Power suppliers hope to have contracts by end of year

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(Host) As the Vermont Legislature sets an ambitious agenda on energy issues, many of the ultimate decisions on where our power comes from in the future will be made by Vermont’s utilities.

The state’s two major power companies are negotiating new contracts with Hydro Quebec and Vermont Yankee. They hope to have both contracts signed by the end of the year.

VPR’s John Dillon reports:

(Dillon) Inside the Statehouse, there are many skeptics of the Vermont Yankee plant. Senate President Peter Shumlin – whose district includes the plant – is a frequent critic.

But the state’s two major utilities – and the Douglas Administration – are hoping for future power contracts with Vermont Yankee.

(Young) “I think we will have a contract negotiated by the middle of this year.”

(Dillon) Robert Young is the CEO of Central Vermont Public Service Corporation, the state’s largest electric utility.

Vermont Yankee’s license expires in 2012. It wants a 20 year license extension. Utility regulators, and state lawmakers, will rule on that request.

Young says it’s important to have a new deal on the table long before 2012 for lawmakers — and regulators — to consider.

(Young) “We would want to be assured that the plant operates safely before we would certainly have it in the fuel mix for our customers. Assuming that that is proved to be the case, then we think having Vermont Yankee as an alternative for us in our planning would be a valuable thing.”

(Dillon) Combined, Vermont Yankee and Hydro Quebec supply about two-thirds of Vermont’s electrical energy. Yankee’s license runs out in four years; the Hydro Quebec contracts begin to expire in 2015. So for the past year or so, Vermont utilities have been working behind the scenes on replacement contracts.

In recent years, both Hydro Quebec and Vermont Yankee have brought relatively stable rates for consumers. Young says the provincial utility is willing to sign a long-term contract, but that may not be the best choice for Vermont’s energy portfolio.

(Young) “So we’re thinking with Hydro Quebec of a more flexible kind of contract. Some of it might be quite long term in nature. And some of it might be relatively short term.”

(Dillon) Chris Dutton is president of Green Mountain Power, the state’s second largest electric utility. He’s in Phoenix this week – attending the same conference for utility CEOs as Bob Young.

Dutton is well aware of the legislature’s focus on energy issues, especially its effort to reduce the state’s greenhouse gas emissions. He says Vermont can’t maintain its light carbon footprint, without Vermont Yankee.

(Dutton) “You’re not going to replace Vermont Yankee power with wind power. You’re not going to replace Vermont Yankee power with in-state hydro. You’re not going to replace Vermont Yankee power – because of its base load nature – with significant demand side management investment. You’re going to replace it almost certainly with significant fossil generation.”

(Dillon) Governor Jim Douglas is also a big supporter of Vermont Yankee, although he recently changed his mind and said the plant should undergo an independent safety assessment.

Douglas was asked at a recent news conference if he has a back-up plan, should the plant not pass its safety assessment.

(Douglas) “I don’t at this point. Let’s see what the safety assessment says. And we’re four or five years away from the expiration of the license.”

(Dillon) A leading environmental group says it’s irresponsible for Douglas not to plan ahead for Yankee’s shutdown in 2012. James Moore is an energy specialist with the Vermont Public Interest Research Group.

(Moore) “We’ve known for a long time that Vermont Yankee’s license to operate ends in 2012. It’s an old facility. It’s 40 years old at that point.So the fact that the governor hasn’t been planning for any kind of alternatives is disappointing, to say the least. And we’re going to be looking to the legislature, and the governor, to step up, and start planning for the future that we know is around the corner.”

(Dillon) Moore and other environmentalists say the state can replace Vermont Yankee through investments in renewable energy, and energy efficiency. He says any short term gap can be filled by buying power in the market.

Vermont utilities are also looking at new generation within Vermont. They’ve launched a feasibility study for a new power plant that would generate up to 200 megawatts.

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


AP Photo/Toby Talbot

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