Green Mountain Power and Vermont Gas Systems have withdrawn their requests for $12.5 million in federal small business loans after new guidance said large, well-capitalized companies should not qualify.
Both utilities had applied for assistance under the federal Paycheck Protection Program. GMP asked for $10 million, the maximum allowed, and Vermont Gas sought $2.5 million.
The program offers loans that can be forgiven if companies keep a certain amount of employees on the payroll. Both GMP and VGS said they would seek loan forgiveness.
But the $349 billion loan program ran out of money before it reached many, much smaller companies hammered by the COVID-19 shutdown of the economy. Congress added more money this week. The Small Business Administration – which runs the program – also released more explicit guidance that said companies with ready sources of cash should not qualify.
GMP and Vermont Gas are owned by Noverco, a multi-billion dollar Quebec-based holding company that in turn owns natural gas and pipeline operations. Noverco owns a 40% stake in Enbridge, one of North America’s largest pipeline companies, with 2019 sales of $36 billion.
GMP spokeswoman Kristin Kelly said the Vermont utility saw the taxpayer-funded program as a way to keep costs down for customers.
“And we have taken multiple steps in order to try to reduce cost pressures for customers,” she said. “And that's why we had applied for this along with many other utilities in Vermont.”
"We have taken multiple steps in order to try to reduce cost pressures for customers. And that's why we had applied for this along with many other utilities in Vermont." — Kristin Kelly, Green Mountain Power
In a letter notifying the Vermont Public Utility Commission (PUC) it was withdrawing from the PPP, GMP said it’s feeling the financial impact of the COVID-19 pandemic.
“GMP has experienced significant load reductions in the commercial and industrial sector, lower monthly sales, and increased accounts receivable due to this crisis,” the company said.
The PUC has ordered GMP and other Vermont utilities to suspend disconnections during the COVID-19 state of emergency.
The Vermont Electric Cooperative and the Washington Electric Cooperative also applied for the PPP money, $2.58 million and $842,000, respectively. The two co-ops are small, member-owned utilities and plan to keep the funds.
“As a small rural co-op with, with some of the lowest-income members, we are using every tool available to us,” said VEC spokeswoman Andrea Cohen.
The Vermont Electric Power Company (VELCO), which operates the state’s bulk transmission grid, got $3.5 million in PPP funds but will return the money next week. VELCO’s Kerrick Johnson said the company has lost revenue because it can’t complete projects due to the work restrictions imposed during the pandemic.
“Our hope was that we could use these dollars and flow those back such that we would mitigate the additional burden placed on our customers, because of these measures, because of our inability to work as robustly as we would otherwise due to COVID-19 requirements,” he said.
The Department of Public Service, which represents ratepayers, had supported the utilities' efforts to get the federal money as a way to lower costs for customers.
