Vermont utilities reach new power deal with Hydro-Quebec

Vt. utilities enter deal with Quebec

MONTPELIER, Vt. — Two Vermont utilities signed an agreement Thursday on a 26-year deal to buy power from Canadian provincial utility Hydro-Quebec, replacing contracts that expire beginning in 2012.

The deal is among Green Mountain Power Corp., Central Vermont Public Service Corp. and Montreal-based Hydro-Quebec, which already provides about one-third of Vermont’s electricity and would continue to do so. The power price wasn’t revealed.

Under a “memorandum of understanding” signed Thursday, the Vermont utilities would buy up to 225 megawatts and use a “price-smoothing mechanism” that would shield customers from market price spikes during the length of the deal.

In addition, the utility companies said they would press Vermont lawmakers to enact legislation designating large hydro — including Hydro-Quebec power — as renewable energy, with any resulting credits shared by the three companies. But the deal doesn’t hinge on this designation.

The contract would take effect in 2012 and run through 2038. The current Vermont-Hydro-Quebec contract was signed Dec. 4, 1987. It expires in 2016.

“This new contract will provide stable, clean, renewable power at a competitive price through 2038,” said Gov. Jim Douglas, who announced the agreement alongside Quebec Premier Jean Charest at a news conference in Quebec City.

Under a bill before Vermont lawmakers, electricity from large Quebec dams would qualify as sources of renewable energy.

Bob Young, the president of Central Vermont Public Service Corp., and Mary Powell, his counterpart at Green Mountain Power, hailed the agreement.

“This agreement sets the stage for a new contract that will help us maintain what is arguably the cleanest power supply in the nation, while ensuring a relatively stable and affordable future for our customers,” they said in a joint news release.

“It continues a relationship that has helped us provide competitive rates in the Northeast, with minimal air and greenhouse impacts. This is an enormous step forward as we continue to plan Vermont’s energy future,” they said.

The Vermont utilities have been negotiating with Hydro-Quebec for more than a year, but the issue has gained urgency in light of recent developments at Vermont Yankee nuclear power plant.

The plant, which reported a leak of radioactive tritium Jan. 7 that has yet to be stopped, is scheduled to close when its license expires in 2012, although owner Entergy Corp. has applied for a 20-year extension.

Vermont’s state Senate voted Feb. 24 to close the plant in 2012, but that vote isn’t binding by itself.

“It’s encouraging that our utilities are moving forward with power planning after 2012,” said James Moore, clean energy advocate for Vermont Public Interest Research Group. “It’s clear that there are affordable options to Vermont Yankee and apparently Hydro-Quebec is likely one of them.”

Under the memorandum, the three companies have until June 30 to agree on “material terms” and to execute it by July 31.