January 23, 2020

Green Mountain Power to buy 14 more hydroelectric dams

By Mike Polhamus

For Vermont Digger

Vermont’s largest electric utility has committed to purchase 14 hydroelectric dams in New England and to get power from two others — a buy that will net Green Mountain Power an added 17 megawatts of energy production for just over $20 million.

The dams will help the company, a subsidiary of Canadian-owned Gaz Metro, meet statutory requirements on the percentage of its power supplied from sources deemed renewable.

The arrangement includes a power purchase agreement between GMP and Enel, the Rome-based Italian state utility from which it’s buying the 14 dams. That agreement will secure further energy from two additional dams in Sheldon and in Ticonderoga, New York.

Four of the dams to be purchased sit in Vermont rivers, said GMP spokeswoman Kristin Carlson. They’re in North Hartland, Newbury, Hartford and Barnet. The remaining 10 are in Maine, New Hampshire and Massachusetts.

The 14 dams range in size from 0.4 megawatts to 2.78 megawatts and will add to 32 dams GMP already owns, Carlson said.

Green Mountain Power revenue is based on capital assets it owns — and comes at a rate of return approved by state regulators — and not on power it purchases, company representatives have said. Opponents of GMP-owned projects have in the past argued this encourages the company to buy or build generators in order to profit off them, instead of buying power more cheaply on the market.

Carlson said that’s not why the company is buying the dams and she added that dams GMP owns supply some of the lowest-cost power in the utility’s portfolio.

“The purchase of the Enel plants lower costs for customers and at the same time, they’re increasing local generation and helping the state meet its renewable energy goals,” Carlson said. “They’re incredibly cost-effective for customers.”

Hydroelectric generators GMP already owns produce electricity at a cost of around 3 cents per kilowatt-hour, Carlson said. The dams to be purchased will supply power for about 8.5 cents per kilowatt-hour, she said, comparing that with solar panel generation at about 11 to 13 cents per kilowatt-hour.

“It’s really important for Vermont customers that we were able to come to this agreement,” Carlson said. “That’s basically the value of owning some generating facilities — because once they’re paid off, they generate power in a way that’s very cost-effective for Vermonters.”

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