YCQM - Mary Powell - Aug. 19, 2012 - WCAX.COM Local Vermont News, Weather and Sports-

YCQM - Mary Powell - Aug. 19, 2012

You Can Quote Me -- August 19, 2012 -- Mary Powell, the president of Green Mountain Power, joins Kristin Carlson and Darren Perron to discuss GMP's merger with Central Vermont Public Service, wind development and GMP's rate reduction.

TRANSCRIPT:

>> Announcer: FROM VERMONT'S
MOST TRUSTED NEWS SOURCE, WCAX
BRINGS YOU YOUR NEWSMAKERS, YOUR
NEIGHBORS.
THIS IS "YOU CAN QUOTE ME."
>>> GOOD MORNING AND THANKS FOR
JOINING US, EVERYONE.
OUR NEWSMAKER THIS SUNDAY
MORNING IS GREEN MOUNTAIN
POWER'S CEO MARY POWELL.
>> MARY POWELL, THANK YOU FOR
JOINING US.
>> IT'S MY PLEASURE, THANKS FOR
HAVING ME.
>> WE HAVE A LOT TO GET TO, BUT
LET'S START WITH AN UPDATE WITH
THE LOWELL WIND PROJECT.
A MASSIVE UNDERTAKING IN THE
NORTHEAST KINGDOM.
WHERE ARE WE, I UNDERSTAND WE
HAVE TURBINES UP.
>> ABSOLUTELY.
WE HAVE TURBINES UP, NOT FAR
FROM BEING COMMISSIONED, SO
ACTUALLY CONNECTED TO THE SYSTEM
AND GENERATING.
SO WE'RE PLEASED WITH THE
PROGRESS, WE'RE ACTUALLY AHEAD
OF SCHEDULE AT THIS POINT.
OUR GOAL WAS ALWAYS TO HAVE THE
TURBINES ONLINE BY DECEMBER 3rd
OF THIS YEAR.
RIGHT NOW, WE'RE CERTAINLY ON
TASK TO HIT THAT DEADLINE AND IT
LOOKS LIKE WE MIGHT ACTUALLY GET
THEM SPINNING A LITTLE BIT
BEFORE THE DUE DATE.
>> AND WE'RE TALKING 21,
CORRECT?
>> IN TOTAL, YEAH.
>> AND WILL -- AS EACH ONE COMES
UP, ARE WE CONNECTING THEM
INDIVIDUALLY OR DO WE WAIT UNTIL
ALL 21 ARE UP?
>> THE WAY THAT IT'S DONE,
ACTUALLY, IS THAT, YES, YOU
CONNECT THEM AS THEY COME
ONLINE, WHICH IS VERY IMPORTANT
BECAUSE IT'S REALLY AN IMPORTANT
PART OF THE COMMISSIONING
PROCESS TO MAKE SURE THAT
EVERYTHING IS WORKING THE WAY
THAT IT SHOULD, SO YES, THAT IS
THE PROCESS AND IT IS 21 AND IT
WILL BE 63 MEGAWATTS IN TOTAL
GENERATING FOR VERMONTERS.
>> THERE HAVE BEEN SEVERAL
PROTESTS RELATED TO THE WIND
TURBINES, PEOPLE EITHER LOVE
THEM OR HATE THEM.
IT SEEMS LIKE, UP THERE IN THE
KINGDOM.
THERE'S BEEN LESS OF PROTESTERS.
GIVEN EVERYTHING THAT'S HAPPENED
AND WHAT YOU KNOW NOW, WOULD GMP
WANT TO DO THIS PROJECT AGAIN?
>> WE FEEL REALLY STRONG ABOUT
THE IMPORTANCE OF THIS PROJECT
FOR VERMONTERS.
IT REALLY WAS A KEY PART OF OUR
VISION THAT WE LAUNCHED ABOUT
FOUR YEARS AGO TO PROVIDE
LOW-CARBON, COST-EFFECTIVE
ENERGY FOR VERMONTERS, AND SO
WE'RE REALLY PLEASED ABOUT THAT
AND THE PROJECT ACTUALLY IS
COMING IN AT EVEN LOWER COST
THAN WE THOUGHT.
IT IS BY FAR THE LOWEST COST
RENEWABLE RESOURCE.
>> HOW MUCH IS IT COSTS?
>> PROBABLY AT LEAST IN THE
NINE-CENT MARK IF NOT A LITTLE
BIT BELOW AND THAT FOR A
BRAND-NEW RESOURCE IS REALLY
VERY COST EFFECTIVE, SO WE'RE
REALLY PLEASED ABOUT THAT.
SO WE KNEW WHEN WE EMBARKED ON
THIS, THAT THERE WOULD BE THOSE
WHO WOULD NOT SUPPORT THE IDEA
OF BUILDING A WIND FARM.
IT'S PRETTY MUCH WHAT HAPPENS IN
ANY AREA WHERE YOU'RE BUILDING A
LARGE PROJECT.
THAT SAID, THAT'S WHY IT WAS SO
IMPORTANT TO US, AND WE WERE
REALLY CLEAR AT THE BEGINNING OF
THE PROJECT, THAT WE ABSOLUTELY
WOULD NOT BUILD IT IF WE DIDN'T
HAVE THE COMMUNITY SUPPORT.
AND AS YOU KNOW, UNLIKE, I
THINK, ANY OTHER PROJECT IN THE
STATE, WE ACTUALLY SAID IT WILL
NOT GO FORWARD IF THE COMMUNITY
DOESN'T VOTE FOR US.
>> YOU MEAN THE COMMUNITY AS IN
LOWELL.
>> YES, AS IN LOWELL.
>> I THINK YOU KNOW THE OBVIOUS
FOLLOW-UP QUESTION THERE IS
LOWELL IS GETTING QUITE A BIT OF
MONEY FROM GMP TO HOST THESE
TURBINES.
THEY SEE A LOT OF TAX BENEFITS
WHEREAS ONE TOWN OVER, THEY
STILL GET THE VIEW OF THE
TURBINES, BUT NONE OF THE TAX
BENEFITS.
>> RIGHT, AND AS YOU KNOW, THE
AGREEMENT IS REALLY JUST TO PAY
PROPERTY TAX, SO THERE'S NO
SPECIAL AGREEMENT TO LOWELL.
YOU'RE RIGHT, THERE IS JUST AS
IF THERE IS ANY DEVELOPMENT IN
ANY TOWN IN VERMONT, THERE IS
PROPERTY TAX VALUE THAT COMES AS
A RESULT, PROPERTY TAX PAYMENTS
THAT ARE MADE AS A RESULT, SO
THERE'S ECONOMIC VALUE, BUT I
WOULD SAY THE OTHER IMPORTANT
THING IS WE HAVE -- WHEN WE'VE
ASKED CUSTOMERS UP IN THAT AREA
OF THE STATE, WHEN WE'VE ASKED
COMMUNITIES ABOUT SUPPORT OF THE
PROJECT, WE STILL FIND THAT IN
GENERAL, ABOUT 60 TO 65% SUPPORT
THE PROJECT.
NOT JUST BECAUSE OF THE ECONOMIC
VALUE, BUT BECAUSE THEY WANT TO
SEE RENEWABLE ENERGY RESOURCES,
SO WHILE THERE ARE SOME
COMMUNITIES WHERE THERE'S FOLKS
WHO CERTAINLY DON'T LIKE THE
PROJECT -- IN FACT, I'M SURE
EVEN IN LOWELL, EVEN THOUGH THE
MAJORITY VOTED FOR IT, I KNOW
THERE ARE SOME FOLKS THAT DON'T
LIKE THE PROJECT, BUT IT WAS
VERY, VERY IMPORTANT TO US THAT
THE MAJORITY DID AND THAT THEY
SAID, YES, WE WANT IT HERE.
AND WE ALSO ARE REALLY PLEASED
ABOUT THE WAY THAT WE'VE GONE
ABOUT BUILDING THIS PROJECT.
WE'VE DONE IT IN A WAY THAT WE
BELIEVE IS SUPERIOR IN TERMS OF
CARING FOR THE ENVIRONMENT AS
WE'RE MAKING THIS VERY
SIGNIFICANT CHANGE TO THE
RIDGELINE.
YOU KNOW, AS AN EXAMPLE, ONE OF
THE THINGS WE DID IS WE
CONSERVED FOR HABITAT AND
SPECIES 2700 ACRES TO MITIGATE
THE 135 ACRES THAT ARE BEING
DISRUPTED WITH THE PROJECT.
>> AND GETTING THESE TURBINES TO
THE NORTHEAST KINGDOM, NO EASY
TASK.
WE REPORTED ON AT LEAST ONE
INCIDENT WHERE A TURBINE HAD
FALLEN OFF A TRUCK.
WE'VE BEEN GETTING CALLS --
>> CLIPPED A BANK.
>> ANOTHER ONE CLIPPED A BANK,
AND SOME FOLKS HAVE TALKED ABOUT
THE SORT OF TRAFFIC SNARLS.
HOW LONG WILL THAT GO ON?
WHAT IS THE PROCESS, AND THIS
APPEARS TO BE SORT OF A DAILY
ROUTE.
>> YEAH, SO WITH TRANSPORTATION
AS YOU WOULD GUESS AND AS YOU'VE
SAID, IT'S COMPLICATED TO WORK
THAT OUT.
A LOT OF WORK WENT INTO A
TRANSPORTATION PLAN THAT WOULD
WORK.
WE ACTUALLY HAVE ONLY HAD ONE
INCIDENT THAT YOU DESCRIBED
WHERE A TURBINE ACTUALLY CAME --
TIPPED OVER OFF THE TRAILER.
YOU KNOW, THAT WAS DEALT WITH
AND, YOU KNOW, EVERYTHING IS
BACK ON TRACK.
YOU KNOW, IT IS A COMPLICATED
PROCESS GETTING THAT KIND OF
EQUIPMENT THROUGH VERMONT ROADS.
AT THE SAME TIME, THOUGH, I
THINK MANY VERMONT COMMUNITIES
HAVE GOTTEN USED TO IT BECAUSE
IN ONE OF THE TRANSPORTATION
ROUTES IS THE SAME ROUTE THAT IS
BEING USED FOR A MAJOR WIND
DEVELOPMENT IN NEW HAMPSHIRE
THAT'S COMING ACROSS VERMONT FOR
THEIR DELIVERIES.
>> AND THEY COME IN ON TRAINS TO
ISLAND POND, IS THAT RIGHT?
AND THEN THEY'RE TRUCKED FROM
THERE?
>> THERE'S A COUPLE DIFFERENT
WAYS THAT THEY'RE DELIVERED TO
THE TRUCKING POINTS, BUT YES,
THAT IS HOW IT'S DONE.
>> A LOT OF OUR VIEWERS, WHEN
THEY SAW THEM, WERE SORT OF
SURPRISED BY THE SCALE OF THE
TOWERS.
WERE YOU SURPRISED BY THE SCALE
OF THE TOWERS WHEN YOU SAW THEM?
>> NO, NO.
I JUST ACTUALLY WAS UP THERE
LAST WEEK AND, YOU KNOW, I AM
REALLY STRUCK BY THE FACT THAT
THE PROJECT HAS BEEN DONE VERY
CAREFULLY AND IN A WAY THAT HAS
REALLY MITIGATED THE IMPACTS AS
MUCH AS POSSIBLE.
I, YOU KNOW -- NO, I DON'T FIND
THAT THEY LOOK OUT OF SCALE AT
ALL.
I MEAN, THEY ARE WIND TURBINES
AND THIS IS A WIND FARM PROJECT.
I THINK IT LOOKS VERY DIFFERENT.
I LIVE IN THE CHAMPLAIN ISLANDS
AND AS YOU PROBABLY KNOW FROM
MANY POINTS NOW IN THE ISLANDS,
YOU CAN SEE A LOT OF VERY LARGE
PROJECTS THAT WERE PUT UP IN NEW
YORK, SO MAYBE IT'S JUST THAT
I'VE GOTTEN USED TO SEEING
THOSE, WHICH ARE MUCH GREATER
DENSITY OF TURBINES, MUCH
GREATER NUMBER OF TURBINES, SO
FROM MY PERSPECTIVE, I THINK
THAT IT'S BEEN REALLY WELL DONE.
>> SO ON THIS PROJECT, I'M SURE
GMP HAS LAERND LOT, A LOT WHEN
IT COMES TO PROTESTERS AND
PROJECTS AND PLANNING AND
TRANSPORTATION AND TRUCKING AND
JUST WHAT IT TAKES TO PUT A
PROJECT LIKE THIS UP IN VERMONT.
GIVEN WHAT YOU DO KNOW NOW, DO
YOU THINK IT'S TIME FOR A TIME
OUT WHEN IT COMES TO FUTURE WIND
PROJECTS OR DO YOU THINK BECAUSE
OF HOW THINGS HAVE PROCEEDED,
THAT THE NEXT PROJECT SHOULD BE
JUMPED RIGHT INTO?
>> I FEEL REALLY GOOD ABOUT THIS
PROJECT.
PRINCIPALLY THAT IT IS GOING TO
BE REALLY COST EFFECTIVE FOR
VERMONTERS.
IT'S A GREAT MOVE FORWARD IN
RENEWABLE ENERGY WHICH IS WHAT,
AGAIN, THE MAJORITY OF
VERMONTERS CONTINUE TO SAY THAT
THAT'S WHAT THEY WANT, THAT'S
WHAT OUR CUSTOMERS TELL US THEY
WANT.
SO I FEEL REALLY GOOD ABOUT IT.
I FEEL PLEASED THAT THE
PROJECT'S ON TIME AND ON BUDGET
OVERALL.
YES, WE HAVE LEARNED A LOT
THROUGH THE PROCESS.
I THINK THAT CLEARLY THERE SEEMS
TO BE SOME MOMENTUM IN VERMONT
THAT IT MIGHT BE A GOOD IDEA TO
HAVE A BROADER DIALOGUE ABOUT
THE SITING OF FUTURE WIND
PROJECTS, SO WE'RE PLEASED TO
PARTICIPATE IN THAT DIALOGUE IN
ANY WAY THAT IT WOULD BE USEFUL
TO THE STATE AND TO POLICY
MAKERS.
SO, YOU KNOW, WE DON'T HAVE ANY
PLANS NOW TO JUMP INTO ANOTHER
PROJECT.
THIS REALLY FITS WELL IN OUR
PORTFOLIO AND WE DON'T HAVE A
STRONG NEED OR DESIRE FOR
ANOTHER PROJECT AT THIS POINT.
>> YOU HAD MENTIONED THAT WE'RE
CLOSE TO SEEING THESE COME
ONLINE.
WHEN WILL THEY START CRANKING
OUT POWER OR AT LEAST ONE, THE
FIRST ONE?
>> REALLY, I THINK THE FIRST ONE
WILL PROBABLY BE COMMISSIONED
NEXT WEEK, SO, YOU KNOW, WE'RE
GOING TO START TO SEE THEM
GENERATING IN THE NEXT FEW WEEKS
AS WE LEAD INTO WHEN THE FULL
PROJECT IS COMMISSIONED.
IF ALL THINGS CONTINUE TO GO
WELL, IT'S POSSIBLE THAT THE
FULL PROJECT WILL BE
COMMISSIONED WELL BEFORE THE
DECEMBER TIME FRAME.
AS I SAID, WE'RE AHEAD OF
SCHEDULE.
THE MILD WINTER AND THE GOOD
WEATHER THIS SUMMER WAS REALLY
GOOD FOR CONSTRUCTION PROJECTS.
I WOULD SAY ALL OVER THE STATE.
AND THAT WAS CERTAINLY TRUE FOR
OURS.
>> THE AMOUNT OF POWER THAT'S
BEING PRODUCED, SORT OF DUMB IT
DOWN FOR FOLKS.
HOW MANY HOUSES, HOW MANY
HOUSEHOLDS ARE WE TALKING ABOUT
HERE?
>> I THINK WHAT WE'VE DESCRIBED
IN GENERAL IS USUALLY ABOUT
15,000 HOMES.
>> AND THAT POWER IS GOING
WHERE?
CHITTENDEN COUNTY ONLY?
>> THE POWER IS GOING WHEREVER
IT'S NEEDED IN THE VERMONT, YOU
KNOW, ENERGY SPACE.
VEC, VERMONT ELECTRIC
COOPERATIVE IS PURCHASING SOME
OF THE POWER AT COST OFF OF THE
PROJECT AND OUR CUSTOMERS WOULD
SEE IT AT COST.
SO SIMPLY PUT, THE POWER FLOWS
INTO THE GRID AND THROUGH THE
POWER PURCHASE AGREEMENT WE DID
WITH VEC, THEY WILL BE POWERING
SOME OF THEIR CUSTOMERS' HOMES
WITH IT AND GREEN MOUNTAIN WILL
BE POWERING SOME OF OURS.
>> I THINK THAT'S AN IMPORTANT
POINT BECAUSE A LOT OF FOLKS IN
THE KINGDOM WHO HAVE EXPRESSED
OPPOSITION TO THIS PROJECT HAVE
LOOKED AT IT LIKE, OKAY, IT'S
OKAY TO BUILD THIS MASSIVE THING
HERE IN THE KINGDOM AND IT'S
GOING TO BE BENEFITTING THE
FOLKS IN THE BURLINGTON AREA,
BUT THAT'S NOT TRUE.
>> NO, ABSOLUTELY NOT.
NO, IN FACT, THAT'S -- VERMONT
ELECTRIC COOPERATIVE HAS BEEN A
TREMENDOUS PARTNER.
WE'VE REALLY ENJOYED WORKING
WITH THEM ON THIS.
DAVE HULQUIST, THEIR CEO, HAS
DONE A GREAT JOB MEETING WITH
COMMUNITIES AND CUSTOMERS, AND
SO NO, IT WILL BE POWERING A LOT
OF CUSTOMERS IN THAT AREA
WITHOUT A DOUBT.
>> YOU MENTIONED, MARY POWELL,
THAT IT'S ABOUT NINE CENTS A
KILOWATT HOUR AND I KNOW THAT A
LOT OF CONVERSATIONS HAVE
INVOLVED WHAT IT COST TO BUY
POWER IN THE OPEN MARKET, A LOT
LESS EXPENSIVE THAN IT'S BEEN IN
A WHILE.
I BELIEVE IT'S LESS THAN NINE
CENTS AT THIS POINT.
>> YES, YES.
>> WHY GO AHEAD WITH A PROJECT
THAT IS COSTING MORE THAN WHAT
YOU COULD BUY POWER FROM ON THE
OPEN MARKET OR FROM OTHER
SOURCES LIKE, FOR EXAMPLE,
NUCLEAR OUT OF STATE, WHICH IS
ANOTHER SOURCE WHERE GMP IS
GETTING POWER?
>> RIGHT, SURE.
GREAT QUESTION.
ONE OF THE THINGS THAT'S REALLY
IMPORTANT TO REMEMBER WOULD
BE -- A FEW THINGS.
ONE IS IN ANY PORTFOLIO, ANY
POWER PORTFOLIO, WHAT YOU WANT
IS DIVERSITY OF SOURCES.
IT'S VERY SIMILAR, PEOPLE MIGHT
THINK ABOUT THEIR 401(K)'S OR
FINANCIAL PORTFOLIO.
YOU WANT DIVERSITY BECAUSE YOU
WANT DIFFERENT THINGS PROVIDING
DIFFERENT TYPES OF VALUE
PROPOSITION FOR YOU AS YOU LOOK
TO THE FUTURE.
SO ONE OF THE THINGS THAT'S VERY
IMPORTANT IS TO HAVE SOME OWNED
RESOURCES IN THE PORTFOLIO.
ONE OF THE THINGS THAT REALLY
INFORMED ME ABOUT THIS PROJECT
WAS, AS I DUG DEEPER INTO OUR
POWER SUPPLY AND LOOKING AT WHAT
WE PAY FOR DIFFERENT, YOU KNOW,
PIECES OF THE PIE, WHAT I SAW
VERY CLEARLY WAS THAT ACTUALLY,
BECAUSE OF THE WISDOM OF THOSE
WHO CAME GENERATIONS BEFORE ME,
AS IN PROBABLY 40 AND 50 YEARS
AGO, THE HYDRO UNITS THAT WE
ACTUALLY OWN AND OPERATE FOR
VERMONTERS ARE THE CHEAPEST
SOURCES OF POWER.
IT'S NOT -- IT WASN'T VERMONT
YANKEE AT THE TIME, IT WASN'T
HYDRO QUEBEC, IT WASN'T ANY OF
THESE OTHER SOURCES.
IT WAS ACTUALLY OUR OWNED HYDRO
FACILITIES AND THE REASON IS
BECAUSE WE OWNED THEM.
WHEN YOU PURCHASE FROM SOMEBODY
ELSE, I ALWAYS USE IT'S THE OWN
VERSUS RENT ANALOGY.
IT MIGHT COST YOU A LITTLE BIT
MORE TO OWN SOMETHING UP FRONT
THAN YOU COULD RENT IT FOR DOWN
THE STREET, BUT THERE IS A POINT
AT WHICH THAT FLIPS AND IT
BECOMES MUCH MORE COST EFFECTIVE
THAT YOU OWN IT VERSUS RENT IT.
>> SO THAT NINE CENTS POWER
WON'T STAY STEADY, IT COULD BE
LESS?
>> OH, ABSOLUTELY, BECAUSE YOU
OWN IT.
JUST LIKE THE HYDROS, YES, AT
ONE POINT IT TOOK A BIG CAPITAL
INVESTMENT, IT TOOK SOME DEBT,
BORROWING, RIGHT?
BUT THEN ONCE THEY'RE PAID OFF,
THE WAY THE REGULATED UTILITY
MODEL WORKS IS WE DON'T MAKE A
DIME OFF OF THE POWER THAT FLOWS
TO YOUR HOMES.
THAT GOES AT COST.
SO ONCE THAT'S PAID, IT FLOWS AT
COST TO CUSTOMERS.
SO THIS, YOU KNOW, AS A STARTING
POINT -- THE OTHER THING IS TO
LOOK AT THAT WE HAVE, WE HAVE
POLICY INITIATIVES IN OUR STATE.
WE HAVE LEGISLATIVE INITIATIVES
AROUND THE AMOUNT OF RENEWABLES
THAT WE SHOULD -- RIGHT.
SO WE NEEDED TO HAVE MORE
RENEWABLES IN OUR PORTFOLIO,
WHETHER WE BUILT IT FOR
VERMONTERS OR RENTED IT BY
PURCHASING WIND ENERGY FROM,
LET'S SAY, UPSTATE NEW YORK.
HUGE DIFFERENCE.
YOU KNOW, THE BEST PRICE I'VE
SEEN ON THE MARKET IS AT LEAST A
COUPLE CENTS, IF NOT MORE,
HIGHER.
SO EVEN OUT OF THE GATE AS YOU
COMPARE IT TO OTHER WIND
RESOURCES WE HAD AVAILABLE TO
US, IT'S MORE COST EFFECTIVE.
SO TO US, IT REALLY LOOKS LIKE A
TRIPLE WINNER FOR CUSTOMERS.
>> AND THEN VERY QUICKLY, WHEN
WILL THE WIND TOWER PROJECT STOP
TURNING AND MAKE POWER?
WHEN DO YOU PLAN TO DECOMMISSION
IT?
>> YOU KNOW, THE LIFE OF IT WHEN
YOU GET YOUR CERTIFICATE OF
PUBLIC GOOD IS FOR -- I WANT TO
GET THIS PRECISE AND I MAY NOT,
SO I BELIEVE IT'S ABOUT A
25-YEAR PERIOD.
IN REALITY, THAT IS THE SAME AS
ANY OTHER SOURCE OF GENERATION
THAT WE BUILD, AND IN REALITY,
WHAT USUALLY HAPPENS IS YOU
WOULD GO BACK AND YOU WOULD LOOK
TO REPOWER IT.
WE HAVE THE FLEXIBILITY TO MAKE
SURE THAT WE CAN GO BACK AND
REPOWER AND KEEP IT RUNNING,
MUCH LIKE WE'VE DONE WITH THE
HYDRO UNITS, SO OUR HOPE IS THAT
IT'S SERVING VERMONTERS FOR AS
LONG AS POSSIBLE AND AS LONG AS
IT IS A COST EFFECTIVE SOLUTION
FOR RENEWABLE ENERGY, WHICH WE
BELIEVE WILL BE FOR A LONG TIME.
>> WE HAVE A LOT OF OTHER ISSUES
TO GET TO.
MARY POWELL, THE CEO OF GREEN
MOUNTAIN POWER.
WE'RE TALKING ABOUT YANKEE AMONG
OTHER ISSUES.
STAY WITH US, WE'LL BE RIGHT
BACK AFTER THE BREAK.
>> WELCOME BACK, EVERYONE.
WE ARE TALKING POWER WITH MARY
POWELL.
SHE'S THE CEO OF GREEN MOUNTAIN
POWER.
>> LET'S TALK ABOUT THE MERGER
NOW BETWEEN GMP AND CVPS.
RECENTLY, I THINK IT WAS A
COUPLE WEEKS AGO NOW, YOU FOLKS
ANNOUNCED WHAT SOUNDED LIKE A
PRETTY HISTORIC ANNOUNCEMENT
ABOUT LOWER RATES.
FIRST TIME IN 24 YEARS, IS THAT
CORRECT?
>> YES.
>> HOW DID THAT COME ABOUT AND
HOW IS THAT DIRECTLY RELATED TO
THIS MERGER?
>> GREAT QUESTION.
SO OUR MERGER, WE'RE ONLY SIX
WEEKS INTO OUR MERGER AND SO
FAR, I REALLY HAVE BEEN PLEASED
AT NOT JUST OUR ABILITY FOR THE
FIRST TIME IN A REALLY LONG TIME
TO ACTUALLY LOWER RATES, BUT
I'VE ALSO BEEN PLEASED WITH THE
FACT THAT DUE TO SOME BAD
WEATHER -- I HAVEN'T BEEN
PLEASED ABOUT THE BAD WEATHER,
BUT I'VE BEEN REALLY PLEASED TO
SEE THE TEAMS COMING TOGETHER
AROUND RESTORATION FOR THE
STATE.
SO WE'VE SEEN THAT WE'RE ABLE TO
LOWER COSTS IN OUR FIRST RATE
FILING SINCE THE MERGER AND
WE'VE ALSO SEEN THAT WE'VE BEEN
ABLE TO IMPROVE OUR PERFORMANCE
IN RESTORATION.
AND THAT FOR US IS REALLY WHAT
THE MERGER IS ABOUT.
IT'S ABOUT IMPROVING SERVICE TO
VERMONTERS AND LOWERING COSTS AS
MUCH AS WE POSSIBLY CAN.
SO THE DECREASE CAME ABOUT
THROUGH A LOT OF HARD WORK ON
EVERY ASPECT OF OUR BUSINESS
THAT IS SEEING AN INCREASE IN
COST, AND WE'RE LIKE ANY OTHER
BUSINESS IN THAT WE HAVE ALL
SORTS OF PRESSURES ON RATES, I
WOULD SAY THE MOST SIGNIFICANT
OF WHICH IS THE COST OF THE NEW
ENGLAND TRANSMISSION SYSTEM, OF
WHICH WE ARE RESPONSIBLE FOR
PAYING A PORTION OF THAT AND
IT'S AN AGING INFRASTRUCTURE AND
THERE'S LITERALLY BILLIONS OF
DOLLARS OF INVESTMENT THAT NEED
TO BE COVERED, SOME OF THAT
NEEDS TO BE BORNE BY THE VERMONT
CUSTOMERS.
SO WE HAVE SOME REAL PRESSURES
ON RATES.
ONE OF THE MANY REASONS WE WERE
PASSIONATE ABOUT THE MERGER WAS
WE SAW IT AS A HISTORIC
OPPORTUNITY TO LOWER COST AND
IMPROVE OUR COST EFFECTIVENESS
FOR VERMONTERS.
SO IN FACT, THAT REALLY WAS THE
PIECE, EVEN SIX WEEKS INTO THE
MERGER, THAT ALLOWED US TO GO
FROM SOMETHING THAT LOOKED LIKE
IT WAS GOING TO, AT BEST, BE
KEEPING RATES FLAT OR A LITTLE
BIT HIGHER, TO ACTUALLY TURNING
TOWARDS A DECREASE.
>> WHAT'S SPECIFICALLY WITHIN
THE MERGER, WAS IT LIKE
ADMINISTRATIVE COSTS WERE
REDUCED OR --
>> YEAH, WE COMMITTED THROUGH
OUR REGULATORY PROCESS TO A
SPECIFIC LEVEL OF SAVINGS WE
NEEDED TO DELIVER EACH YEAR IN
THE FIRST FEW YEARS, AND THOSE
ARE LARGELY COMING OUT OF SOME
OF THE ADMINISTRATIVE COSTS.
AS YOU KNOW, WE COMMITTED TO
ALSO NO LAYOFFS, SO WE'RE DOING
THIS IN A WAY THAT IS HARNESSING
THE AGING OF VERMONT'S
POPULATION.
MOST SECTORS ARE SEEING THAT
AGING.
YOU SEE IT VERY CLEARLY IN THE
UTILITY INDUSTRY WHERE WE HAVE
ABOUT 40% OF THE WORKFORCE THAT
WILL BE RETIRING PROBABLY OVER
THE NEXT FIVE YEARS, SO A HUGE
PART OF IT IS WE'RE HARNESSING
THAT AS WE RESTRUCTURE THE
ORGANIZATION TO BE AS EFFECTIVE
FOR VERMONTERS AS POSSIBLE GOING
FORWARD.
>> WE HEARD YOU SAY THAT THERE'S
A LOT OF COSTS OUT THERE THAT
HAVE TO BE DEALT WITH, SO IS
THIS A ONE-TIME DECREASE OR WILL
VERMONTERS SEE A DECREASE AGAIN?
>> I REALLY AM WORKING HARD TO
KEEP THE COSTS AS LOW AS WE
POSSIBLY CAN.
SO OUR GOAL, WITHOUT A SHADOW OF
A DOUBT, WHAT IS IT SHOULD BE IN
MY MIND, WHICH IS TO KEEP THEM
AS LOW AS WE CAN.
IF WE CAN DELIVER ANOTHER
DECREASE, WE'D BE REALLY
THRILLED.
RIGHT NOW, THAT LOOKS VERY HARD
BECAUSE OF ALL THESE OTHER
PRESSURES, BUT ONE THING I KNOW
FOR SURE IS RATES WILL BE A LOT
LOWER THAN THEY OTHERWISE WOULD
HAVE BEEN BECAUSE WE'RE GOING TO
BE DELIVERING THESE COST SAVINGS
THAT, AGAIN, HAVE TO BE VERY
WELL DOCUMENTED AND WILL BE
SCRUBBED BY, YOU KNOW, TWO
LAYERS OF REGULATORS IN THE
STATE OF VERMONT.
>> LET'S TALK ABOUT VERMONT
YANKEE A LITTLE BIT.
IF VERMONT YANKEE IS ALLOWED TO
KEEP RUNNING, WILL GREEN
MOUNTAIN POWER REEVALUATE AND
DECIDE TO GET POWER FROM YANKEE
IN THE FUTURE?
>> WE HAVEN'T HAD ANY
DISCUSSIONS WITH THE FOLKS AT
VERMONT YANKEE OR ENTERGY IN A
WHILE.
WE, AS YOU KNOW, PROBABLY WORKED
A COUPLE YEARS TO SEE IF THERE
WAS A WAY TO WORK OUT SOMETHING
FROM AN ECONOMIC PERSPECTIVE,
AND, YOU KNOW, CANDIDLY, WE
NEVER GOT THERE.
WE NEVER GOT TO SOMETHING THAT
WE FELT WAS PRUDENT FOR OUR
CUSTOMERS.
SO IN FACT, WE TURNED TO NEXT
TARA ENERGY, WHICH HAPPENS TO BE
ONE OF THE LARGEST RENEWABLE
ENERGY DEVELOPERS IN THE
COUNTRY, BUT THEY ALSO HAPPEN TO
OWN A COUPLE NUCLEAR PLANTS AND
WE STRUCK A DEAL WITH THEM FOR
POWER FROM SEABROOK NUCLEAR
PLANT AT WHAT WE THOUGHT WAS A
VERY COST-EFFECTIVE RATE FOR
VERMONTERS.
SO WE DO HAVE SOME OPENING IN
OUR PORTFOLIO, SO CERTAINLY IF A
REALLY STRONG, COMPELLING DEAL
WAS, WAS, YOU KNOW, PROPOSED TO
US, WE WOULD CONSIDER IT, BUT
WE'RE REALLY IN A STRONG
POSITION WHERE WE DON'T NEED TO
BE SHOPPING FOR THAT KIND OF A
DEAL AT THIS TIME.
>> BUT NOT OFF THE TABLE IF A
REALLY SOLID OFFER CAME IN?
>> YEAH, I WOULD NEVER -- I
WOULDN'T SIT HERE TODAY AND SAY
ANYTHING IS OFF THE TABLE IN THE
FUTURE IN TERMS OF IF THERE WERE
A REALLY GREAT POWERFUL DEAL
THAT CAME UP.
YOU KNOW, THAT IS NOT WHAT
HAPPENED IN OUR CASE, YOU KNOW,
AND FRANKLY TO YOUR POINT ABOUT
THE POWER MARKETS, THEY'RE AT
REALLY GOOD COMPETITIVE RATES
RIGHT NOW, SO OUR OPENING IN OUR
PORTFOLIO, WE'RE TAKING
ADVANTAGE OF THOSE LOW POWER
MARKETS AND BUYING ENERGY AT A
LOWER COST THAN THE CURRENT
CONTRACT EXPIRED WITH VERMONT
YANKEE, SO WE'RE IN REALLY GOOD
SHAPE RIGHT NOW.
>> WHAT DO YOU THINK WENT WRONG
WITH THOSE POWER TALKS THAT NO
DEAL WAS EVER REACHED?
>> I WOULD JUST SAY FROM OUR
PERSPECTIVE, WE JUST -- WE WERE
WORKING HARD ON -- WE HAD
LAUNCHED AN ENERGY VISION WHICH
TALKED ABOUT RAMPING UP
RENEWABLES IN A COST-EFFECTIVE
WAY, WHICH WE'RE DOING.
WE TALKED ABOUT WORKING WITH
HYDRO QUEBEC TO COME UP WITH A
REALLY STRONG EFFECTIVE CONTRACT
WHICH, AS YOU KNOW, WE DID
BECAUSE I REMEMBER YOU WERE
THERE FOR THE GREAT ANNOUNCEMENT
OF IT, WHICH WE'RE REALLY PROUD
OF THAT TRANSACTION, AND THEN WE
HOPED TO REALLY TAKE ADVANTAGE
OF THE LOW-CARBON NATURE OF
VERMONT YANKEE IF IT WERE DEEMED
TO BE SAFE TO OPERATE, AND WE
WANTED A NEW CONTRACT.
WE JUST -- YOU KNOW, FROM MY
PERSPECTIVE, WE NEVER GOT ACROSS
THE FINISH LINE BECAUSE IT'S
JUST LIKE ANY OTHER COMMERCIAL
DEAL YOU'RE TRYING TO DO.
IF YOU CAN'T GET THE PARTY TO
WHAT YOU THINK IS A GOOD STRONG
ECONOMIC DEAL, YOU KNOW, YOU
STOP, AND THAT'S WHAT HAPPENED
WITH US.
WE JUST -- WE NEVER COULD GET
EVEN CLOSE TO WHAT I FELT LIKE
WAS -- OR THE TEAM FELT WAS LIKE
A GOOD ECONOMIC DEAL FOR
VERMONTERS IN TERMS OF THE COST
OF POWER.
WHEN WE TURNED TO NEXTERRA AND
STARTED NEGOTIATING WITH THEM,
WE WERE ABLE TO WITHIN A FEW
MONTHS GET TO WHAT WAS A REALLY
STRONG VALUE PROPOSITION FOR OUR
CUSTOMERS, SO WE WERE ABLE TO
TAKE, YOU KNOW, ABLE TO MEET
THAT OBJECTIVE THAT WE WANTED OF
HARNESSING THE LOW-CARBON, VERY
STABLE, RELIABLE RESOURCE THAT
THAT CAN PRESENT AS WE RAMPED UP
OTHER RESOURCES IN THE FUTURE
AND WE WERE ABLE TO DO THAT WITH
THEM, SO THAT'S WHAT WE'VE DONE.
>> DURING THE MERGER BETWEEN GMP
AND CVPS, THERE WAS THIS
CONTROVERSY OVER THE
$21 MILLION.
AARP WAS SAYING THAT, YOU KNOW,
THAT 21 MILLION USED DECADES AGO
TO BAIL OUT CVPS.
THE PUBLIC SERVICE BOARD
DETERMINED THAT THAT 21 MILLION
SHOULD BE PUT BACK INTO ENERGY
EFFICIENCY PROGRAMS, WHICH YOUR
COMPANY WAS PUSHING FOR.
HAS THAT STARTED?
WHAT KIND OF PROGRAMS HAVE BEEN
INITIATED?
HOW IS IT GOING TO BENEFIT THE
CUSTOMER IN THE LONG RUN?
>> YOU'RE ABSOLUTELY RIGHT.
WHAT HAPPENED IS THE REGULATORS
LOOKED AT THE ISSUE AND I THINK
THEY ACTUALLY -- THOUGH I WOULD
ADD TO WHAT YOU SAID.
THEY WENT TO GREAT LENGTHS TO
REALLY DOCUMENT THE HISTORY OF
THE DECISION AROUND THAT
RECAPTURE OF THAT 21 MILLION,
AND CANNED DIDDLY SET THE --
CANDIDLY SET THE RECORD STRAIGHT
BECAUSE PART OF THE CHALLENGE
FOR OUR COMPANY WAS CERTAINLY
WHAT I WOULD CONSIDER VERY
INACCURATE MESSAGING ABOUT THE
ORIGIN OF THE 21 MILLION.
SO THAT WAS ANOTHER THING.
THEY REALLY TOOK TIME TO SET THE
RECORD STRAIGHT BECAUSE THERE
WAS NO LOAN TO CVPS.
IN FACT, THE COST OF THE HYDRO
QUEBEC CONTRACT WAS NOT ALLOWED
IN RATES FOR A NUMBER OF YEARS.
CUSTOMERS DIDN'T PAY FOR THE
COST OF POWER.
THE COMPANY HAD TO ABSORB THAT.
CUSTOMERS DID NOT PAY FOR THAT
AND WHAT HAPPENED IS THEN AT ONE
POINT, THE REGULATORS SAID,
OKAY, NOW WE ACTUALLY THINK YOU
CAN START CHARGING CUSTOMERS FOR
THE POWER THAT'S POWERING THEIR
HOMES, WHICH WAS HYDRO QUEBEC,
SO IT WAS AT THAT POINT THAT
THEY SAID THE CUSTOMERS SHOULD
START PAYING FOR THAT POWER AND
IT WAS THE -- THE RECAPTURE WAS
SIMPLY TO SAY, BUT IF -- AND
ACTUALLY THE HYDRO QUEBEC
CONTRACT, AS MANY PEOPLE KNOW,
TURNED AROUND TO BE A VERY GOOD
DEAL FOR VERMONTERS ACTUALLY
WITHIN A COUPLE YEARS OF THAT
DECISION, SO THERE WAS NO LOAN
TO BE PAID BACK, BUT THERE WAS
THIS SHARING MECHANISM THAT THE
REGULATORS HAD SET UP.
SO THEY REALLY WENT TO GREAT
PAINS TO SPELL THAT OUT AND TO
SET THE RECORD STRAIGHT.
AND THEN, YES, THEY APPROVED
THIS PROGRAM THAT WE HAD
UTILIZED BACK IN 2006 AND '07
WHEN OUR COMPANY, GREEN MOUNTAIN
POWER, SOUGHT A NEW OWNERSHIP
STRUCTURE WITH GAZ METRO WHEREBY
WE MADE THESE INVESTMENTS AND WE
WENT THROUGH A LOT OF PROCESS TO
DOCUMENT THEM AND SHOW THAT, IN
FACT, WE MORE THAN DOUBLED THE
RETURN OF VALUE TO CUSTOMERS IN
THOSE INVESTMENTS.
SO IT'S VERY MUCH THE SAME THING
AND THE REGULATORS WILL HOLD OUR
FEET TO THE FIRE TO DOCUMENT AND
PROVE $46 MILLION OF VALUE THAT
NEEDS TO BE RETURNED TO
CUSTOMERS THROUGH $21 MILLION OF
INVESTMENTS.
SO THE --
>> AND HAVE YOU STARTED THAT
INVESTMENT?
>> THE PROGRAM IS BEING DESIGNED
AND I WOULD SAY THAT INVESTMENTS
PROBABLY WILL START WITHIN THE
NEXT COUPLE OF MONTHS, BUT WE'RE
JUST SIX WEEKS INTO THE MERGER,
SO ALL OF THAT IS GOING THROUGH
THE PROCESS OF BEING DOCUMENTED
AND PUT TOGETHER.
>> ALL RIGHT.
WE HAVE TO LEAVE IT THERE.
MARY POWELL WITH GREEN MOUNTAIN
POWER, THE NEW CEO OF THE MERGED
COMPANY.
THANK YOU FOR JOINING US THIS
MORNING.
>> THANK YOU.
MY PLEASURE.
>> THANK YOU, MARY.
>> AND THANKS TO YOU, OF COURSE,
AT HOME FOR WATCHING.
HAVE A GREAT SUNDAY, EVERYONE.
>> SEE YOU SOON.
CAPTIONING PROVIDED BY.
CAPTION ASSOCIATES, LLC
www.captionassociates.com

CAPTIONING PROVIDED BY

CAPTION ASSOCIATES, LLC

www.captionassociates.com

>> Announcer: FROM VERMONT'S

MOST TRUSTED NEWS SOURCE, WCAX

BRINGS YOU YOUR NEWSMAKERS, YOUR

NEIGHBORS.

THIS IS "YOU CAN QUOTE ME."

>>> GOOD MORNING AND THANKS FOR

JOINING US, EVERYONE.

OUR NEWSMAKER THIS SUNDAY

MORNING IS GREEN MOUNTAIN

POWER'S CEO MARY POWELL.

>> MARY POWELL, THANK YOU FOR

JOINING US.

>> IT'S MY PLEASURE, THANKS FOR

HAVING ME.

>> WE HAVE A LOT TO GET TO, BUT

LET'S START WITH AN UPDATE WITH

THE LOWELL WIND PROJECT.

A MASSIVE UNDERTAKING IN THE

NORTHEAST KINGDOM.

WHERE ARE WE, I UNDERSTAND WE

HAVE TURBINES UP.

>> ABSOLUTELY.

WE HAVE TURBINES UP, NOT FAR

FROM BEING COMMISSIONED, SO

ACTUALLY CONNECTED TO THE SYSTEM

AND GENERATING.

SO WE'RE PLEASED WITH THE

PROGRESS, WE'RE ACTUALLY AHEAD

OF SCHEDULE AT THIS POINT.

OUR GOAL WAS ALWAYS TO HAVE THE

TURBINES ONLINE BY DECEMBER 3rd

OF THIS YEAR.

RIGHT NOW, WE'RE CERTAINLY ON

TASK TO HIT THAT DEADLINE AND IT

LOOKS LIKE WE MIGHT ACTUALLY GET

THEM SPINNING A LITTLE BIT

BEFORE THE DUE DATE.

>> AND WE'RE TALKING 21,

CORRECT?

>> IN TOTAL, YEAH.

>> AND WILL -- AS EACH ONE COMES

UP, ARE WE CONNECTING THEM

INDIVIDUALLY OR DO WE WAIT UNTIL

ALL 21 ARE UP?

>> THE WAY THAT IT'S DONE,

ACTUALLY, IS THAT, YES, YOU

CONNECT THEM AS THEY COME

ONLINE, WHICH IS VERY IMPORTANT

BECAUSE IT'S REALLY AN IMPORTANT

PART OF THE COMMISSIONING

PROCESS TO MAKE SURE THAT

EVERYTHING IS WORKING THE WAY

THAT IT SHOULD, SO YES, THAT IS

THE PROCESS AND IT IS 21 AND IT

WILL BE 63 MEGAWATTS IN TOTAL

GENERATING FOR VERMONTERS.

>> THERE HAVE BEEN SEVERAL

PROTESTS RELATED TO THE WIND

TURBINES, PEOPLE EITHER LOVE

THEM OR HATE THEM.

IT SEEMS LIKE, UP THERE IN THE

KINGDOM.

THERE'S BEEN LESS OF PROTESTERS.

GIVEN EVERYTHING THAT'S HAPPENED

AND WHAT YOU KNOW NOW, WOULD GMP

WANT TO DO THIS PROJECT AGAIN?

>> WE FEEL REALLY STRONG ABOUT

THE IMPORTANCE OF THIS PROJECT

FOR VERMONTERS.

IT REALLY WAS A KEY PART OF OUR

VISION THAT WE LAUNCHED ABOUT

FOUR YEARS AGO TO PROVIDE

LOW-CARBON, COST-EFFECTIVE

ENERGY FOR VERMONTERS, AND SO

WE'RE REALLY PLEASED ABOUT THAT

AND THE PROJECT ACTUALLY IS

COMING IN AT EVEN LOWER COST

THAN WE THOUGHT.

IT IS BY FAR THE LOWEST COST

RENEWABLE RESOURCE.

>> HOW MUCH IS IT COSTS?

>> PROBABLY AT LEAST IN THE

NINE-CENT MARK IF NOT A LITTLE

BIT BELOW AND THAT FOR A

BRAND-NEW RESOURCE IS REALLY

VERY COST EFFECTIVE, SO WE'RE

REALLY PLEASED ABOUT THAT.

SO WE KNEW WHEN WE EMBARKED ON

THIS, THAT THERE WOULD BE THOSE

WHO WOULD NOT SUPPORT THE IDEA

OF BUILDING A WIND FARM.

IT'S PRETTY MUCH WHAT HAPPENS IN

ANY AREA WHERE YOU'RE BUILDING A

LARGE PROJECT.

THAT SAID, THAT'S WHY IT WAS SO

IMPORTANT TO US, AND WE WERE

REALLY CLEAR AT THE BEGINNING OF

THE PROJECT, THAT WE ABSOLUTELY

WOULD NOT BUILD IT IF WE DIDN'T

HAVE THE COMMUNITY SUPPORT.

AND AS YOU KNOW, UNLIKE, I

THINK, ANY OTHER PROJECT IN THE

STATE, WE ACTUALLY SAID IT WILL

NOT GO FORWARD IF THE COMMUNITY

DOESN'T VOTE FOR US.

>> YOU MEAN THE COMMUNITY AS IN

LOWELL.

>> YES, AS IN LOWELL.

>> I THINK YOU KNOW THE OBVIOUS

FOLLOW-UP QUESTION THERE IS

LOWELL IS GETTING QUITE A BIT OF

MONEY FROM GMP TO HOST THESE

TURBINES.

THEY SEE A LOT OF TAX BENEFITS

WHEREAS ONE TOWN OVER, THEY

STILL GET THE VIEW OF THE

TURBINES, BUT NONE OF THE TAX

BENEFITS.

>> RIGHT, AND AS YOU KNOW, THE

AGREEMENT IS REALLY JUST TO PAY

PROPERTY TAX, SO THERE'S NO

SPECIAL AGREEMENT TO LOWELL.

YOU'RE RIGHT, THERE IS JUST AS

IF THERE IS ANY DEVELOPMENT IN

ANY TOWN IN VERMONT, THERE IS

PROPERTY TAX VALUE THAT COMES AS

A RESULT, PROPERTY TAX PAYMENTS

THAT ARE MADE AS A RESULT, SO

THERE'S ECONOMIC VALUE, BUT I

WOULD SAY THE OTHER IMPORTANT

THING IS WE HAVE -- WHEN WE'VE

ASKED CUSTOMERS UP IN THAT AREA

OF THE STATE, WHEN WE'VE ASKED

COMMUNITIES ABOUT SUPPORT OF THE

PROJECT, WE STILL FIND THAT IN

GENERAL, ABOUT 60 TO 65% SUPPORT

THE PROJECT.

NOT JUST BECAUSE OF THE ECONOMIC

VALUE, BUT BECAUSE THEY WANT TO

SEE RENEWABLE ENERGY RESOURCES,

SO WHILE THERE ARE SOME

COMMUNITIES WHERE THERE'S FOLKS

WHO CERTAINLY DON'T LIKE THE

PROJECT -- IN FACT, I'M SURE

EVEN IN LOWELL, EVEN THOUGH THE

MAJORITY VOTED FOR IT, I KNOW

THERE ARE SOME FOLKS THAT DON'T

LIKE THE PROJECT, BUT IT WAS

VERY, VERY IMPORTANT TO US THAT

THE MAJORITY DID AND THAT THEY

SAID, YES, WE WANT IT HERE.

AND WE ALSO ARE REALLY PLEASED

ABOUT THE WAY THAT WE'VE GONE

ABOUT BUILDING THIS PROJECT.

WE'VE DONE IT IN A WAY THAT WE

BELIEVE IS SUPERIOR IN TERMS OF

CARING FOR THE ENVIRONMENT AS

WE'RE MAKING THIS VERY

SIGNIFICANT CHANGE TO THE

RIDGELINE.

YOU KNOW, AS AN EXAMPLE, ONE OF

THE THINGS WE DID IS WE

CONSERVED FOR HABITAT AND

SPECIES 2700 ACRES TO MITIGATE

THE 135 ACRES THAT ARE BEING

DISRUPTED WITH THE PROJECT.

>> AND GETTING THESE TURBINES TO

THE NORTHEAST KINGDOM, NO EASY

TASK.

WE REPORTED ON AT LEAST ONE

INCIDENT WHERE A TURBINE HAD

FALLEN OFF A TRUCK.

WE'VE BEEN GETTING CALLS --

>> CLIPPED A BANK.

>> ANOTHER ONE CLIPPED A BANK,

AND SOME FOLKS HAVE TALKED ABOUT

THE SORT OF TRAFFIC SNARLS.

HOW LONG WILL THAT GO ON?

WHAT IS THE PROCESS, AND THIS

APPEARS TO BE SORT OF A DAILY

ROUTE.

>> YEAH, SO WITH TRANSPORTATION

AS YOU WOULD GUESS AND AS YOU'VE

SAID, IT'S COMPLICATED TO WORK

THAT OUT.

A LOT OF WORK WENT INTO A

TRANSPORTATION PLAN THAT WOULD

WORK.

WE ACTUALLY HAVE ONLY HAD ONE

INCIDENT THAT YOU DESCRIBED

WHERE A TURBINE ACTUALLY CAME --

TIPPED OVER OFF THE TRAILER.

YOU KNOW, THAT WAS DEALT WITH

AND, YOU KNOW, EVERYTHING IS

BACK ON TRACK.

YOU KNOW, IT IS A COMPLICATED

PROCESS GETTING THAT KIND OF

EQUIPMENT THROUGH VERMONT ROADS.

AT THE SAME TIME, THOUGH, I

THINK MANY VERMONT COMMUNITIES

HAVE GOTTEN USED TO IT BECAUSE

IN ONE OF THE TRANSPORTATION

ROUTES IS THE SAME ROUTE THAT IS

BEING USED FOR A MAJOR WIND

DEVELOPMENT IN NEW HAMPSHIRE

THAT'S COMING ACROSS VERMONT FOR

THEIR DELIVERIES.

>> AND THEY COME IN ON TRAINS TO

ISLAND POND, IS THAT RIGHT?

AND THEN THEY'RE TRUCKED FROM

THERE?

>> THERE'S A COUPLE DIFFERENT

WAYS THAT THEY'RE DELIVERED TO

THE TRUCKING POINTS, BUT YES,

THAT IS HOW IT'S DONE.

>> A LOT OF OUR VIEWERS, WHEN

THEY SAW THEM, WERE SORT OF

SURPRISED BY THE SCALE OF THE

TOWERS.

WERE YOU SURPRISED BY THE SCALE

OF THE TOWERS WHEN YOU SAW THEM?

>> NO, NO.

I JUST ACTUALLY WAS UP THERE

LAST WEEK AND, YOU KNOW, I AM

REALLY STRUCK BY THE FACT THAT

THE PROJECT HAS BEEN DONE VERY

CAREFULLY AND IN A WAY THAT HAS

REALLY MITIGATED THE IMPACTS AS

MUCH AS POSSIBLE.

I, YOU KNOW -- NO, I DON'T FIND

THAT THEY LOOK OUT OF SCALE AT

ALL.

I MEAN, THEY ARE WIND TURBINES

AND THIS IS A WIND FARM PROJECT.

I THINK IT LOOKS VERY DIFFERENT.

I LIVE IN THE CHAMPLAIN ISLANDS

AND AS YOU PROBABLY KNOW FROM

MANY POINTS NOW IN THE ISLANDS,

YOU CAN SEE A LOT OF VERY LARGE

PROJECTS THAT WERE PUT UP IN NEW

YORK, SO MAYBE IT'S JUST THAT

I'VE GOTTEN USED TO SEEING

THOSE, WHICH ARE MUCH GREATER

DENSITY OF TURBINES, MUCH

GREATER NUMBER OF TURBINES, SO

FROM MY PERSPECTIVE, I THINK

THAT IT'S BEEN REALLY WELL DONE.

>> SO ON THIS PROJECT, I'M SURE

GMP HAS LAERND LOT, A LOT WHEN

IT COMES TO PROTESTERS AND

PROJECTS AND PLANNING AND

TRANSPORTATION AND TRUCKING AND

JUST WHAT IT TAKES TO PUT A

PROJECT LIKE THIS UP IN VERMONT.

GIVEN WHAT YOU DO KNOW NOW, DO

YOU THINK IT'S TIME FOR A TIME

OUT WHEN IT COMES TO FUTURE WIND

PROJECTS OR DO YOU THINK BECAUSE

OF HOW THINGS HAVE PROCEEDED,

THAT THE NEXT PROJECT SHOULD BE

JUMPED RIGHT INTO?

>> I FEEL REALLY GOOD ABOUT THIS

PROJECT.

PRINCIPALLY THAT IT IS GOING TO

BE REALLY COST EFFECTIVE FOR

VERMONTERS.

IT'S A GREAT MOVE FORWARD IN

RENEWABLE ENERGY WHICH IS WHAT,

AGAIN, THE MAJORITY OF

VERMONTERS CONTINUE TO SAY THAT

THAT'S WHAT THEY WANT, THAT'S

WHAT OUR CUSTOMERS TELL US THEY

WANT.

SO I FEEL REALLY GOOD ABOUT IT.

I FEEL PLEASED THAT THE

PROJECT'S ON TIME AND ON BUDGET

OVERALL.

YES, WE HAVE LEARNED A LOT

THROUGH THE PROCESS.

I THINK THAT CLEARLY THERE SEEMS

TO BE SOME MOMENTUM IN VERMONT

THAT IT MIGHT BE A GOOD IDEA TO

HAVE A BROADER DIALOGUE ABOUT

THE SITING OF FUTURE WIND

PROJECTS, SO WE'RE PLEASED TO

PARTICIPATE IN THAT DIALOGUE IN

ANY WAY THAT IT WOULD BE USEFUL

TO THE STATE AND TO POLICY

MAKERS.

SO, YOU KNOW, WE DON'T HAVE ANY

PLANS NOW TO JUMP INTO ANOTHER

PROJECT.

THIS REALLY FITS WELL IN OUR

PORTFOLIO AND WE DON'T HAVE A

STRONG NEED OR DESIRE FOR

ANOTHER PROJECT AT THIS POINT.

>> YOU HAD MENTIONED THAT WE'RE

CLOSE TO SEEING THESE COME

ONLINE.

WHEN WILL THEY START CRANKING

OUT POWER OR AT LEAST ONE, THE

FIRST ONE?

>> REALLY, I THINK THE FIRST ONE

WILL PROBABLY BE COMMISSIONED

NEXT WEEK, SO, YOU KNOW, WE'RE

GOING TO START TO SEE THEM

GENERATING IN THE NEXT FEW WEEKS

AS WE LEAD INTO WHEN THE FULL

PROJECT IS COMMISSIONED.

IF ALL THINGS CONTINUE TO GO

WELL, IT'S POSSIBLE THAT THE

FULL PROJECT WILL BE

COMMISSIONED WELL BEFORE THE

DECEMBER TIME FRAME.

AS I SAID, WE'RE AHEAD OF

SCHEDULE.

THE MILD WINTER AND THE GOOD

WEATHER THIS SUMMER WAS REALLY

GOOD FOR CONSTRUCTION PROJECTS.

I WOULD SAY ALL OVER THE STATE.

AND THAT WAS CERTAINLY TRUE FOR

OURS.

>> THE AMOUNT OF POWER THAT'S

BEING PRODUCED, SORT OF DUMB IT

DOWN FOR FOLKS.

HOW MANY HOUSES, HOW MANY

HOUSEHOLDS ARE WE TALKING ABOUT

HERE?

>> I THINK WHAT WE'VE DESCRIBED

IN GENERAL IS USUALLY ABOUT

15,000 HOMES.

>> AND THAT POWER IS GOING

WHERE?

CHITTENDEN COUNTY ONLY?

>> THE POWER IS GOING WHEREVER

IT'S NEEDED IN THE VERMONT, YOU

KNOW, ENERGY SPACE.

VEC, VERMONT ELECTRIC

COOPERATIVE IS PURCHASING SOME

OF THE POWER AT COST OFF OF THE

PROJECT AND OUR CUSTOMERS WOULD

SEE IT AT COST.

SO SIMPLY PUT, THE POWER FLOWS

INTO THE GRID AND THROUGH THE

POWER PURCHASE AGREEMENT WE DID

WITH VEC, THEY WILL BE POWERING

SOME OF THEIR CUSTOMERS' HOMES

WITH IT AND GREEN MOUNTAIN WILL

BE POWERING SOME OF OURS.

>> I THINK THAT'S AN IMPORTANT

POINT BECAUSE A LOT OF FOLKS IN

THE KINGDOM WHO HAVE EXPRESSED

OPPOSITION TO THIS PROJECT HAVE

LOOKED AT IT LIKE, OKAY, IT'S

OKAY TO BUILD THIS MASSIVE THING

HERE IN THE KINGDOM AND IT'S

GOING TO BE BENEFITTING THE

FOLKS IN THE BURLINGTON AREA,

BUT THAT'S NOT TRUE.

>> NO, ABSOLUTELY NOT.

NO, IN FACT, THAT'S -- VERMONT

ELECTRIC COOPERATIVE HAS BEEN A

TREMENDOUS PARTNER.

WE'VE REALLY ENJOYED WORKING

WITH THEM ON THIS.

DAVE HULQUIST, THEIR CEO, HAS

DONE A GREAT JOB MEETING WITH

COMMUNITIES AND CUSTOMERS, AND

SO NO, IT WILL BE POWERING A LOT

OF CUSTOMERS IN THAT AREA

WITHOUT A DOUBT.

>> YOU MENTIONED, MARY POWELL,

THAT IT'S ABOUT NINE CENTS A

KILOWATT HOUR AND I KNOW THAT A

LOT OF CONVERSATIONS HAVE

INVOLVED WHAT IT COST TO BUY

POWER IN THE OPEN MARKET, A LOT

LESS EXPENSIVE THAN IT'S BEEN IN

A WHILE.

I BELIEVE IT'S LESS THAN NINE

CENTS AT THIS POINT.

>> YES, YES.

>> WHY GO AHEAD WITH A PROJECT

THAT IS COSTING MORE THAN WHAT

YOU COULD BUY POWER FROM ON THE

OPEN MARKET OR FROM OTHER

SOURCES LIKE, FOR EXAMPLE,

NUCLEAR OUT OF STATE, WHICH IS

ANOTHER SOURCE WHERE GMP IS

GETTING POWER?

>> RIGHT, SURE.

GREAT QUESTION.

ONE OF THE THINGS THAT'S REALLY

IMPORTANT TO REMEMBER WOULD

BE -- A FEW THINGS.

ONE IS IN ANY PORTFOLIO, ANY

POWER PORTFOLIO, WHAT YOU WANT

IS DIVERSITY OF SOURCES.

IT'S VERY SIMILAR, PEOPLE MIGHT

THINK ABOUT THEIR 401(K)'S OR

FINANCIAL PORTFOLIO.

YOU WANT DIVERSITY BECAUSE YOU

WANT DIFFERENT THINGS PROVIDING

DIFFERENT TYPES OF VALUE

PROPOSITION FOR YOU AS YOU LOOK

TO THE FUTURE.

SO ONE OF THE THINGS THAT'S VERY

IMPORTANT IS TO HAVE SOME OWNED

RESOURCES IN THE PORTFOLIO.

ONE OF THE THINGS THAT REALLY

INFORMED ME ABOUT THIS PROJECT

WAS, AS I DUG DEEPER INTO OUR

POWER SUPPLY AND LOOKING AT WHAT

WE PAY FOR DIFFERENT, YOU KNOW,

PIECES OF THE PIE, WHAT I SAW

VERY CLEARLY WAS THAT ACTUALLY,

BECAUSE OF THE WISDOM OF THOSE

WHO CAME GENERATIONS BEFORE ME,

AS IN PROBABLY 40 AND 50 YEARS

AGO, THE HYDRO UNITS THAT WE

ACTUALLY OWN AND OPERATE FOR

VERMONTERS ARE THE CHEAPEST

SOURCES OF POWER.

IT'S NOT -- IT WASN'T VERMONT

YANKEE AT THE TIME, IT WASN'T

HYDRO QUEBEC, IT WASN'T ANY OF

THESE OTHER SOURCES.

IT WAS ACTUALLY OUR OWNED HYDRO

FACILITIES AND THE REASON IS

BECAUSE WE OWNED THEM.

WHEN YOU PURCHASE FROM SOMEBODY

ELSE, I ALWAYS USE IT'S THE OWN

VERSUS RENT ANALOGY.

IT MIGHT COST YOU A LITTLE BIT

MORE TO OWN SOMETHING UP FRONT

THAN YOU COULD RENT IT FOR DOWN

THE STREET, BUT THERE IS A POINT

AT WHICH THAT FLIPS AND IT

BECOMES MUCH MORE COST EFFECTIVE

THAT YOU OWN IT VERSUS RENT IT.

>> SO THAT NINE CENTS POWER

WON'T STAY STEADY, IT COULD BE

LESS?

>> OH, ABSOLUTELY, BECAUSE YOU

OWN IT.

JUST LIKE THE HYDROS, YES, AT

ONE POINT IT TOOK A BIG CAPITAL

INVESTMENT, IT TOOK SOME DEBT,

BORROWING, RIGHT?

BUT THEN ONCE THEY'RE PAID OFF,

THE WAY THE REGULATED UTILITY

MODEL WORKS IS WE DON'T MAKE A

DIME OFF OF THE POWER THAT FLOWS

TO YOUR HOMES.

THAT GOES AT COST.

SO ONCE THAT'S PAID, IT FLOWS AT

COST TO CUSTOMERS.

SO THIS, YOU KNOW, AS A STARTING

POINT -- THE OTHER THING IS TO

LOOK AT THAT WE HAVE, WE HAVE

POLICY INITIATIVES IN OUR STATE.

WE HAVE LEGISLATIVE INITIATIVES

AROUND THE AMOUNT OF RENEWABLES

THAT WE SHOULD -- RIGHT.

SO WE NEEDED TO HAVE MORE

RENEWABLES IN OUR PORTFOLIO,

WHETHER WE BUILT IT FOR

VERMONTERS OR RENTED IT BY

PURCHASING WIND ENERGY FROM,

LET'S SAY, UPSTATE NEW YORK.

HUGE DIFFERENCE.

YOU KNOW, THE BEST PRICE I'VE

SEEN ON THE MARKET IS AT LEAST A

COUPLE CENTS, IF NOT MORE,

HIGHER.

SO EVEN OUT OF THE GATE AS YOU

COMPARE IT TO OTHER WIND

RESOURCES WE HAD AVAILABLE TO

US, IT'S MORE COST EFFECTIVE.

SO TO US, IT REALLY LOOKS LIKE A

TRIPLE WINNER FOR CUSTOMERS.

>> AND THEN VERY QUICKLY, WHEN

WILL THE WIND TOWER PROJECT STOP

TURNING AND MAKE POWER?

WHEN DO YOU PLAN TO DECOMMISSION

IT?

>> YOU KNOW, THE LIFE OF IT WHEN

YOU GET YOUR CERTIFICATE OF

PUBLIC GOOD IS FOR -- I WANT TO

GET THIS PRECISE AND I MAY NOT,

SO I BELIEVE IT'S ABOUT A

25-YEAR PERIOD.

IN REALITY, THAT IS THE SAME AS

ANY OTHER SOURCE OF GENERATION

THAT WE BUILD, AND IN REALITY,

WHAT USUALLY HAPPENS IS YOU

WOULD GO BACK AND YOU WOULD LOOK

TO REPOWER IT.

WE HAVE THE FLEXIBILITY TO MAKE

SURE THAT WE CAN GO BACK AND

REPOWER AND KEEP IT RUNNING,

MUCH LIKE WE'VE DONE WITH THE

HYDRO UNITS, SO OUR HOPE IS THAT

IT'S SERVING VERMONTERS FOR AS

LONG AS POSSIBLE AND AS LONG AS

IT IS A COST EFFECTIVE SOLUTION

FOR RENEWABLE ENERGY, WHICH WE

BELIEVE WILL BE FOR A LONG TIME.

>> WE HAVE A LOT OF OTHER ISSUES

TO GET TO.

MARY POWELL, THE CEO OF GREEN

MOUNTAIN POWER.

WE'RE TALKING ABOUT YANKEE AMONG

OTHER ISSUES.

STAY WITH US, WE'LL BE RIGHT

BACK AFTER THE BREAK.

>> WELCOME BACK, EVERYONE.

WE ARE TALKING POWER WITH MARY

POWELL.

SHE'S THE CEO OF GREEN MOUNTAIN

POWER.

>> LET'S TALK ABOUT THE MERGER

NOW BETWEEN GMP AND CVPS.

RECENTLY, I THINK IT WAS A

COUPLE WEEKS AGO NOW, YOU FOLKS

ANNOUNCED WHAT SOUNDED LIKE A

PRETTY HISTORIC ANNOUNCEMENT

ABOUT LOWER RATES.

FIRST TIME IN 24 YEARS, IS THAT

CORRECT?

>> YES.

>> HOW DID THAT COME ABOUT AND

HOW IS THAT DIRECTLY RELATED TO

THIS MERGER?

>> GREAT QUESTION.

SO OUR MERGER, WE'RE ONLY SIX

WEEKS INTO OUR MERGER AND SO

FAR, I REALLY HAVE BEEN PLEASED

AT NOT JUST OUR ABILITY FOR THE

FIRST TIME IN A REALLY LONG TIME

TO ACTUALLY LOWER RATES, BUT

I'VE ALSO BEEN PLEASED WITH THE

FACT THAT DUE TO SOME BAD

WEATHER -- I HAVEN'T BEEN

PLEASED ABOUT THE BAD WEATHER,

BUT I'VE BEEN REALLY PLEASED TO

SEE THE TEAMS COMING TOGETHER

AROUND RESTORATION FOR THE

STATE.

SO WE'VE SEEN THAT WE'RE ABLE TO

LOWER COSTS IN OUR FIRST RATE

FILING SINCE THE MERGER AND

WE'VE ALSO SEEN THAT WE'VE BEEN

ABLE TO IMPROVE OUR PERFORMANCE

IN RESTORATION.

AND THAT FOR US IS REALLY WHAT

THE MERGER IS ABOUT.

IT'S ABOUT IMPROVING SERVICE TO

VERMONTERS AND LOWERING COSTS AS

MUCH AS WE POSSIBLY CAN.

SO THE DECREASE CAME ABOUT

THROUGH A LOT OF HARD WORK ON

EVERY ASPECT OF OUR BUSINESS

THAT IS SEEING AN INCREASE IN

COST, AND WE'RE LIKE ANY OTHER

BUSINESS IN THAT WE HAVE ALL

SORTS OF PRESSURES ON RATES, I

WOULD SAY THE MOST SIGNIFICANT

OF WHICH IS THE COST OF THE NEW

ENGLAND TRANSMISSION SYSTEM, OF

WHICH WE ARE RESPONSIBLE FOR

PAYING A PORTION OF THAT AND

IT'S AN AGING INFRASTRUCTURE AND

THERE'S LITERALLY BILLIONS OF

DOLLARS OF INVESTMENT THAT NEED

TO BE COVERED, SOME OF THAT

NEEDS TO BE BORNE BY THE VERMONT

CUSTOMERS.

SO WE HAVE SOME REAL PRESSURES

ON RATES.

ONE OF THE MANY REASONS WE WERE

PASSIONATE ABOUT THE MERGER WAS

WE SAW IT AS A HISTORIC

OPPORTUNITY TO LOWER COST AND

IMPROVE OUR COST EFFECTIVENESS

FOR VERMONTERS.

SO IN FACT, THAT REALLY WAS THE

PIECE, EVEN SIX WEEKS INTO THE

MERGER, THAT ALLOWED US TO GO

FROM SOMETHING THAT LOOKED LIKE

IT WAS GOING TO, AT BEST, BE

KEEPING RATES FLAT OR A LITTLE

BIT HIGHER, TO ACTUALLY TURNING

TOWARDS A DECREASE.

>> WHAT'S SPECIFICALLY WITHIN

THE MERGER, WAS IT LIKE

ADMINISTRATIVE COSTS WERE

REDUCED OR --

>> YEAH, WE COMMITTED THROUGH

OUR REGULATORY PROCESS TO A

SPECIFIC LEVEL OF SAVINGS WE

NEEDED TO DELIVER EACH YEAR IN

THE FIRST FEW YEARS, AND THOSE

ARE LARGELY COMING OUT OF SOME

OF THE ADMINISTRATIVE COSTS.

AS YOU KNOW, WE COMMITTED TO

ALSO NO LAYOFFS, SO WE'RE DOING

THIS IN A WAY THAT IS HARNESSING

THE AGING OF VERMONT'S

POPULATION.

MOST SECTORS ARE SEEING THAT

AGING.

YOU SEE IT VERY CLEARLY IN THE

UTILITY INDUSTRY WHERE WE HAVE

ABOUT 40% OF THE WORKFORCE THAT

WILL BE RETIRING PROBABLY OVER

THE NEXT FIVE YEARS, SO A HUGE

PART OF IT IS WE'RE HARNESSING

THAT AS WE RESTRUCTURE THE

ORGANIZATION TO BE AS EFFECTIVE

FOR VERMONTERS AS POSSIBLE GOING

FORWARD.

>> WE HEARD YOU SAY THAT THERE'S

A LOT OF COSTS OUT THERE THAT

HAVE TO BE DEALT WITH, SO IS

THIS A ONE-TIME DECREASE OR WILL

VERMONTERS SEE A DECREASE AGAIN?

>> I REALLY AM WORKING HARD TO

KEEP THE COSTS AS LOW AS WE

POSSIBLY CAN.

SO OUR GOAL, WITHOUT A SHADOW OF

A DOUBT, WHAT IS IT SHOULD BE IN

MY MIND, WHICH IS TO KEEP THEM

AS LOW AS WE CAN.

IF WE CAN DELIVER ANOTHER

DECREASE, WE'D BE REALLY

THRILLED.

RIGHT NOW, THAT LOOKS VERY HARD

BECAUSE OF ALL THESE OTHER

PRESSURES, BUT ONE THING I KNOW

FOR SURE IS RATES WILL BE A LOT

LOWER THAN THEY OTHERWISE WOULD

HAVE BEEN BECAUSE WE'RE GOING TO

BE DELIVERING THESE COST SAVINGS

THAT, AGAIN, HAVE TO BE VERY

WELL DOCUMENTED AND WILL BE

SCRUBBED BY, YOU KNOW, TWO

LAYERS OF REGULATORS IN THE

STATE OF VERMONT.

>> LET'S TALK ABOUT VERMONT

YANKEE A LITTLE BIT.

IF VERMONT YANKEE IS ALLOWED TO

KEEP RUNNING, WILL GREEN

MOUNTAIN POWER REEVALUATE AND

DECIDE TO GET POWER FROM YANKEE

IN THE FUTURE?

>> WE HAVEN'T HAD ANY

DISCUSSIONS WITH THE FOLKS AT

VERMONT YANKEE OR ENTERGY IN A

WHILE.

WE, AS YOU KNOW, PROBABLY WORKED

A COUPLE YEARS TO SEE IF THERE

WAS A WAY TO WORK OUT SOMETHING

FROM AN ECONOMIC PERSPECTIVE,

AND, YOU KNOW, CANDIDLY, WE

NEVER GOT THERE.

WE NEVER GOT TO SOMETHING THAT

WE FELT WAS PRUDENT FOR OUR

CUSTOMERS.

SO IN FACT, WE TURNED TO NEXT

TARA ENERGY, WHICH HAPPENS TO BE

ONE OF THE LARGEST RENEWABLE

ENERGY DEVELOPERS IN THE

COUNTRY, BUT THEY ALSO HAPPEN TO

OWN A COUPLE NUCLEAR PLANTS AND

WE STRUCK A DEAL WITH THEM FOR

POWER FROM SEABROOK NUCLEAR

PLANT AT WHAT WE THOUGHT WAS A

VERY COST-EFFECTIVE RATE FOR

VERMONTERS.

SO WE DO HAVE SOME OPENING IN

OUR PORTFOLIO, SO CERTAINLY IF A

REALLY STRONG, COMPELLING DEAL

WAS, WAS, YOU KNOW, PROPOSED TO

US, WE WOULD CONSIDER IT, BUT

WE'RE REALLY IN A STRONG

POSITION WHERE WE DON'T NEED TO

BE SHOPPING FOR THAT KIND OF A

DEAL AT THIS TIME.

>> BUT NOT OFF THE TABLE IF A

REALLY SOLID OFFER CAME IN?

>> YEAH, I WOULD NEVER -- I

WOULDN'T SIT HERE TODAY AND SAY

ANYTHING IS OFF THE TABLE IN THE

FUTURE IN TERMS OF IF THERE WERE

A REALLY GREAT POWERFUL DEAL

THAT CAME UP.

YOU KNOW, THAT IS NOT WHAT

HAPPENED IN OUR CASE, YOU KNOW,

AND FRANKLY TO YOUR POINT ABOUT

THE POWER MARKETS, THEY'RE AT

REALLY GOOD COMPETITIVE RATES

RIGHT NOW, SO OUR OPENING IN OUR

PORTFOLIO, WE'RE TAKING

ADVANTAGE OF THOSE LOW POWER

MARKETS AND BUYING ENERGY AT A

LOWER COST THAN THE CURRENT

CONTRACT EXPIRED WITH VERMONT

YANKEE, SO WE'RE IN REALLY GOOD

SHAPE RIGHT NOW.

>> WHAT DO YOU THINK WENT WRONG

WITH THOSE POWER TALKS THAT NO

DEAL WAS EVER REACHED?

>> I WOULD JUST SAY FROM OUR

PERSPECTIVE, WE JUST -- WE WERE

WORKING HARD ON -- WE HAD

LAUNCHED AN ENERGY VISION WHICH

TALKED ABOUT RAMPING UP

RENEWABLES IN A COST-EFFECTIVE

WAY, WHICH WE'RE DOING.

WE TALKED ABOUT WORKING WITH

HYDRO QUEBEC TO COME UP WITH A

REALLY STRONG EFFECTIVE CONTRACT

WHICH, AS YOU KNOW, WE DID

BECAUSE I REMEMBER YOU WERE

THERE FOR THE GREAT ANNOUNCEMENT

OF IT, WHICH WE'RE REALLY PROUD

OF THAT TRANSACTION, AND THEN WE

HOPED TO REALLY TAKE ADVANTAGE

OF THE LOW-CARBON NATURE OF

VERMONT YANKEE IF IT WERE DEEMED

TO BE SAFE TO OPERATE, AND WE

WANTED A NEW CONTRACT.

WE JUST -- YOU KNOW, FROM MY

PERSPECTIVE, WE NEVER GOT ACROSS

THE FINISH LINE BECAUSE IT'S

JUST LIKE ANY OTHER COMMERCIAL

DEAL YOU'RE TRYING TO DO.

IF YOU CAN'T GET THE PARTY TO

WHAT YOU THINK IS A GOOD STRONG

ECONOMIC DEAL, YOU KNOW, YOU

STOP, AND THAT'S WHAT HAPPENED

WITH US.

WE JUST -- WE NEVER COULD GET

EVEN CLOSE TO WHAT I FELT LIKE

WAS -- OR THE TEAM FELT WAS LIKE

A GOOD ECONOMIC DEAL FOR

VERMONTERS IN TERMS OF THE COST

OF POWER.

WHEN WE TURNED TO NEXTERRA AND

STARTED NEGOTIATING WITH THEM,

WE WERE ABLE TO WITHIN A FEW

MONTHS GET TO WHAT WAS A REALLY

STRONG VALUE PROPOSITION FOR OUR

CUSTOMERS, SO WE WERE ABLE TO

TAKE, YOU KNOW, ABLE TO MEET

THAT OBJECTIVE THAT WE WANTED OF

HARNESSING THE LOW-CARBON, VERY

STABLE, RELIABLE RESOURCE THAT

THAT CAN PRESENT AS WE RAMPED UP

OTHER RESOURCES IN THE FUTURE

AND WE WERE ABLE TO DO THAT WITH

THEM, SO THAT'S WHAT WE'VE DONE.

>> DURING THE MERGER BETWEEN GMP

AND CVPS, THERE WAS THIS

CONTROVERSY OVER THE

$21 MILLION.

AARP WAS SAYING THAT, YOU KNOW,

THAT 21 MILLION USED DECADES AGO

TO BAIL OUT CVPS.

THE PUBLIC SERVICE BOARD

DETERMINED THAT THAT 21 MILLION

SHOULD BE PUT BACK INTO ENERGY

EFFICIENCY PROGRAMS, WHICH YOUR

COMPANY WAS PUSHING FOR.

HAS THAT STARTED?

WHAT KIND OF PROGRAMS HAVE BEEN

INITIATED?

HOW IS IT GOING TO BENEFIT THE

CUSTOMER IN THE LONG RUN?

>> YOU'RE ABSOLUTELY RIGHT.

WHAT HAPPENED IS THE REGULATORS

LOOKED AT THE ISSUE AND I THINK

THEY ACTUALLY -- THOUGH I WOULD

ADD TO WHAT YOU SAID.

THEY WENT TO GREAT LENGTHS TO

REALLY DOCUMENT THE HISTORY OF

THE DECISION AROUND THAT

RECAPTURE OF THAT 21 MILLION,

AND CANNED DIDDLY SET THE --

CANDIDLY SET THE RECORD STRAIGHT

BECAUSE PART OF THE CHALLENGE

FOR OUR COMPANY WAS CERTAINLY

WHAT I WOULD CONSIDER VERY

INACCURATE MESSAGING ABOUT THE

ORIGIN OF THE 21 MILLION.

SO THAT WAS ANOTHER THING.

THEY REALLY TOOK TIME TO SET THE

RECORD STRAIGHT BECAUSE THERE

WAS NO LOAN TO CVPS.

IN FACT, THE COST OF THE HYDRO

QUEBEC CONTRACT WAS NOT ALLOWED

IN RATES FOR A NUMBER OF YEARS.

CUSTOMERS DIDN'T PAY FOR THE

COST OF POWER.

THE COMPANY HAD TO ABSORB THAT.

CUSTOMERS DID NOT PAY FOR THAT

AND WHAT HAPPENED IS THEN AT ONE

POINT, THE REGULATORS SAID,

OKAY, NOW WE ACTUALLY THINK YOU

CAN START CHARGING CUSTOMERS FOR

THE POWER THAT'S POWERING THEIR

HOMES, WHICH WAS HYDRO QUEBEC,

SO IT WAS AT THAT POINT THAT

THEY SAID THE CUSTOMERS SHOULD

START PAYING FOR THAT POWER AND

IT WAS THE -- THE RECAPTURE WAS

SIMPLY TO SAY, BUT IF -- AND

ACTUALLY THE HYDRO QUEBEC

CONTRACT, AS MANY PEOPLE KNOW,

TURNED AROUND TO BE A VERY GOOD

DEAL FOR VERMONTERS ACTUALLY

WITHIN A COUPLE YEARS OF THAT

DECISION, SO THERE WAS NO LOAN

TO BE PAID BACK, BUT THERE WAS

THIS SHARING MECHANISM THAT THE

REGULATORS HAD SET UP.

SO THEY REALLY WENT TO GREAT

PAINS TO SPELL THAT OUT AND TO

SET THE RECORD STRAIGHT.

AND THEN, YES, THEY APPROVED

THIS PROGRAM THAT WE HAD

UTILIZED BACK IN 2006 AND '07

WHEN OUR COMPANY, GREEN MOUNTAIN

POWER, SOUGHT A NEW OWNERSHIP

STRUCTURE WITH GAZ METRO WHEREBY

WE MADE THESE INVESTMENTS AND WE

WENT THROUGH A LOT OF PROCESS TO

DOCUMENT THEM AND SHOW THAT, IN

FACT, WE MORE THAN DOUBLED THE

RETURN OF VALUE TO CUSTOMERS IN

THOSE INVESTMENTS.

SO IT'S VERY MUCH THE SAME THING

AND THE REGULATORS WILL HOLD OUR

FEET TO THE FIRE TO DOCUMENT AND

PROVE $46 MILLION OF VALUE THAT

NEEDS TO BE RETURNED TO

CUSTOMERS THROUGH $21 MILLION OF

INVESTMENTS.

SO THE --

>> AND HAVE YOU STARTED THAT

INVESTMENT?

>> THE PROGRAM IS BEING DESIGNED

AND I WOULD SAY THAT INVESTMENTS

PROBABLY WILL START WITHIN THE

NEXT COUPLE OF MONTHS, BUT WE'RE

JUST SIX WEEKS INTO THE MERGER,

SO ALL OF THAT IS GOING THROUGH

THE PROCESS OF BEING DOCUMENTED

AND PUT TOGETHER.

>> ALL RIGHT.

WE HAVE TO LEAVE IT THERE.

MARY POWELL WITH GREEN MOUNTAIN

POWER, THE NEW CEO OF THE MERGED

COMPANY.

THANK YOU FOR JOINING US THIS

MORNING.

>> THANK YOU.

MY PLEASURE.

>> THANK YOU, MARY.

>> AND THANKS TO YOU, OF COURSE,

AT HOME FOR WATCHING.

HAVE A GREAT SUNDAY, EVERYONE.

>> SEE YOU SOON.

CAPTIONING PROVIDED BY.

CAPTION ASSOCIATES, LLC

www.captionassociates.com

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