Finding "a long and persistent record of misconduct and mismanagement," the Vermont Public Service Board has ordered Citizens Utility Co. immediately to reduce rates by 16.53 percent and pay fines totaling $60,000.
The board also reduced the company's return on equity from 10.5 to 5.25 percent, citing what it said were improper accounting practices, permitting failures and other bad management practices.
The board sentenced the utility, which serves approximately 20,000 customers in northern Vermont, to a five-year period of "strict regulatory probation." During probation, the company will be required to reform its accounting procedures, managerial structure and processes for regulatory compliance.
Specifically, the board found that the company had been seriously derelict in its regulatory obligations to: 1) obtain necessary permits for transmission lines, substations and other facilities; 2) follow least-cost planning, supply and investment procedures; and 3) keep accurate books.
It also said that the company's overall management lacked clear lines of authority for critical Vermont operations and that the utility was imprudent in the planning, design, construction, maintenance and repair of a hydroelectric plant on the Clyde River in Newport.
The rate reduction partly reflects the cost of the imprudent construction and adjustments attributable to faulty accounting for demand-side management costs and transmission plant investment.