(Host) Rising energy prices may affect the state’s ability to buy a stake in a series of power dams along the Connecticut River.
VPR’s John Dillon reports:
(Dillon) Vermont officials announced last week that the state had found two partners to work with as it tries to buy a 25 percent stake in hydroelectric dams along the Connecticut River. The six power dams are owned by U.S. Gen New England, a subsidiary of National Energy and Gas Transmission Incorporated.
U.S. Gen filed for bankruptcy last summer, and a court last week approved a reorganization for the parent company. The plan essentially places the creditors – they’re mainly banks and institutional investors – in control of the corporation. It’s now up to the creditors to decide when, or if, to put the six Connecticut River dams up for sale.
But with energy prices relatively high, the dams may be worth more than they were a year ago when the state first started looking at the deal. Richard Sedano, a former state utility regulator, says the creditors may decide to operate the dams rather than sell them.
(Sedano) “It comes down to value. If they feel in the long run the value is in keeping the assets together, then they may try to figure out how to do that. Whereas if they feel that the best way to get value is to break them up, then they’ll do that.”
(Dillon) The dams, which generate about 470 megawatts, are considered a clean and renewable energy source.
The state last week reached an agreement to team up with two large, Canadian energy companies to bid for the project. The two companies – Brascan Corporation of Toronto and Emera Incorporated of Nova Scotia – are both multi-billion dollar energy firms.
Administration Secretary Michael Smith is chairman of the state power authority that’s looking into the hydroelectric deal. He says it’s better to have Brascan and Emera on the state’s side, rather than competing against them.
(Smith) “It allows us to align with two serious bidders and make the collaboration a very serious contender for these hydro assets in the region. So I think the state of Vermont is positioned well in the bidding process.”
(Dillon) Smith says there’s not much the state can do about the higher energy prices that could make the dams more valuable.
(Smith) “This is something we have to contend with all the time. The market is going to move one way or another whether you own them or don’t own them. These are not stationery sort of prices. These go up and down and fluctuate and were just going to have to react and be reactive when those sort of things happen. We’ll just have to wait and say how that affects the bidding process, if it does.”
(Dillon) Legislation that would set up a new power authority to manage the state’s interest in the dams is pending in the Legislature.
For Vermont Public Radio, I’m John Dillon.