CVPS to Purchase Vermont Marble Power Division
May 04 2010 - 10:00AM
Marketwired
Central Vermont Public Service (NYSE: CV) today announced that it
will purchase the assets and service territory of the Vermont
Marble Power Division of Omya Inc. for $33.2 million.
Included in the sale are rights to serve about 890 customers in
Proctor, including the Omya industrial facility in Florence, which
will become CV's single-largest customer. Significantly, the sale
also includes four hydroelectric facilities with a combined
capacity of 18.1 megawatts.
"This purchase will create economies of scale that will benefit
all of our customers, and will lead to expansion of the generation
output from the four Vermont Marble dams through increased
investment," CVPS President Bob Young said. "It maintains Vermont
control over the plants, which produce clean, reliable energy, and
expands CV's role as the operator of the largest fleet of renewable
hydroelectric generators in the state."
Young said there would be significant benefits to the
purchase:
- It continues the state-supported consolidation of Vermont's
electric utilities, creating further economies of scale.
- CV will invest in upgrades and repairs that will improve
hydroelectric output from the plants. CV plans to invest $12
million to upgrade the Vermont Marble facilities and operate them
in consort with CV's existing Otter Creek hydro operations.
- CV will invest in the Vermont Marble system, immediately
replacing the main substation at the Proctor hydro site and
spreading the approximate $1.5 million cost over CV's 159,000
customers rather than just Vermont Marble's customers.
- CV will be able to provide Proctor residents and businesses
with greater resources. For example, in the event of major storms,
CV has nearly 30 line workers within an hour's drive of
Proctor.
- CV offers choices and services Vermont Marble customers don't
have today, including automatic bill payments through CVPS
Electripay, on-line bill payments, CVPS Cow Power™, various rate
choices, budget billing, on-line bill review and outage
information, and in the near future, CVPS SmartPower™, an advanced
automated meter reading, outage detection and power management
system.
"We welcome the opportunity to serve the people and businesses
of Proctor that we don't currently serve," Young said.
Other than industrial rates, Vermont Marble currently has the
lowest rates in Vermont, largely because the company has subsidized
residential customers for decades.
Vermont Marble recently filed a rate case and rate redesign
proposal which may increase residential rates increase up to nearly
24 percent absent the sale. Additionally, Vermont Marble said it
has told state regulators it will need further increases if it
maintains ownership of the company over the next couple of years,
in part due to the substation work that is needed.
Depending on how the rate design portion of Vermont Marble's
case is concluded, small commercial and streetlighting rates may be
higher than CV's rates. Residential customers are likely to pay
more with CV, but the impact is unclear pending outcome of the
Vermont Marble case, which will conclude before the sale.
"Even for those customers who pay more, I believe CV will
represent a good value," Young said. "We continue to offer rates
that are among the lowest of any major utility in the Northeast. We
continue to score extremely high in customer satisfaction studies
conducted by J.D. Power and Associates, and we continue to excel in
customer service and reliability, meeting all of our 17 service
quality and reliability standards for six straight years -- the
best record in the state."
The reliability of power to VMPD's customers will remain
consistent as the transaction takes place.
The sale, expected to be completed by year-end 2010, is subject
to the approval process set forth by the Vermont Public Service
Board. The transaction also requires approval of the Federal Energy
Regulatory Commission.
Contact: Steve Costello (802) 747-5427 work (802) 742-3062
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