Vermont's two largest utilities signed a memorandum of understanding with provincial utility Hydro-Qu bec that sets the stage for a new power supply contract for Vermont customers.
Vermont Gov. Jim Douglas hailed the accord, which he said would be good for Vermont and Qu bec.
"Reaching a new long-term agreement with Hydro-Qu bec is a good deal for ratepayers and strengthens the state's economic future," Douglas said. "This new contract will provide stable, clean, renewable power at a competitive price through 2038."
Central Vermont Public Service and Green Mountain Power seek similar volumes to what they receive from Hydro-Qu bec and to make power available to other Vermont utilities.
Under the MOU, the term sheet is confidential to protect market-sensitive information, but the companies announced that they anticipate purchases totaling up to about 225 megawatts starting in November 2012 and ending in 2038. The term sheet includes a price-smoothing mechanism that will shield customers from volatile market spikes over this period.
Under the accord, announced at a meeting with Premier Charest and Gov. Douglas, CVPS, GMP and Hydro-Qu bec will negotiate final terms of the agreement over the next few months. The final 26-year agreement is expected to provide broad, scheduled energy delivery at a good value for customers.
"The market is extremely volatile, with tremendous highs and lows," the companies said. "The contract will tend to keep Vermont's purchases near the middle of the market, protecting Vermont consumers from the highest price swings and Hydro-Qu bec from the lowest price swings."
Powell said, "A major component of our energy strategy, Vermont and Qu bec have had an energy partnership for a long time. Energy trading between Vermont and Qu bec has been an important component of Vermont's energy supply since the early 1980s, when longer-term power deals were inaugurated. The current Vermont-Hydro-Qu bec contract, which was signed on Dec. 4, 1987, expires in 2016.