TheVermont Legislature has created a new group to explore the possible purchase ofas many as 13 hydroelectric dams from TransCanada Corp., 11 years after the state missed theopportunity to do so when the previous owners went into .
The13 hydro power plants are among the $7 billion in assets that TransCanada isconsidering to sell to fund a proposed $10.2 billion acquisition of ,which was announced last month. TransCanada has said it plans to"monetize" its northeastern U.S. power generation assets.
VermontGov. Peter Shumlin announced the formation of a new working group April 5 thatwill "thoroughly but expeditiously" explore purchasing all or some ofthe available hydro resources. The group is expected to make its report to thegovernor, Vermont House Speaker Shap Smith and Senate President Pro Tem JohnCampbell in the coming weeks.
"Ifeel like we missed an opportunity last time around to purchase theseassets," Shumlin said in a statement. "There is clearly anopportunity now to look at it again, and we have assembled some of the best andbrightest minds in finance and energy to explore the opportunity to furthersecure our clean energy future and good power rates for Vermonters."
TransCanadapurchased the hydro plants from USGen New England in April 2005 as part of a$505 million deal that included 567 MW of generating capacity. Later that sameyear the town of Rockingham, Vt. attempted to purchase the Bellows Falls hydro dam for$72 million, but residents voted against the initiative.
TransCanadaspokesperson Jennifer Link said April 6 that the Legislature's interest is"good news." Link was unable to release too many details about thepossible deal, as JPMorgan Chase& Co. is handling the sale of the assets including the hydrofacilities.
Linksaid the decision toseek a buyer for TransCanada's merchant assets in the Northeast is "afinancing decision we needed to make in order to realize the opportunity togain a foothold in the Marcellus and Utica basins." The Columbia deal wasannounced March 17. Link said a total of 4,600 MW of generating capacity is upfor sale, and the hydro resources on the Connecticut and Deerfield rivers makeup about 560 MW of that. SNL Energy data puts the hydro plants — which arelocated in Massachusetts, New Hampshire and Vermont — at a total of 581 MW inoperating capacity.
Theworking group will explore whether a full or partial purchase is cost-effectiveand evaluate the benefits to Vermont's economy, utility ratepayers and cleanenergy portfolio. The group will also explore possible partnerships with otherpublic or private sector entities, as well as expected maintenance costs andlicensing issues that could crop up.
"Thisis an exciting opportunity for the state of Vermont," Smith said. "Ina day and age when market fluctuations and the uncertainties of climate changehave wreaked havoc on energy supplies and folks' pocket books, locally producedpower is a commodity worth exploring."