Thursday, March 11, 2010

Hydro Quebec Deal

Vermont utilities have just signed a major deal with Hydro Quebec, for 225 MW, 16 hours a day, starting in 2012. They are not telling the price of this power.

The utilities are probably paying more than VY was going to charge, which was 6.1 cents/kWh. The HydroQuebec deal seems to have power prices that depend on the market ("ties prices to the wholesale energy market") but with the market swings modified a bit. Are the utilities being fiscally responsible to their ratepayers? You can always buy power, if you are willing to pay whatever-it-takes.

Wikimedia commons graphic of the spillway at Robert-Bourassa generating station. According to Wikipedia, this spillway can deal with a water flow twice the size of the St. Lawrence River.


DV8 2XL said...

Yes, but Vermont Governor James Douglas was named an officer of the Order of Quebec, the Provence's highest honor.

Hydro-Québec is saying up here in the French press that the a 26 year-power deal is worth an estimated $1.5-billion USD.

They are also saying this makes Vermont Hydro-Québec's largest export market.

Meredith Angwin said...

Thank you for the comment, DV8 2XL. I greatly appreciate a view from Quebec! Not sure the Vermont governor should be so rewarded north of the border. It might be a win-win deal, but then again, it might not be. It might be a win-Quebec, lose-Vermont deal. I don't know yet.

Last year at a public meeting in November, a man from Department of Public Service (DPS) said that we couldn't get more power from HQ down here on the existing transmission lines. Are we upgrading the lines? Building new ones? Was the DPS guy wrong last year? The story isn't complete yet, to put it mildly.

Sheldon said...

I have heard the $1.5 billion number as well, but if the math is done there is no way that can be correct. $1.5 billion over 26 years for 225 MW would be just under $30/MW. Considering there current deal is over $65/MW this is not possible. I can't wait to see the actual figures though as that will tell the whole story. I have no doubt they will be a higher price then offered by VY.

DV8 2XL said...

More from the Montreal press.

The Montreal Gazette reports that Vermont will pay 6.5 cents per KWh vs the 4.0 cents per KWh you now pay Vermont Yankee.

They also report that Hydro-Québec is going to build a 1200MW transmission line to Massachusetts via New Hampshire that will also have capacity to serve Vermont.

Le Devoir (french) is also claiming that there is a 'memorandum of agreement'(sic) that would see the deal possibly double if Vermont Yankee actually closes.

Jack Gamble said...

Amazing isn't it? Vermont currently pays 4.1 cents per kWHr, One third of the national average! VY comes back with an offer to hold rates at 6.1 cents per kWHr for the next 20 years, still one half of the current national average. The Vermont legislature SLAMMED Entergy for the offer of 6.1 cents from VY and then goes and buys hydro from Canada without even naming a price?

Isn't that just what Vermont needs, higher electricity bills, fewer jobs, and more imported energy! I certainly hope VT voters are paying attention.

Meredith Angwin said...

Some of the reports here also mention a memorandum of understanding (MOU). MOUs are actually contracts..that is, a contract in which some of the signatories are government agencies. For example, when Entergy bought Vermont Yankee from the consortium of utilities, the Public Service Board, Entergy and the utilities signed an MOU about the purchase.

Now, what is interesting to me is that the VY MOU is available on the web, and MOUs should be available, because they are public documents. They are not releasing this one because it has contractual terms in it? Really? They ALL have such terms, and they are ALL public documents. (Unless it's an MOU with the CIA I suppose.)

Back in the day, when I was in geothermal, releasing a Known Geothermal Resource Area for lease was a process that followed the MOUs between the Geological Survey, Bureau of Land Management, and other interested entities. MOUs are like green cars..once you begin noticing them, they are all over the place.

sheldon said...

Actually the Montreal Gazette article states that Vermont CURRENTLY pays 6.5 cent/KW and that the new contract will be at "market prices". So if we were paying 6.5 cents/KW before then its a sure thing the new cotract is for a higher amount.

Meredith Angwin said...

Hi Sheldon. I just called Dave Lamont of the Department of Public Service, and he said that the negotiations are not yet finalized. Which is why we can't figure anything out. I asked him if the MOU would eventually be public, and he said the terms would be public, though he wasn't sure about the document itself. So we read "6.5" and we read "Market Rates", and it is all a bit confusing.

An excellent blog on the subject.

Anonymous said...

I remember "way back when" when those spilways were labeled environmental disasters because of the mercury that would then get into the precious waters of the great north woods or sone such tripe. My how things change. I thought all of the northern indigenous peoples wre going to be displaced and other humanitarian disasters would occur.