Utilities Formally Sign Contract With Hydro-Quebec For Power

AP Photo/Toby Talbot

From left to right, front, is Christian Brosseau of Hydro-Quebec, Robert Young of Central Vermont Public Service, and Mary Powell of Green Mountain Power. Behind them are Quebec Premier Jean Charest and Vermont Gov. Jim Douglas.

Vermont could also buy more from Hydro-Quebec if Vermont Yankee closes on schedule.

VPR's John Dillon reports:

(Dillon) The price of power under the deal will be pegged to the market, with provisions that will prevent wide swings either up or down.

Under the contract, Hydro-Quebec will supply 225 megawatts, slightly less than what Vermont power companies now buy under a contract that phases out in 2016.

Robert Young is CEO for Central Vermont Public Service. He says the initial price will be set in December and will probably start around 6 cents a kilowatt hour. The price will be re-set annually -either up or down - according to a formula that remains secret.

(Young) "Whatever that movement is will be tempered by an adjustment mechanism that doesn't allow the contract price in any given year to move beyond a certain bound, which I will not talk about for confidentiality reasons, but in effect puts a gating mechanism on the movement either up or down in any given year."

(Dillon) Young said that the utilities could also buy more electricity from Hydro-Quebec. That could prove useful if the Vermont Yankee nuclear power plant shuts down when its license expires in 2012. Yankee wants a new 20-year license but has so far failed to win legislative approval.

Visit VPR's Big Hydro: Going To The Source series page

Quebec Premier Jean Charest said the state-owned Hydro-Quebec wants to boost sales to New England.

(Charest) "We are building more capacity in Quebec. And the plan that we have now is develop a lot more capacity, both hydro, wind power, renewable energy. On our side, that means there will be more availability."

(Dillon) The contract signing ceremony in a hotel conference room took on the air of a celebration of the long-term relationship between Vermont and Quebec.

Premier Charest said he was gratified that the Vermont Legislature last spring designated large-scale hydro power as "renewable" energy. He said that will prove useful as states try to reduce greenhouse gas emissions by requiring that a certain amount of power comes from renewable sources.

(Charest) "In this agreement, what is significant for us is the state of Vermont is the first state in North America to not discriminate against large-scale hydro. And that will help us inspire other legislatures and hopefully the federal government of the Untied States to do the same."

(Dillon) But the Vermont Natural Resources Council, a statewide environmental group, said it was wrong to designate the Hydro-Quebec power as renewable because the large dams have damaged rivers in Quebec. VNRC also expressed concern that imports of electricity from large-scale hydro power projects could overwhelm the emerging U.S. market for renewable energy.

For VPR News, I'm John Dillon.

Note:  The deal with Hydro-Quebec is between Vermont's two largest utilities. But smaller utilities may also participate, including the Vermont Electric Cooperative, and the Burlington Electric Department.