Hyde Park Electric customers found out this week that their rates will increase by more than 20% as the company attempts to emerge from a financial crisis.
The small electric utility is insolvent and in about $4.5 million of debt, according to a state investigation.
Brian Evans-Mongeon, the village manager and manager of the utility, resigned from both positions on Oct. 24. Morrisville Village Manager Scott Johnstone has stepped in as interim manager. Hyde Park Electric serves about 1,400 customers in Lamoille County.
Hyde Park village officials could not be reached to comment on Evans-Mongeon's departure.
State regulators opened an investigation into the company’s finances last month after Hyde Park Electric sent a letter to the Public Utility Commission saying it could not meet its financial obligations because it was out of cash.
This week, the Department of Public Service released details of the investigation, and provided a plan for the utility, including the 20% rate increase.
The Public Service Department says there has been no interruption in service, and that the state is developing a plan so that the utility can continue providing power to its customers.
When the state opened up its investigation, Public Service Commissioner Kerrick Johnson said his office was trying to determine the extent of the financial crisis.
In records released this week, the Public Service Department said that the village of Hyde Park took out a roughly $1 million loan to cover the shortcomings of the electric utility.
Hyde Park Electric does not have the money to cover that loan, which matures in February, and the Department of Public Service says the loan will have to be restructured to “avoid the potential of Hyde Park Electric Department’s financial problems cascading onto the village and bank.”
Hyde Park Electric is now working with the Vermont Public Power Supply Authority to manage its finances and determine the extent of the crisis.
The state is also concerned about an aging substation transformer, since Hyde Park has no money to invest in the equipment, nor is there a contingency plan if the transformer fails.
And it warned that customers may face additional rate increases next year.
