... then the next week they take off that hat and all of sudden they represent ratepayers ...”

On Feb. 24, Dumont also told the Senate Finance Committee that his letter points to a set of larger issues at the Department.

“In my letter, I specifically raised this very issue, which is the Department staff and the public advocate are not being listened to because the decisions are being made from the top down instead of from the bottom up.”

Carl Scott, who retired from Green Mountain Power in 2014 after years of dealing with the state’s regulatory system, also testified Thursday.

“The department is designed by statute to be the competition ... for the regulated monopoly. Good competition yields razor-thin margins while producing a superior quality product,” he said. However, there are doubts by many that the VDPS is doing this job efficiently, in- stead kowtowing to corporate interests at the expense of the taxpayer.

Vermont is among the states with the highest cost of electricity in the country, at 11th most expensive. It is also different from all the others in New England: utilities are not able to sell cash credits for their renewable power into a regional marketplace.

Vermont has, on average, earned $50 million per year from this program, which was used to hold down rates. Normally guarded by a Public Advocate, these could jump as much as six percent in Vermont next year.

The American Association of Retired Persons (AARP), one of the loudest voices in the PR battle, released a stinging rebuke of the VDPS following revelations that evidence was discluded from its audit.

“The Public Advocate and its division are comprised of attorneys who, by statute 2 and ethical codes, are required to act on the behalf of their client, the Commissioner of the Department of Public Service, not ratepayers,” reads the executive summary of the critique. “Thus, the office of the Public Advocate is, unfortunately, a misnomer since he or she does not represent ratepayers by statutory definition, but instead, represents the commissioner – who, in turn, reports to the governor.”