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Utilities Sign New Power Purchase Contracts

16 February 2010

 

 Successfully concluding a review of dozens of power supply proposals received after a broad request to the regional power market, Vermont's three-largest electric utilities today announced power purchase agreements with several suppliers that will diversify the utilities' power supply portfolios.

"These contracts provide a solid mix of clean, renewable energy and baseload power in keeping with Vermonters' preferences," Central Vermont Public Service, Green Mountain Power and Vermont Electric Cooperative said in a joint announcement. "We believe these contracts offer an excellent blend of price stability and reasonable costs, environmental benefits, reliability, fuel diversity, and will largely meet Vermonters' expectations."

"Our existing long-term contracts with Vermont Yankee and Hydro-Quebec have provided substantial economic and environmental benefits. The future of these expiring supplies is uncertain, but the agreements we announce today will help us ensure a stable and reliable power supply, and diversify our supplies even if VY and HQ are also available to us," the utilities said. "Some of these new sources are more expensive than our existing non-renewable power sources, but each will offer significant benefits to Vermont, and they are the most attractive options offered by the marketplace."

In November 2008, the three utilities, looking to diversify their power supplies and plan for the expiration of major contracts with Vermont Yankee and Hydro-Quebec between 2012 and 2016, issued two requests for proposals. In one RFP, the utilities sought up to 100 megawatts of power starting in 2012. The contracts announced today are the result of that RFP.

CVPS has signed three contracts to purchase:

 

* 30.3 percent of the output from the 99-megawatt Granite Reliable Power
  wind project, to be constructed in Coos County, N.H., for 20 years
  starting April 1, 2012;
* The entire output of Ampersand Gilman Hydro, a 4.99-megawatt hydro unit
  in Gilman, Vt., for five years starting April 1, 2012;
* 15 megawatts of round-the-clock energy from J.P. Morgan Ventures Energy
  for calendar years 2013 through 2015.

GMP has signed contracts to purchase:

 

* 25 percent of the output of the Granite Reliable Power wind project
  for 20 years starting April 1, 2012;
* 25 megawatts of round-the-clock energy from J.P. Morgan Ventures Energy,
  from March 2012 through December 2016.

VEC has signed contracts to purchase:

 

* 5 megawatts of energy from Merrill Lynch Commodities Group in a market
  strip of around-the-clock energy beginning Jan. 1, 2012 extending
  through Dec. 31, 2014;
* 5 megawatts of energy from Morgan Stanley in a market strip of
  around-the-clock energy beginning April 1, 2012 and extending through
  Dec. 31, 2014.

The "round-the-clock" contracts have resource characteristics roughly representative of the average mix of resources available in the ISO-New England market.

Also as a result of the RFP, the three utilities are considering the purchase of the output of a biomass project under development in eastern Vermont. A final decision is expected in the spring of 2010.

"These purchases will play a significant role in ensuring a smooth transition as our existing supply arrangements end," the utilities said. "Months of hard work paid off with these contracts, which include purchases of new renewable energy that Vermont policymakers and customers prefer."

The second RFP, issued by CVPS and GMP for 150 megawatts of new energy, is contingent on the outcome of Vermont Yankee relicensing and contract negotiations. Talks with respondents to the second RFP continue.

Several factors weighed

The utilities said that among the factors considered in both RFPs were price, price stability, fuel diversity, environmental attributes, reliability and the public preferences that were determined through the state's public outreach process.

The RFPs are among several activities the utilities are undertaking to ensure a solid energy future for Vermont. CVPS, GMP and VEC, along with Washington Electric Cooperative and VPPSA, also sponsored a study of the possibility of building utility-scale in-state generators, and the companies are working to develop renewable energy from cow manure, wind, solar and other sources. In addition, utilities are talking with other potential suppliers on an ongoing basis in order to secure a power supply portfolio in line with each of their respective needs and goals.

The RFPs were distributed to all New England Power Pool participants, power suppliers and developers. More than 1,800 megawatts of energy was bid into the process. 



 CVPS:
Steve Costello
(802) 747-5427

GMP:
Dotty Schnure
(802) 655-8418

VEC:
Kathryn Kantorski
(802) 730-1129