November 14, 2008
Three Utilities Solicit New Energy Contracts
Vermont's three largest electric utilities today issued a joint request for new power supply resource proposals, casting a wide net across the Northeast and Canada, and the state's two largest utilities issued an additional request for bids to supply more energy in case Vermont Yankee is unavailable.
Central Vermont Public Service (NYSE: CV), Green Mountain Power and Vermont Electric Cooperative said today's solicitations would be the first of several staggered RFPs issued over the next couple of years.
In one RFP, the utilities are jointly seeking up to 100 megawatts of energy, up to 40 megawatts each for CVPS and GMP, and 20 megawatts for VEC. In the second RFP, CVPS is seeking an additional 100 megawatts and GMP an additional 50 megawatts. The utilities expect to issue RFPs in 2010 and 2011 as well, to stagger the start and end dates of various portfolio components.
"This is part of our broader integrated resource planning efforts, which are designed to ensure we continue to provide safe, clean, reliable and affordable energy in the years ahead," the utilities said in a joint statement. "As a state, we enjoy arguably the cleanest power supply in the country, with rates that are the lowest in the Northeast. Our power-planning efforts are intended to preserve those competitive advantages to the greatest extent possible."
The three companies rely heavily on energy from Hydro-Quebec and Vermont Yankee, but contracts with both suppliers end between 2012 and 2016. Vermont Yankee's license, which expires in 2012, is being considered for renewal. While contract negotiations are under way for new power supplies with both those suppliers, the utilities are also planning to take this opportunity to diversify their portfolios in the years ahead.
CVPS, GMP issue second request
The second RFP by CVPS and GMP for 150 megawatts of new energy is contingent on the outcome of Vermont Yankee relicensing and contract negotiations.
"We want to be prepared in the event Vermont Yankee is not relicensed, or negotiations fail to produce an acceptable power contract," CVPS President Bob Young said. "Last fall, I made a commitment to legislators that I'd come back to them in January with information on the cost impacts if we were to lose Vermont Yankee, and this request for bids will help us understand the scale of that impact."
Young and GMP President and CEO Mary Powell said they continued to view Vermont Yankee as a solid, reliable and affordable asset, but issued the RFP to help prepare for the possibility of its loss.
"Vermont Yankee provides us power that has low emissions and is very reliable," Powell said. "Assuming it can pass state and federal reviews, we hope it will continue to be an option, but we must prepare for a different outcome."
Several factors to be weighed
The utilities said that among the factors to be considered in both RFPs are price, volatility or stability, fuel diversity, environmental attributes, the results of the state's public outreach process and reliability.
"Regardless of the outcome of the VY debate, we want to expand the pool of potential suppliers to ensure the best power mix possible," the utilities said. "We may each weigh the value of the proposals differently, but we will give added weight to reliable, renewable and stably priced proposals. Each company will make its own decisions about accepting or rejecting the proposals, but we all put extra value on non-fossil, renewable supplies from diverse sources."
"Fuel diversity and credit requirements will be considered," the utilities said. "Energy from small or medium-sized renewable projects will be given more weight than energy from large fossil fuel plants. New projects that can defer or supplant the need for transmission and distribution expansion or upgrades will be favorably evaluated."
The RFPs are just one of several activities the utilities are taking to ensure a solid energy future for Vermont. CVPS, GMP and VEC, along with Washington Electric Cooperative and VPPSA, sponsored a study of the possibility of building a new in-state generator, and all the companies are working to develop renewable energy such as CVPS Cow Power(TM) and Greener GMP.
The RFPs are being distributed to all New England Power Pool participants, power suppliers and developers, which includes dozens of companies in the region. "Our hope is to notify winning bidders in late March," the utilities said.
More information about participating in the RFPs can be found at www.cvps.com.
Contacts: CVPS: Steve Costello (802) 747-5427 GMP: Dotty Schnure (802) 655-8418 VEC: Kathryn Kantorski (802) 730-1129
SOURCE: Central Vermont Public Service