UTILITY DEBTS CONTINUE TO PLAGUE MERGER - Village Electric To Hold Vote On Nuclear Power Contract
Whether or not the surety for the Village’s bonded indebtedness remains with the Village’s grand list following merger or transfers to the Town’s entire grand list continues to be a bone of contention in consideration of merger.
Trustee Steve Fitzhugh said that he was not sure if he bought into the concept that the indebtedness had to remain with the current Village properties because it was Village voters who approved the bonds. He questioned whether the Town should take the assets without accepting the surety responsibility.
Trustee Chairman Kevin Beal likened it to one company purchasing another. He said that if Green Mountain Power were to purchase Northfield Electric, they would take the debts with the assets.
Selectman Brad Denny said that the committee had debated this issue, and that it was his understanding, after meeting with counsel, that because voters from the Town did not vote to accept the responsibility, it would remain with the current Village properties.
Carolyn Stevens, a member of the merger committee, said that it was her understanding that, from a bondholder’s perspective, the Village properties are what has been put up for surety because it was the Village that voted to do so.
At a merger committee meeting last month, Ken Johnson had asked who would be responsible for the utilities’ debts. He said that several people had asked the question of him.
Mr. Denny told the boards that the surety comes into play only if the rates are set at amounts insufficient to cover the debts and the utility defaults. He said that it would be the selectboard’s responsibility to see that the rates are appropriately set.
Mr. Fitzhugh said that he was voted into office by the Village voters to look out for their best interests.
Neither the trustees nor the selectmen voted to approve the merger document, but they did vote to set public hearings, the first of which is to follow the special Village meeting on January 2, 2013.
Village voters are being asked to ratify a power contract with the Seabrook nuclear power plant in New Hampshire, Mr. Beal said. He said that it would amount to about five percent of Northfield Electric’s portfolio and would help provide long term stability for electric rates.