Vermont and Quebec Reach New Energy Agreement
August 12 2010 - 11:30AM
Marketwired
Vermont's two largest utilities and HQ Energy Services (U.S.), a
subsidiary of Hydro-Québec, signed today a 26-year contract that
will provide renewable low-emission energy.
The contract, announced at a news conference attended by Vermont
Governor Jim Douglas and Québec Premier Jean Charest, was hailed by
utilities and officials from both governments.
"Our strong relationship with our friends in Québec is vital to
the economic well-being of Vermont. This agreement will help ensure
a clean competitively priced energy future for Vermonters," 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. Green Mountain Power
(GMP) and Central Vermont Public Service (NYSE: CV) have negotiated
an agreement that will benefit customers well beyond their service
territories, for which I am most grateful."
"Following the Vermont legislature's recognition of the
renewable nature of hydroelectricity, regardless of the capacity of
the power plants that produce it, this agreement marks an important
milestone in Québec and Vermont's on-going leadership in the fight
against climate change," said Charest. "For years to come, Québec
will maintain an important customer relationship for one of its
most valuable exports: hydroelectricity. This win-win agreement
will create revenues for Québec, contributing to the affluence of
its population and to the reduction of public debt. And thanks to
our decades-long energy partnership, Vermonters will continue to
benefit from a reliable, renewable low-emitting energy source."
Under the agreement, which will now go to the Vermont Public
Service Board for review, Vermont will purchase up to 225 megawatts
of energy, predominantly hydroelectricity, from HQ Energy Services
(U.S.) (HQUS) starting in November 2012 and ending in 2038. HQUS
markets electricity from Hydro-Québec's generating fleet, whose
output is 98% hydroelectric. The agreement includes a
price-smoothing mechanism that will shield customers from volatile
market prices. The price will start at approximately six cents per
kilowatt hour. The final price for deliveries starting in 2012 will
be set in December 2010. In addition, HQUS and the Vermont
utilities will share any future revenues related to environmental
attributes.
Other Vermont utilities have identified the amounts of power
that they intend to buy under this agreement, which was negotiated
by CVPS and GMP on their behalf. They will also be participating in
the review process before the Vermont Public Service Board.
"The agreement will ensure that the cost of this renewable power
from Québec remains linked to sustained market prices over time,
while ironing out the highest of the highs and the lowest of the
lows," CVPS President Bob Young and GMP President Mary Powell said
in a joint statement. "The price will be tied to inflation and
electricity market price indexes, ensuring we avoid price spikes,
and it will begin at a rate comparable to what we pay Hydro-Québec
today. This market-following component of the price will also
benefit our customers by adjusting downward in the event that
future power market prices decline. Overall, we believe it is an
attractive deal for Vermont, and are pleased to include other
Vermont utilities as well."
"We are very pleased to continue providing Vermonters with
reliable renewable low-emitting energy," said Thierry Vandal,
President and Chief Executive Officer of Hydro-Québec. "With this
agreement, Vermonters are helping ensure that they maintain their
commitment to renewable energy and minimize greenhouse gas
emissions. Like all successful longstanding relationships, ours
continues to be mutually rewarding."
Young, who recently announced plans to retire next May, said
completing the contract was one of his top goals for his final year
at CVPS. "We have made tremendous environmental gains over the past
decade, and this agreement will provide long-lasting environmental
benefits, especially compared to other baseload alternatives, which
are more expensive and would result in significant air and
greenhouse gas effects," Young said.
"At GMP, a key part of our energy strategy has been to pursue a
broader partnership with HQUS and lock in long-term supplies with
low economic and environmental costs," Powell said. "Today we can
proudly say we have achieved that goal. This will serve our
customers well."
Vermont has purchased energy from Québec for decades. In the
early 1980s, the first longer-term power deals were established.
The current Vermont-Hydro-Québec contract, which was signed on
December 4, 1987, phases out largely in 2016. The current contract
has proven to be a sound agreement for Vermont, helping GMP and
CVPS maintain clean portfolios and rates that are among the lowest
in New England.
The energy contract was negotiated by Central Vermont Public
Service (NYSE: CV), Green Mountain Power and H.Q. Energy Services
(U.S.) Inc., an indirect wholly owned subsidiary of Hydro-Quebec.
The other Vermont utilities that have confirmed their intent to
purchase energy under this agreement are Vermont Public Power
Supply Authority, Vermont Electric Cooperative Inc., Vermont Marble
Power Division of Omya Industries Inc., the Town of Stowe Electric
Department and the Burlington Electric Department.
Media contacts: Hugo D'Amours Press secretary
Office of the Premier of Quebec (418) 643-5321 David
Coriell Communications director Office of the Governor of
Vermont (802) 828-3333 Central Vermont Public Service Steve
Costello (802) 747-5427 Green Mountain Power Dorothy Schnure
(802) 655-8418 Ariane Connor Media relations Hydro-Quebec
(514) 289-5982
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