BRATTLEBORO — Nearly four months ago, a working group began investigating what interest, if any, Vermont should take in TransCanada’s sale of 13 generating stations on the Connecticut and Deerfield rivers.
With a report due to four legislative committees by Aug. 1, the group’s efforts haven’t resulted in any plan of action. In fact, the state has not signed a confidentiality agreement that would give it access to all information about TransCanada’s proposed sale, which the company hopes to complete by year’s end.
Nevertheless, Vermont Secretary of Administration Justin Johnson says the state is making progress on the TransCanada question. Johnson, who heads the working group, said there are still possibilities for the state to partner with the dams’ eventual buyer — though it’s not clear who that will be.
“We’re not going to bid on the whole thing ourselves,” Johnson said. “We’re exploring the idea of partnerships.”
TransCanada is selling a number of its Northeastern U.S. power-producing properties to finance its recent acquisition of Houston-based Columbia Pipeline Group. In addition to the 13 hydro stations, the company is offering three natural gas-fueled plants in Rhode Island, New York and Pennsylvania and a wind turbine site in Maine.
TransCanada isn’t saying much publicly about the status of that effort, but it’s clear the timeline for getting a deal done is not lengthy.
“The sale process for our U.S. Northeast power assets has been launched, but we will not be providing any further updates until any agreements have been reached,” TransCanada spokesman Mark Cooper said. “We expect to close by the end of the year.”
Also unclear is the company’s proposed price tag.
The Vermont Energy Partnership — citing Johnson as a source — said on its blog last week that TransCanada wants more than $1 billion for its hydroelectric stations. But Johnson later told VTDigger that the $1 billion figure is only a rumor “that’s been floating around out there since the beginning of this.”
“What anyone’s prepared to bid, it’s anyone’s guess,” he said.
What’s clear is that the state — due to the sale’s accelerated time frame and the likely high asking price – is not prepared to independently make an offer for the TransCanada properties.
Rather, state officials are holding out hope that the state might enter into a partnership to “acquire some beneficial interest” in the generating stations, possibly through a power purchase agreement.
Johnson said there are “so many ways we could do an arrangement with a partner,” though he did not disclose details. “We have had some conversations with some potential partners, but we don’t have a partnership at this point,” he said.
He added that those discussions are the reason state officials have declined to sign a confidentiality agreement TransCanada has presented to potential bidders. “We have not signed the nondisclosure agreement, because it would limit us from talking with anybody,” he said. “We don’t really see the benefit of that.”
In addition to talking with partners, the hydropower working group has hired a consultant — Synapse Energy Solutions of Cambridge, Massachusetts — to assist with its studies. “They have a lot of experience with the value of energy markets and the pricing going forward,” Johnson said.
But he also acknowledged there isn’t much other news in advance of the working group’s report to four legislative bodies: the Senate’s Finance Committee and Natural Resources and Energy Committee, and the House Commerce and Economic Development Committee and Natural Resources and Energy Committee.
Act 130 from the Legislature’s 2016 session mandates that the working group provide that report by Aug. 1. The act also provided funding for the working group and set a structure that’s slightly different from the original group: For instance, the public service commissioner, or the commissioner’s designee, was added to the mix.
Johnson noted that the hydro study group’s efforts are expected to continue beyond Aug. 1. “This is, in some ways, handing over the first working group to the second working group,” he said.
Some legislators who will be on the receiving end of the hydro group’s initial report have differing takes on the state’s work so far.
Rep. Mike Hebert, a Vernon Republican who lives near a TransCanada hydroelectric station, is not pushing for the state to take any quick action on such a complex issue.
“I think, given all the variables and uncertainty, that we are moving at a cautious and reasonable pace,” said Hebert, who serves on the House Natural Resources and Energy Committee. “We must also answer the question: Should the state be in the energy generation business at all?”
Rep. Oliver Olsen, I-Londonderry, isn’t advocating for the state to get involved with the energy business either.
“It’s definitely very risky,” Olsen said. “People can always Monday morning quarterback and say, ‘Hey, if we bought these (dams) 10 or 15 years ago, they would have appreciated in value.’ You can do that with the stock market, too.”
Olsen said he’s not sure there was ever much appetite among state leaders to acquire any part of the hydroelectric business, despite Gov. Peter Shumlin’s declaration in April that the state may have “missed an opportunity” to buy the dams when they were available a decade ago.
“I have to say I’ve been a bit skeptical of this from the beginning,” said Olsen, who serves on the Natural Resources and Energy Committee. “My sense is that the working group was really structured to bring this to a soft landing.”
Rep. Laura Sibilia, I-Dover, said she’s glad the towns hosting TransCanada property have been able to express concerns about a sale — many of which are financial — through Windham Regional Commission.
No matter the outcome of the state’s hydro efforts, Sibilia believes it is “better to be involved in this discussion than not.”
“This is a huge power asset in Vermont,” said Sibilia, who serves on the House Commerce and Economic Development Committee. “Does it make sense for the state to be at the table? Absolutely.”
