CVPS Signs Two Power Contracts -- Fills Portfolio for 2012
August 01 2011 - 8:38AM
Marketwired
Central Vermont Public Service (NYSE: CV) has signed two new power
supply contracts, filling the 2012 gap in its portfolio created by
the end of the existing contract with Vermont Yankee, at attractive
prices.
"These contracts serve to ensure our reliable power supply
through the end of 2012 at very competitive prices," CVPS President
and CEO Larry Reilly said. "We were able to secure contracts at
firm prices -- where performance is guaranteed such that the
sellers would pay to replace any power should they otherwise fail
to deliver."
CVPS, in cooperation with World Energy Inc., an energy
management services firm, conducted a highly structured Internet
auction that involved approximately a dozen prescreened
northeastern generators and energy marketers in bidding to provide
CVPS's needed supplies. When the bidding closed, CVPS signed two
contracts with an average price of approximately $47.50 per
megawatt-hour, or 4.75 cents per kilowatt-hour.
The contracts will provide about 570,000 megawatt-hours of
energy, or about 20 percent of CVPS's power supply during the life
of the contracts, for $27 million.
"In a circumstance such as this, we have found that employing a
competitive auction process obtains the best deals for our
customers," said Reilly. "These purchases will help us remain among
the lowest-cost utilities in New England, despite cost pressures
from infrastructure upgrades, particularly from transmission
improvements and higher-cost, new renewable power content
requirements."
One contract is for energy supplied 24 hours per day from April
1, 2012 through the end of next year, while the other contract will
provide peak and off-peak power during specific periods when CVPS
had remaining supply gaps next year.
The contracts will also fill CVPS's energy needs during the
planned Vermont Yankee refueling outage this fall. Some of the
energy will be purchased for as little as $39 a megawatt-hour, or
3.9 cents per kilowatt-hour. CVPS currently pays Vermont Yankee 4.4
cents per kWh, and Hydro-Quebec about 6.2 cents per kWh. Market
prices, though generally, relatively low of late, were as high as
several hundred dollars per megawatt-hour during the recent heat
wave.
The contracts are for so-called "system power," meaning they are
not conditioned on the operation of individual power generation
sources. Because CVPS plans to conduct similar auctions in the
future and bidders were unknown to each other, the names of the
winning bidders and full details of the process will remain
confidential.
The new contracts join several other longer-term agreements CVPS
has signed to replenish its portfolio after the current Vermont
Yankee and Hydro-Quebec contracts end. CVPS has signed new
contracts largely for renewable energy from Hydro-Quebec, wind
farms in Coos County, N.H., and southern Vermont, and a Gilman,
Vt., hydro project.
CVPS is also in the process of purchasing the Vermont Marble
Power Division of Omya, including four hydroelectric facilities
with a current combined capacity of 18.5 megawatts, which CVPS
plans to upgrade. After the acquisition, CVPS will own and operate
the largest fleet of hydroelectric generating stations in New
England. In large part due to its electricity supplies, Vermont has
the lowest per-capita air emissions in the country.
CVPS continues to expand its Cow Power generation; recently
built a 50-kilowatt solar project on Route 7 in Rutland Town; and
upgraded a Passumpsic River hydro facility in St. Johnsbury.
Contact CVPS: Steve Costello (802) 747-5427
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