VermontÂ’s utilities ink 26-year deal

Hydro-Quebec Vermont electricity contract outlines a 26-year power purchase agreement, initial 5.8 cents/kWh rate, a price smoothing mechanism, and disputed pricing secrecy amid competitive wholesale markets and calls for ratepayer transparency.

Vermont's two largest electric utilities said that power they're getting under their new 26-year contract with Canadian power generator Hydro-Quebec will cost less than the electricity they're getting under a deal struck in 1991 — for the first year at least.

How much it will cost after that will be determined under a formula that the parties to the deal want to keep a secret, and that rankles some observers who track utility issues in the state.

"I don't think that the public has heard a really good explanation for why these previously disclosed contract costs are now being kept secret," said Annette Smith, executive director of Vermonters for a Clean Environment, which has been active recently in opposing mountaintop wind power projects amid a wider green energy shortage that affects prices today. "As a consumer I want to know how much my electricity is going to cost."

Green Mountain Power Corp. spokeswoman Dorothy Schnure said power markets have become more competitive, as seen in a recent competitor exit in Pennsylvania report, requiring a greater need for secrecy.

"We will be as transparent as possible, but it is a different world than it was years ago when the energy market was not a competitive market," she said.

James Moore, program director of the Vermont Public Interest Research Group, wasn't buying it.

"Competition is fostered by people knowing what prices they have to compete against, not by secrecy and a lack of transparency," he said.

Officials said a price of about 5.8 cents per kilowatt-hour had been struck for a year beginning in November 2012, the first year of a 26-year agreement signed in August. The deal calls for Vermont to get about enough electricity from Canada, reflecting the governor's work with Canada on renewables to serve 200,000 homes.

GMP President Mary Powell and Central Vermont Public Service Corp. President Robert Young released a joint statement saying they were "extremely pleased" with the deal and the first-year price.

"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," statement said.

Powell and Young said the deal is tied to energy prices but includes a "price smoothing" mechanism that will help Vermont ratepayers and Hydro-Quebec, which was involved in a recent refund to Vermont, avoid price shocks due to volatility in energy markets.

While CVPS and GMP were the lead negotiators and signatories with Hydro-Quebec, Vermont's smaller utilities will get shares of the power as well, similar to a utility-wind farmer deal over interconnections, officials said.

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