SOURCE: Central Vermont Public Service Corporation

Central Vermont Public Service Corporation

January 13, 2011 09:26 ET

Utilities: New Hydro-Quebec Contract to Start Below Current Contract Price

RUTLAND, VT--(Marketwire - January 13, 2011) - Vermont utilities' new contract with Hydro-Québec will begin in 2012 at rates below the existing contract, which phases out over the next five years. Central Vermont Public Service (NYSE: CV) and Green Mountain Power today filed information with the Vermont Public Service Board that shows a starting price of $58.07 per megawatt-hour. The PSB will hold technical hearings on the proposed contract beginning on Wednesday, Jan. 19, 2011.

"We are extremely pleased with the deal we negotiated and with the starting price we will pay," CVPS President Bob Young and GMP President Mary Powell said in a joint statement. "We pride ourselves on providing a low-carbon, high-renewable power supply at affordable rates, and this contract will help us retain a competitive position in the region while helping control the air impacts of our supply."

Under the agreement, which the PSB is reviewing, Vermont utilities will purchase up to 225 megawatts of energy, predominantly hydroelectricity, from H.Q. Energy Services (U.S.) Inc. (HQUS) starting in November 2012 and ending in 2038. HQUS markets electricity from Hydro-Québec's generating fleet, whose output is 98 percent hydroelectric.

While the contract was negotiated by CVPS and GMP, HQUS is also selling energy in selected amounts to every other Vermont utility. Those utilities are Vermont Electric Cooperative Inc., Vermont Marble Power Division of Omya Inc., Washington Electric Cooperative, the Town of Stowe Electric Department, the City of Burlington, Vt., Electric Department, and Vermont Public Power Supply Authority on behalf of its 13 municipal electric utility members.

The agreement includes a price-smoothing mechanism that will help shield Vermont customers from volatile market prices. This starting price, while for a somewhat different category of power service, is about 12 percent lower than the existing contract's expected 2012 price. 

"Any time we can replace something that has served us exceedingly well for decades under pricing terms that are lower while being shielded from the market's high volatility, that is an improvement and a significant accomplishment," Young and Powell said.

"The agreement will provide reasonable price stability and an initial small reduction in the cost of one slice of our power portfolio," Young and Powell said. "This is a very attractive deal for Vermont and a significant accomplishment on behalf of our customers and the customers of the other participating utilities."

Young and Powell thanked the Douglas Administration for its help in working with Québec in the months leading up to the contract signing this past summer, and the Shumlin Administration for its continued support to gain approval from the PSB. "Governor Douglas, Lt. Gov. Dubie and Governor Shumlin have been uniformly supportive of our efforts to produce a valuable contract for Vermonters," Young and Powell said. "There has been a tremendous collaborative effort between utilities, the two administrations and officials in Québec."

Contact Information

  • Contacts:
    CVPS
    Steve Costello
    (802) 747-5427

    GMP
    Dorothy Schnure
    (802) 655-8418