Vermont and Quebec Reach New Energy
Aug 18, 2010 - Marketwire
Vermont's two largest utilities and HQ Energy Services
(U.S.), a subsidiary of Hydro-Quebec, signed today
a 26-year contract that will provide renewable low-emission
The contract, announced at a news conference attended
by Vermont Governor Jim Douglas and Quebec Premier
Jean Charest, was hailed by utilities and officials
from both governments.
"Our strong relationship with our friends in
Quebec 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
Quebec and Vermont's on-going leadership in the fight
against climate change," said Charest. "For
years to come, Quebec will maintain an important
customer relationship for one of its most valuable
exports: hydroelectricity. This win-win agreement
will create revenues for Quebec, 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-Quebec'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
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 Quebec 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-Quebec 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-Quebec. "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 Quebec for decades.
In the early 1980s, the first longer-term power deals
were established. The current Vermont-Hydro-Quebec
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
SOURCE: Central Vermont Public Service Corporation