Experts Say Canadian Firms May Want Control Over Transmission Grid

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(Host) The bidding war for Central Vermont Public Service Corporation is more than a contest for who controls the state’s largest electric utility.

The takeover fight also shows a regional rivalry between two strong Canadian energy companies. And analysts say the winner may try to gain further inroads into the New England market.

VPR’s John Dillon has more:

(Dillon) The battle between Gaz Metro of Montreal and Fortis of St. John, Newfoundland, for the control of CVPS means that the Canadian firms may have their eye on more customers to the south.

That’s because by acquiring CVPS, the winner would get a big stake in VELCO, the company that runs the statewide transmission grid.

(Sedano) "Well, there’s been evidence for decades that VELCO and the two large Vermont utilities have been seen as a corridor for Canadian power."

(Dillon) Richard Sedano is a former commissioner of the Public Service Department, the state agency that represents consumers. Sedano cautions that’s it a high-stakes business to build a major transmission line.

But he says Vermont’s location between natural gas and electricity supplies in Canada and markets in southern New England cannot be overlooked

(Sedano) "And certainly Canadians might see the strategic value in that most vividly and want to put themselves in a position to benefit from that."

(Dillon) Vermont’s second largest utility, Green Mountain Power, is also owned by Gaz Metro.

Andy Weissman is a utility lawyer who has been following the maneuvering for CVPS from his position as publisher of Energy Business Watch, which tracks trends in electricity and natural gas markets.

(Weissman) "What often happens with Canadian companies is that they like to put a toehold into the United States in order to get some more experience, to understand what it’s like in order to operate a utility in this country, have some dealings with the regulatory commissions."

(Dillon) The competition between Fortis and Gaz Metro also shows the economic clout of companies north of the border. David Massell is a professor of history and Canadian studies at the University of Vermont. He says Americans tend to think of Canada as an appendage to the U-S economy. But that’s not true in this case.

(Massell) "In some ways, we are, at least a regional satellite and Canada in this case or the province of Quebec is the dominant influence."

(Dillon) There also may be regional rivalries at play in the contest for control of CVPS. Oliver Olsen is a state representative from Jamaica who traveled last year to Quebec and Newfoundland. Olsen spoke to utility officials in both provinces and learned about the decades-long battle over hydroelectric resources in the far north.

(Olsen) "Newfoundland and Labrador have significant generating potential in Labrador along the border with Quebec. But the only way they can get that power to major markets is through Quebec and Quebec historically has used that leverage to their advantage and that has created quite a bit of tension."

(Dillon) Olsen suggests that one reason for the Gaz Met bid for CVPS is that a Quebec company could not stand by and watch a utility from rival Newfoundland establish a beachhead in New England.

For VPR News, I’m John Dillon in Montpelier.

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