August 2, 2011 / 1:17 PM / 9 years ago

Central Vermont buys power to replace Vermont Yankee

* Vermont Yankee reactor could shut in March 2012

* Central Vermont gets power at low prices

NEW YORK, Aug 2 (Reuters) - Central Vermont Public Service CV.N signed two new power supply contracts, filling the 2012 gap in its portfolio created by the end of the contract with the Vermont Yankee nuclear power plant.

The 620-megawatt Vermont Yankee reactor could shut in March 2012 unless its owner, New Orleans based Entergy (ETR.N), convinces state politicians to allow the plant to continue operating or wins a court case in September blocking the state from shutting the plant.

Vermont Yankee represents 55 percent of the state’s generating capacity and its shutdown could hurt the reliability of the power system in parts of Vermont, New Hampshire and Massachusetts, the region’s power grid operator has said.

“These contracts serve to ensure our reliable power supply through the end of 2012 at very competitive prices,” Central Vermont President and CEO Larry Reilly said in a release Monday.

Central Vermont is the biggest power company in Vermont serving about 159,000 customers. Last month, Central Vermont agreed to merge with the state’s second largest power company, Green Mountain Power, which is owned by Gaz Metro of Quebec.

Central Vermont said it conducted an Internet auction to meet needed supplies. When the bidding closed, the power company signed two contracts with an average price of about $47.50 per megawatt-hour, or 4.75 cents per kilowatt-hour.

The contracts will provide about 570,000 MWh of energy, or about 20 percent of Central Vermont’s supply for $27 million.

Central Vermont said it currently pays Vermont Yankee 4.4 cents per kWh and Hydro-Quebec about 6.2 cents per kWh. Power prices in New England have been generally low recently but did reach several hundred dollars per MWh during the recent heatwave.

One contract is for energy supplied 24 hours a day from April 1, 2012 through the end of next year, while the other contract will provide peak and off-peak power during specific periods when Central Vermont had remaining supply gaps,

The contracts will also fill Central Vermont’s energy needs during the planned Vermont Yankee refueling outage this fall, the utility said.

Central Vermont did not disclose the winning bidders.

To replenish its portfolio after the current Vermont Yankee and Hydro-Quebec contracts end, Central Vermont has said in the past it signed several other longer-term agreements, most for renewable power, including new contracts with Hydro-Quebec, and deals for wind and hydro power from Vermont and New Hampshire. (Reporting by Scott DiSavino; Editing by John Picinich)

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