In a strongly worded letter sent to lawmakers last week, Vermont’s Public Utility Commission took the unusual step of criticizing the Department of Public Service for proposing to "raid" its reserves and take a portion of its annual funding.

The three-member commission is a quasi-judicial body that regulates energy, telecommunications, water and wastewater utilities. The department advocates for the public interest when cases come before the commission.

Both entities' budgets rely on a tax levied on utilities, but that revenue source has been declining. Earlier this year, lawmakers asked the department, in consultation with the commission, to report back with recommendations about how to address the problem.

In its November 15 report, the department proposed several short-term fixes for its own financial woes, which would come at the expense of the commission. It recommended taking $800,000 from the commission’s reserves to close its own budget gap and suggested that its share of tax revenues should permanently increase from 60 percent to 65 percent, reducing the commission’s share to 35 percent.

The three commissioners, Anthony Roisman, Margaret Cheney and Sarah Hofmann, pushed back the following day. “It would be bad policy to punish us for exercising fiscal restraint. Yet that is precisely what the Department seeks when it recommends raiding the Commission’s reserve fund,” the trio wrote in a letter obtained by Seven Days and addressed to the Joint Fiscal Committee.

Changing the division of tax revenue, they said, would result in a "drastic decrease" of more than $440,000. The commission has a $3.7 million budget, 95 percent of which comes from the utility tax.

"We’re not at war with the department in any respect," Roisman, who chairs the commission, said during an interview. "The problem is that the total amount of money to the two organizations is inadequate."

He continued: "A solution needs to be found. It just should not be a solution that severely cripples our ability to do our job."

The commission also criticized the department for making the recommendations at the last minute. Its November 16 letter states that the two entities engaged in "healthy collaboration" while working on the report’s first draft, submitted October 8. But "the collaboration ended ... just hours before submitting the final report," when the department recommended the "misguided" funding changes, the letter read.
In an emailed response to questions, June Tierney, the commissioner of the Department of Public Service, wrote that, “In retrospect, it is clear to me that the better course of action would have been to seek comment from the PUC on the Department’s final recommendation. I will have to do better next time.”

Tierney continued, “I acknowledge and respect the Commission’s concerns. Though our agencies are affected in different ways, they are facing the same funding problem, and therefore have a shared interest in identifying sound solutions.”

Read the full letter below: