State may take on private partner for hydro dam deal

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(Host) The state of Vermont may take on a partner to buy a series of hydro dams along the Connecticut River.

VPR’s Bob Kinzel reports.

(Kinzel) A special oversight committee has come to the conclusion that it’s not practical for the state of Vermont to try to buy these dams on its own. So the committee is now reviewing proposals from several potential private partners.

The situation is complicated because the owner of the dams, PG&E National Energy Group, is in bankruptcy, and there’s no guarantee that the assets of the company will be sold.

Administration Secretary Michael Smith, who’s the chairman of the special oversight committee reviewing this issue, says the state must take on a partner for this project if it wants to make a serious bid for the dams.

It’s projected that the dams could provide the state with roughly 20 percent of its overall energy needs:

(Smith) “We felt that with a partner we could reduce all of those – the risk, the cost, and the amount of power because in terms of the power, the power needs right now are not needed until 2012 or 2016. So those are the things we’re going to be discussing with any potential private partner.”

(Kinzel) Smith says the state is conducting some important research on this project; but he says it’s not certain that the dams will ever come on the market for sale:

(Smith) “There are three basic outcomes or scenarios that could happen, maybe there’s more. But one of the them is that U.S. Gen, which is the subsidiary of PG&E, comes out as an ongoing entity and everything remains the same. The other scenario could be that these dams along with the other assets, which are the fossil fuel assets in Massachusetts and Rhode Island, are sold as package. Of course we’re not interested in the fossil fuel plants. And thirdly would be the scenario that we have been looking at, is where it’s broken up and certain assets are for sale. So we just don’t know yet.”

(Kinzel) Smith says he expects the bankruptcy court to resolve the issues in this case in the next three to four months.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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