Hydro-Quebec plant
Editor’s note: In the continued back-and-forth of the race for governor, Lt. Governor Brian Dubie recently charged that Senate President Pro Tem Peter Shumlin’s timing in calling a vote on Vermont Yankee weakened Vermont utilities’ negotiating position on their contract with Hydro Quebec. But he’s also praised the final contract. Carl Etnier reports. Listen to the audio: Dubie on the Hydro-Quebec contract.
In an appearance last month, Lt. Governor Brian Dubie charged that Senate President Pro Tem Peter Shumlin’s decision to call a vote on Vermont Yankee in February weakened Vermont utilities’ negotiating position on their contract with Hydro Quebec. Speaking at LEAF, the Local Energy Alternatives Festival in Bradford on Sept. 18, Dubie described his visit in Quebec with the presidents of Green Mountain Power and Central Vermont Public Service in February, at the time of the senate vote.
Dubie told the audience: “The president of Green Mountain Power testified that the timing of the vote weakened our negotiating position with the largest contract we’ve ever signed.”
The contract deal, inked in August, runs for 26 years and starts out with a rate of 6 cents per kilowatt-hour. The price will be tied to the electricity market. The deal includes a price-smoothing mechanism that is supposed to protect consumers against sudden cost spikes.
Mary Powell, president of Green Mountain Power, says that she has not “testified” anywhere about the effect of the vote on their negotiating position.
Mary Powell, president of Green Mountain Power, says that while she has not “testified” anywhere about the effect of the vote on their negotiating position, she had a private conversation about the timing of the Vermont Yankee vote with Dubie.
“Whenever you’re negotiating with a counterparty, it’s always useful to have as many other counterparties looming on the horizon as potential other sources,” Powell said. “If you’re looking at it from that one particular lens, it wouldn’t have necessarily been something that would have been helpful.”
Powell added that she is very satisfied with the final Hydro-Quebec contract. “The proof is in the result, in the contract that we got. It was a really good deal for Vermont.”
Utility officials and top state politicians — including Dubie — were enthusiastic about the deal at the time. Leaders in the energy industry have said Vermont’s contract with the Canadian wholesale energy supplier is advantageous for ratepayers.
Peter Shumlin, the Democratic candidate for governor, disagrees that the vote could have affected the outcome of negotiations.
“It’s interesting that almost everybody has praised the Hydro-Quebec contract as a good deal, which I believe that it is,” Shumlin said. “We’re in a competitive electric market right now. Had the utilities not negotiated the deal with Hydro Quebec, there was a lot of other competition out there at this time, since there’s more power on the market than we can buy at this moment.”
Shumlin said the contract with Hydro-Quebec is a better deal for Vermonters than the best rate offer the state’s utilities have received from Vermont Yankee, should it remain open after its scheduled shut-down date in 2012.
“It’s clear that the offer from Entergy Louisiana of 6.4 cents a kilowatt-hour was too high, which is why Green Mountain Power and CV rejected it, and what surprises me is that Brian pretends that we turned down some great deal from Entergy Louisiana,” Shumlin said. “It was a terrible deal, just on price — forget all the other problems. And as Mary Powell will tell you, that’s why Green Mountain Power and others rejected the deal. So if it was a terrible deal, Hydro Quebec could certainly understand that they needed to offer a better one, and they did.”
Rich Sedano, director and principal of the consulting firm Regulatory Assistance Project, has worked with utility contracts across the nation, including 16 years at Vermont’s Department of Public Service, where he was commissioner under Gov. Howard Dean. Sedano calls Dubie’s statement “a little dramatic.” He concurs with Shumlin’s comments on the abundance of power contract possibilities, even if many of them would not seem as green as power from Hydro Quebec.
The Hydro Quebec contract, Sedano says, was “under negotiation for quite some time before the vote on Vermont Yankee. And basically I think the issues surrounding Vermont Yankee were in the air through much of the period of the negotiation. It’s hard for me to imagine that [the Senate vote] would have made any difference.
“And also, there are lots of sources of power from independent power producers in New England,” Sedano said. “It’s true that many of them are fossil fuel producers, and Hydro Quebec perhaps is aware that Vermont would place a premium on non-carbon sources, but there are many competitors that Vermont utilities could turn to, and that in itself serves as a brake on where the prices were going to go. It certainly offered the Vermont utilities an opportunity to be able to walk, if the deal was not to their satisfaction.”
When the Hydro-Quebec contract was announced in August, Gov. Jim Douglas said: “This agreement ensures that Vermonters will continue to enjoy clean energy at a competitive price for the next 26 years.”
Dubie issued a congratulatory statement in August. “This contract is great news for Vermont’s workers, the small businesses and farms where they work, and seniors on fixed incomes… It’s very rewarding to see these eight years of cooperation between Vermonters and Quebecers, on many levels, now coming to fruition in an energy contract that promises a stable, green, renewable energy supply for Vermonters and Vermont jobs.”
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In a private conversation Mr. Dubie was told IBM was leaving Vermont. They’re not.
In a private conversation Mr. Dubie was told that Mr. Shumlin is going to let violent criminals out on the street. He is not.
In a private conversation Mr. Dubie was told that the vote on VY had a negative affect on the negotiations with HQ. It did not.
Draw your own conclusion.
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The conclusion I draw, Mr. Stannard, is that you have never been robbed by a junkie, as I have; you have not read the statements by Mary Powell that the Senate vote did make negotiations harder, as I have; and that you have not been listening to senior IBM execs plead for VY to get relicensed so that they can stay competitive, as I have.
You disbelieve everything VY says in its press releases; why are you so credulous as to believe everything you read from corporate IBM? Especially when they did not actually deny a possible move, but just denied making a public statement about it. BIG difference.
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Brian, do you really think nuclear energy comes down to dollars and cents? Nuclear energy goes way beyond dollars and cents.
Balancing nuclear energy in dollars and cents is be like invading Iraq and Afghanistan for dollars and cents.
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The contract that Vermont utilities have with Hydro-Quebec, HQ, is a good for Vermont and good for the environment. The cost per kWh of HQ hydro power is 3 -7 times lower than the cost per kWh of power from renewables, as per VT-DPS and US Department of Energy reports.
Whereas HQ charges 6.4 cents/kWh to the utilities, the consumer average price is about 12.5 cents/kWh because of distribution and utility costs.
Low-cost, hydro power will make Vermont more competitive, whereas high-cost renewable power will make Vermont less competitive.
It is a good thing that the Vermont legislature finally reversed itself and called hydro power a renewable power, as does the rest of the world. Otherwise it would have been very expensive and detrimental to Vermont’s economy and people’s standard of living for Vermont to reach the official goal of 25% renewables by 2025.
The reason for the plentiful supplies of electricity is because of the
- Great Recession,
- 1%-2% growth rate of the economy, despite an increasing population,
- high unemployment that dampens consumer spending and inflation. Households and businesses are tightening their belts, turning off lights not in use and changing light bulbs.
- abundance of natural gas. For the next several decades, electricity prices will likely not go up as much as the dire predictions that are still floating around, because of the abundance of natural gas. Electricity spot power prices closely track natural gas prices.
The Big Three, coal, gas and nuclear provided 44.9%, 23.4% and 20.2% of US power in 2009, respectively; The coal percent is steady or shrinking, the gas percent is rising, the nuclear percent is steady.
Hydro, biomass, wind, oil, geothermal and solar provided 7%, 2.7%, 1.8%, 1%, 0.37% and 0.072% of US power in 2009, respectively. Big Wind power is by far the most rapidly rising renewable, because it is the least costly renewable and nearly competitive with the power from new coal plants and new gas plants.
Total US power consumption was 3,955 billion kWh in 2009, of which ISO-NE power was 130 billion kWh and Vermont power was 6 billion kWh.
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Mr. Dubie has had the reputation as a “nice guy” within the Republican party, as compared to his party members in Congress.
The Republicans are all for the “free market” and are against “government-run” businesses (i.e. healthcare, mortgages). Some in his party think President Obama is a “Socialist”. Check this out:
http://www.hydroquebec.com/en/index.html
“Hydro-Québec generates, transmits and distributes electricity +”
“Its sole shareholder is the Québec government. The company uses mainly renewable generating options, in particular hydropower, and supports the development of wind energy through purchases from independent power producers. It also conducts research in energy-related fields such as energy efficiency.”
I guess it is OK to negotiate with “government-run utilities”, as long as the price is right (6 cents per kilowatt-hour)!
So our electricity going forward will be comprised of “socialist” hydro-power. At least it is considered “renewable”!
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Heedless of the slings and arrows, Brian Dubie is telling the hard truth about the consequences of closing Vermont Yankee. First truth: IBM senior execs say job losses will happen if VY closes. He never said they issued a press release about it – he said he was told by a senior person. Of course the company will say, “we never issued a press statement about this.” There is a willful obtuseness about the statements of Mr. Stannard, etc. when they say “IBM denies.” This obtuseness tells me they don’t really care if IBM leaves, just so long as VY goes with it.
Second hard truth: HQ played harder to get after the VY Senate vote. Mary Powell denies “testifying” on this subject but admits the fact that Vermont had less leverage with HQ after the incredibly poorly timed Senate vote led by “the people’s man”, Peter Shumlin.
Dubie is warning us of the storm clouds on the horizon. Mr. Stannard, Mr. Shumlin, maybe your financial houses are so well protected that you don’t have to worry about paying higher rates with less income. But for the rest of us – myself included – we are glad that there is a true leader like Brian Dubie who is connecting the dots and trying to act in the state’s best welfare.