CVPS Plans Purchase of VEC's Southern Vermont Territory
July 28 2006 - 9:43AM
Business Wire
Central Vermont Public Service (NYSE: CV) will purchase the
southern Vermont franchise territory of Vermont Electric
Cooperative under an agreement designed to rationalize service
territories and lower local electric rates. Under the agreement,
which must be approved by the Vermont Public Service Board, CVPS
will acquire VEC's southern Vermont assets and the rights to serve
2,770 customers, who will on average save about 8.1 percent under
CVPS ownership, even after a pending 6.15 percent rate case is
complete. "This agreement consolidates service territories and
provides CVPS with important growth," President Bob Young said. "It
will reduce local rates, and strengthens CVPS by providing new
revenue and a wider base to allocate fixed costs." VEC Chief
Executive Officer David Hallquist said the sale made sense for the
co-op, as it would provide significant cash, while divesting a
service area far removed from most of VEC's territory, which is
primarily in northern Vermont. CVPS will pay approximately $4
million for VEC's southern Vermont assets and territory. "This area
is virtually centered between CVPS's Springfield, Brattleboro and
Sunderland offices," Hallquist said. "It makes more sense for CVPS
than VEC to serve it." Customers affected by the sale are in
Halifax and parts of Andover, Dover, Newfane, Townshend, Wardsboro,
Jamaica, Marlboro, Guilford, Vernon, Wardsboro, Wilmington,
Windham, Whitingham and Readsboro. Four of five VEC employees in
the region are expected to be hired by CVPS. CVPS plans to maintain
the current VEC service office in Wilmington. When the sale is
completed, the former VEC customers will be covered by CVPS's 17
SERVE Standards, which measure everything from reliability to
customer service, and are reported to state regulators. SERVE
stands for Serving Everyone with Reliability, Value and Excellence.
The new customers will also be eligible for all CVPS programs,
including even monthly billing, Electripay and CVPS Cow Power(TM).
The purchase is the second announced by CVPS in recent months. CVPS
announced the purchase of Rochester Electric Light and Power, a
privately held, 900-customer company, in April. That purchase is
awaiting regulatory approval, which is expected this summer. CVPS,
founded in 1929, is Vermont's largest electric utility, serving
about 151,000 customers. More than 100 companies have merged into
CVPS since its founding. Forward-Looking Statements Statements
contained in this report that are not historical fact are
forward-looking statements intended to qualify for the safe-harbors
from the liability established by the Private Securities Litigation
Reform Act of 1995. Statements made that are not historical facts
are forward-looking and, accordingly, involve estimates,
assumptions, risks and uncertainties that could cause actual
results or outcomes to differ materially from those expressed in
the forward-looking statements. Actual results will depend, among
other things, upon the actions of regulators, performance of the
Vermont Yankee nuclear power plant, effects of and changes in
weather and economic conditions, volatility in wholesale electric
markets and our ability to maintain our current credit ratings.
These and other risk factors are detailed in CV's Securities and
Exchange Commission filings. CV cannot predict the outcome of any
of these matters; accordingly, there can be no assurance that such
indicated results will be realized. Readers are cautioned not to
place undue reliance on these forward-looking statements that speak
only as of the date of this press release. CV does not undertake
any obligation to publicly release any revision to these
forward-looking statements to reflect events or circumstances after
the date of this press release.
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