State regulators are investigating the Hyde Park Electric Department’s finances, after the small electric utility reported that it has been relying on loans to cover its revenue shortfalls.
The Public Utility Commission, which regulates Vermont’s electric utilities, says it wants to find out how Hyde Park ended up in such dire financial shape, and says the investigation will determine if Hyde Park Electric broke the law when it used money from loans taken out by the Village of Hyde Park to cover its liabilities.
“The department could not be more concerned,” said Department of Public Service Commissioner Kerrick Johnson. “Essentially Hyde Park Electric is not solvent.”
Johnson said the Department of Public Service was tipped off that Hyde Park Electric was using money it was collecting from ratepayers through an Efficiency Vermont program to pay its bills.
Upon further investigation, Johnson said it became clear that Hyde Park Electric Department had moved other funds around to meet its obligations.
“They are in this situation because of the decisions they made over a period of time,” Johnson said, adding that the state’s top priority is “to restore financial solvency” before undertaking “a more forensic analysis of exactly what monies were used and how.”
“The department could not be more concerned. Essentially Hyde Park Electric is not solvent.”Kerrick Johnson, Department of Public Service
Hyde Park Electric Department provides electric service to about 1,400 customers in Hyde Park and the town of Johnson across about 18 square miles in Lamoille County.
It is managed by the village of Hyde Park, and Trustee Chair Frederika French said the financial issues snowballed over the past few years after the utility lost its manager and had trouble finding a replacement.
“We recently figured out that there were some financial issues and we’re working very cooperatively with the department to figure out what our next steps are,” French said.
Hyde Park Electric has not been paying its bills to VELCO, nor to Green Mountain Power, according to the Public Utility Commission.
French said the utility is working with the Vermont Public Power Supply Authority to get a clearer picture of its finances.
“We are only beginning to find out things,” French said. “There was nothing intentionally done and it is going to be a little while before we’re able to figure it all out.”
State regulators’ concerns date back to at least 2023, when the Public Utility Commission sought a report on the utility’s finances.
Hyde Park Electric never filed that update, according to the PUC.
Then in 2024, the Department of Public Service recommended corrective actions to make sure Hyde Park was collecting enough revenue to cover its expenses.
Hyde Park apparently convinced the state that its financial situation was improving, and the state closed its investigation.
Johnson said there is a strong chance that ratepayers will have to cover some of the debt the utility has been covering with other funding sources.
“There were loans entered into for the sake of handling utility operations, and Public Utility Commission approval of those financial instruments was not sought, nor was it granted,” said Johnson. “The question now is how do we redress this in a manner that does not punish Hyde Park electric ratepayers?”
