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.”
