Last week, Green Mountain Power, one of Vermont's two biggest electric utilities, struck a deal with NextEra Energy Resources.
The purchase power agreement, which must undergo a state rate review, would guarantee a price of 4.66 cents per kilowatt-hour to Green Mountain Power customers for 23 years.
The electricity would come from the 1,245-megawatt Seabrook nuclear power plant in southern New Hampshire, owned by NextEra.
Mary Powell, president and CEO of Green Mountain Power, lauded the deal, which was forged over the last three months.
“This agreement is very favorable for our customers, and delivers on the vision Green Mountain Power launched three years ago to move to a cleaner, greener future in a cost effective way,” Powell said in a statement.
“We set out to accomplish this by ramping up cost-effective renewables while we built a solid portfolio that is low in carbon, cost, and is incredibly reliable,” she continued. “This provides the perfect platform for our continued efforts to pursue cost- effective renewable energy options.”
NextEra is a large Florida-based utility that owns more than 100 power generating facilities in 26 U.S. states and Canada.
Over the next few years, Green Mountain Power will take 15 megawatts of power from Seabrook. In 2015, the utility will have access to 60 megawatts of power from the nuclear facility. Over the life of the contract, the amount of electricity will decrease to about 40 megawatts.
Green Mountain Power also negotiated an additional 25 megawatts of power for other Vermont utilities at the 4.66-cent rate.
Powell said the company's agreement with NextEra rounds out the Vermont utility's renewable portfolio. Green Mountain Power, owned by the Canadian company Gaz Metro, has also sealed a contract with Hydro Quebec and plans to build Kingdom Community Wind in Lowell.
The electric utility will derive 20 percent of its power from Seabrook, according to Dorothy Schnure, spokeswoman for Green Mountain Power. Hydro Quebec will represent about one-third of the company's energy portfolio, Kingdom Community Wind will offer 8 percent, and local hydro will generate between 6 percent and 8 percent of the energy Green Mountain Power needs to provide power for its 95,000 customers.
In all, Green Mountain Power has secured more than 70 percent of the energy it needs in long-term contracts or projects, Schnure said.
Alternatives to Vermont Yankee
The company has been seeking alternatives to power from Vermont Yankee because of uncertainty about whether the nuclear power plant will continue operations after its state Certificate of Public Good expires in March of next year.
Schnure said, “This isn't about Vermont Yankee. It's not a referendum on the Vermont Yankee plant; it's about fulfilling our vision for our customers. We didn't have an agreement with Entergy at this point.”
The last offer from Entergy was 6 cents per kilowatt-hour.
Liz Miller, commissioner of the Department of Public Service, said the agreement must be reviewed by the state, but added that the deal is “another example of utilities [fulfilling] diverse power needs at a price that's good for Vermonters.”
“From a ratepayer point of view, I do want to see diversity in the power portfolio and a ratepayer impact that appears favorable,” Miller said in an interview.
Is it really green?
Environmentalists are disappointed with the Green Mountain Power deal.
Chris Kilian, the director of the Conservation Law Foundation's operations in Vermont, said that the agreement is “not what we would have chosen.”
“We don't think replacing nukes with nukes is the right way to go,” Kilian said. “We would rather see an earlier transition away from nukes and more polluting sources now, and a real focus on replacing these power sources with renewable energy and very aggressive energy efficiency implementation.”
Kilian estimates that the state could replace about 10 percent of its power needs with energy efficiency measures that are “cheaper than any power source out there.”
“Our concern with nukes is that they are highly subsidized and not economically viable,” Kilian said. “The only way to make them competitive is with huge tax subsidies, and we think that's not appropriate. There really is no solution for the long-term storage of radioactive waste.”
The Conservation Law Foundation will be watching and evaluating the deal as it goes through the regulatory process, Kilian said.
James Moore, the clean energy advocate for the Vermont Public Interest Research Group (VPIRG), said the NextEra deal offers a silver lining.
“It exposes Entergy's argument that it has the best nuclear game in town,” Moore said. “It shows all the fearmongering about rates going up is completely unfounded.”
Moore said that the state would be better off relying on more local renewable power sources. He said tying the state to 23 years of nuclear power is problematic.
“Did we learn nothing from the fact that Vermont Yankee at the end of its life is showing real reliability problems?” he asked.