State studies dam purchase

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(Host) A state panel has hired a consulting firm to study the possibility of Vermont buying six hydro dams on the Connecticut River. The Vermont Renewable Power Supply Acquisition Authority on Wednesday selected the Lexecon Company of Cambridge, Massachusetts to do the sophisticated economic analysis of the potential deal.

Senator Vince Illuzzi of Essex and Orleans counties is a member of the state authority and an advocate of public power.

(Illuzzi) “We needed to take this first step. It’s a significant first step, because essentially Lexecon will analyze the income and expenses of the hydro assets and then give us some sense on where we can get financing, how much income we can expect.”

(Host) The company that owns the dams, PG & E National Energy Group, filed for bankruptcy last month. According to Illuzzi, it’s not yet clear whether the company will be forced to sell its hydroelectric assets to pay creditors. At their maximum output, the dams can produce about 500 megawatts. Illuzzi says a key job for Lexecon will be to analyze the wholesale power market.

(Illuzzi) “Obviously, they’ve acknowledged and we’ve acknowledged all along that the dicey part is how we can, how do we finance the purchase when the power is sold on the spot market, when the price for kilowatts varies every 10 minutes.”

(Host) The Legislature last winter set aside $250,000 for the feasibility study. The state hopes to have an initial report by late October, with the final study due on December 1.

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