Power to the People?
The commissioner of public service reacts to charges of coziness with Vermont Yankee
Even as the aging nuclear power plant is leaking radioactive tritium, O’Brien believes nuclear power can be as “safe, clean and reliable” as Vermont Yankee’s corporate motto claims.
“As soon as you heard the word ‘tritium,’ there’s a natural reaction of alarm to that,” O’Brien says in a phone interview between sessions at a utility conference in Washington, D.C. But the 46-year-old businessman-turned-regulator hasn’t given up on the nuclear facility.
“The more I understood about energy, the more Vermont Yankee became an important part of our foundation,” O’Brien says, explaining how he came to support nuclear power.
O’Brien has taken plenty of fire for his full-throated support of nuclear power, a technology that right now is rattling nerves in Vermont and around New England. And as Vermont’s top utility watchdog, he has a lot of say over whether Vermont Yankee will receive a 20-year extension of its operating license, which is set to expire in 2012. At stake are 650 jobs at the Vernon reactor, $20 million in tax revenue paid by the plant and a third of Vermont’s power supply.
You can hardly pick up a Vermont newspaper these days without seeing O’Brien’s name in print. As FairPoint slogs through bankruptcy, Burlington Telecom teeters on insolvency and Vermont Yankee triages its growing list of problems, he’s the one state official who seems to hold their fates in his hands.
Actually, O’Brien’s office has no direct authority over the relicensing of Vermont Yankee. That power rests with the legislature and the state’s Public Service Board. But O’Brien wields significant influence over utility cases, regulatory experts say, speaking for the governor and, ostensibly, for ratepayers in all cases before the PSB.
O’Brien cuts a confident figure. Dressed in striped tie, white shirt and dark blazer at a recent Statehouse hearing, he resembled a grown-up Connecticut prep schooler. He has parted blond hair and squinty eyes, and speaks assuredly with a politician’s knack for soundbites.
“The reality of being commissioner is, very few people are happy with you,” O’Brien says. “You’re definitely not giving away ice cream on the corner.”
That’s an understatement. Many high-profile public service commissioners before him, such as Richard Sedano, have gotten a lot of ink. But when it comes to political controversy, O’Brien is in a league of his own.
His critics charge he sees energy matters purely through a business lens — a result of a career in banking and economic development — and doesn’t sufficiently heed environmental concerns or the potential for alternative energy.
O’Brien counters that he’s just trying to “buffer” power producers like Vermont Yankee against politicians who “demonize” the nuclear plant. He believes such rhetoric creates a bad “business climate” that, if left unchecked, could cause Vermont Yankee to pull up stakes and leave the state.
“I don’t want [rhetoric] to be the reason that consumers and employers lose this plant,” O’Brien says. “I’ve tried to take a moderating position on some of these issues.”
O’Brien was raised in the wealthy suburb of Trumbull, Conn. He earned a bachelor’s degree in accounting from the University of Bridgeport and a master’s in finance from Fairfield University. After college, he landed a job as a commercial lender for what is now People’s United Bank. He moved to Vermont and worked for eight years as head of the Rutland Economic Development Corporation, a quasi-public agency that makes grants and business loans. Today he lives in Rutland.
Since O’Brien had no prior utility experience, environmental groups questioned his qualifications for the job when Gov. Jim Douglas appointed him commissioner in 2003.
His actions since have led lawmakers to forego “confirming” his appointment. Senate President Pro Tem Peter Shumlin (D-Windham) says it’s the first time in his 10 years as Senate leader that a commissioner wasn’t confirmed for lack of “yes” votes. O’Brien is the only commissioner in the Douglas administration not to get the legislative nod.
“There’s a feeling that Commissioner O’Brien is more willing to protect the corporate interests of companies like Entergy Louisiana than he is the ratepayers,” says Shumlin. “This has nothing to do with David O’Brien personally. He’s a decent and a good human being.”
O’Brien calls Shumlin’s remarks “ludicrous” and “lazy” and challenges any lawmaker to name specific instances of departmental bias toward utilities.
He’s given them some ammo over the years. In 2007, O’Brien was hauled before a State Senate committee after allegedly threatening State Sen. John Campbell (D-Windsor) over his support for a tax on Vermont Yankee. O’Brien supposedly told Campbell that a powerful Burlington businessman would be “very disappointed” if Campbell backed the tax, according to the Burlington Free Press, a veiled threat to the senator’s political future. O’Brien admitted the conversation took place, but claimed Campbell misunderstood what he was saying.
In 2008, Seven Days reported that O’Brien threw a Christmas party in Stowe attended by utility bigwigs, including Jay Thayer, the high-ranking Vermont Yankee executive who was put on “administrative leave” for lying to state regulators.
“Here’s the irony,” O’Brien says in defense. “The people who came to my Christmas party, I was paying all the money. How was that advancing their influence over me?
“Every utility that I have interacted with has run into some very tough times if what they were doing was contrary to ratepayer interest,” O’Brien says.
For instance, O’Brien says, Central Vermont Public Service, the state’s largest utility, lost a rate case against the Department of Public Service that caused their bond rating to tank. O’Brien says he took “a very hard line” against the utility because “it was the right thing to do.”
“That was not without political pressure being applied by the company,” O’Brien adds. “But I stood my ground and so did the governor. Nobody ever writes about that.”
Vermont Electric Power Company’s spokesman Kerrick Johnson says of O’Brien: “David is very loyal to his staff, has the courage of his convictions to the point of being stubborn, and can be quick to judge. However, if you make your case factually, directly and honestly, you can come to an agreement.”
For years, O’Brien and Gov. Jim Douglas sang the praises of Vermont Yankee for the relatively cheap power it pumped into the grid. But recent revelations about radioactive tritium leaching into groundwater and company executives lying under oath have forced the administration to qualify its support.
Now, O’Brien says there’s a “long list” of problems Vermont Yankee would need to fix in order to win the state’s backing for a 20-year license extension. Along with staunching the tritium leak, the nuclear plant’s owners must reach a long-term power contract with Vermont utilities, convince state leaders there’s enough money to decommission the plant when it’s shut down, and shake up its executive team in light of admissions that company brass lied to state regulators under oath.
Sedano, who had O’Brien’s job between 1991 and 2001, gives the commissioner the benefit of the doubt. Now a director at the Regulatory Assistance Project, Sedano says utility executives “out and out lied” to him when he was in that role. O’Brien can’t be held responsible for information that was willfully witheld from him.
On the other hand, Sedano says it’s “inconceivable” that O’Brien or his staff wouldn’t know about underground piping at Vermont Yankee. “At a nuclear plant, there’s a record of everything,” Sedano says. “You just have to be really determined to find it. I don’t understand how this was allowed to occur. I have no explanation for it.”
Shumlin and other Democrats have some theories. “He comes from an economic-development background and he’s always had trouble removing himself from that role,” says State Rep. Tony Klein (D-East Montpelier). O’Brien has testified numerous times before Klein’s House Natural Resources and Energy Committee, including a marathon performance earlier this month answering questions about the continuing problems at Vermont Yankee.
Klein says that “personally” he likes O’Brien very much, and thinks the commissioner is “well intentioned.” But “this administration has never brought forth one piece of innovative, proactive energy legislation to this legislature in eight years,” Klein says during a sit-down at the Statehouse. For years, Klein says, O’Brien and the governor have stood in opposition to forward-thinking energy initiatives such as expanding efficiency programs; feed-in tariffs that pay renewable power producers a marked-up rate to feed extra power into the grid; and expanding the weatherization and renewable energy industries, moves Klein believes “could have helped us weather the economic storm.”
So what is the Douglas administration’s vision for Vermont’s energy future? That’s a question not easily answered by O’Brien.
“I think it’s very misleading to sort of make some broad statements about where energy policy should go in terms of saying specific types of energy,” O’Brien says. “To me, energy policy isn’t all that complicated if you have some core principles that you stick to.”
For O’Brien, those would seem to include: Power should be cheap; power should be plentiful; and power should be dependable.
He clashed recently with Klein and renewable power advocates over a white paper published by the Department of Public Service that depicted feed-in tariffs as a massive waste of money that produced few jobs which were only temporary.
History shows O’Brien to be a skeptic of renewable-power — or at least of government backing “green” power. One of the Department of Public Service’s primary roles is to craft a 20-year energy plan for the state, a roadmap meant to guide the Public Service Board as it considers applications for energy projects. O’Brien’s 20-year plan, released in 2004, was assailed by environmentalists for prioritizing cheap power from conventional fuels over government support for renewable energy sources.
O’Brien says there’s a “lot” he likes about renewable power — it’s clean, it’s not tied to commodity price fluctuations, it sells for stable prices — but says feed-in tariffs “artificially” raise power prices and “completely go against sound economics.”
Last year, O’Brien opposed an energy bill that authorized feed-in tariffs because it would add 2 percent to ratepayers’ electric bills — $2 on a $100 monthly bill.
Michael Dworkin was chairman of the Public Service Board during the first part of O’Brien’s tenure, from 1999 to 2005. He says O’Brien and the Douglas administration missed a golden opportunity to pursue alternate power sources — renewable or not — that would have lessened the state’s dependence on Vermont Yankee.
“It could have been an option, not a necessity,” says Dworkin, now director of the Institute for Energy and the Environment at Vermont Law School. “Having spent half a dozen years telling Entergy they were so vital and essential and Vermont would give them anything they ask for, it’s no surprise Entergy has asked for more than Vermont should give.”
O’Brien’s response: “If you’re hard on utilities, they think you’re unfair. For people who think utilities are bad, any time you’re being reasonable with them, you’re being too soft. It’s very hard to win.”
Before hanging up, O’Brien adds one final regulatory thought: “The goods of the many outweigh the needs of the few. With that, I think I’m going to get a cold beverage.”