The US Senate has voted unanimously to nullify an ongoing power supply contract signed by 15 US utilities with Hydro-Québec (HQ) in 1990. Supporters of the Senate decision said the measure would save consumers in the state of Vermont over US$340M during the remaining 16 years in the contract. About a third of Vermont’s power supply comes from Hydro-Québec. The measure, which will take effect next fall at the earliest, is considered to be a bargaining ploy by the Vermont utilities to pressure HQ to renegotiate the existing power purchase agreement (PPA). This ties the utilities into paying twice the current market rate for electricity. In spite of many overtures by the Vermont utilities, HQ has refused to renegotiate the deal. Vermont utilities signed the PPA in 1990, believing they were locking in low electricity rates before prices surged. But power prices fell, putting Vermont on course to have some of the highest rates in the US by 2000.
Green Mountain Power Corporation,Vermont’s second largest power company, posted its first annual loss in at least four decades in 1998. The state’s largest utility, Central Vermont Public Service Corporation, says its customers could save a combined US$19M a year by buying power at current market rates.