Vermont agrees 26-year hydropower deal with Hydro-Québec

August 13, 2010

Hydro-Quebec-US President Christian Brosseau, CVPS President Bob Young, and Green Mountain Power President Mary Powell with Hydro-Quebec President and CEO Thierry Vandal, Québec Premier Jean Charest, Gov. Jim Douglas and Lt. Gov. Brian Dubie after signing the contract yesterday
Vermont’s two largest utilities have signed a 26-year deal to continue using hydropower sourced from across the border in Canada.

Green Mountain Power (GMP) and Central Vermont Public Service (CVPS) agreed to buy power from Hydro-Québec yesterday, subject to regulatory approval.

Under the deal, Vermont will purchase up to 225 megawatts of energy, mainly hydropower, from November 2012 through 2038.

It will see prices starting at around six cents per kilowatt-hour, linked to inflation and electricity market price indexes, but with a price-smoothing mechanism to guard against price volatility.

Energy will be provided by Hydro-Québec subsidiary HQ Energy Services (U.S.), which supplies around 98% hydropower.

Other Vermont utilities will also be allowed access to power through the agreement signed on their behalf by CVPS and GMP.

The deal now requires consent from the Vermont Public Service Board.

Competitive

Vermont Governor Jim Douglas said the agreement would ensure a “clean competitively priced energy future” for his state.

Gov Douglas said: “It will provide stable renewable power at a competitive price for 26 years, starting in 2012, and will help Vermont’s power supply remain arguably the nation’s cleanest.”

In a joint statement, the two Vermont utilities explained that the electricity deal would see the highest prices and lowest prices ironed out.

CVPS President Bob Young and GMP President Mary Powell said in the joint statement: “Overall, we believe it is an attractive deal for Vermont, and are pleased to include other Vermont utilities as well.”

Vermont has been buying power from Québec for decades, with the first long-term contracts established in the early 1980s.

The new deal will take over from the present contract, signed in December 1987, which phases out around 2016.