A cold winter and a revenue-sharing agreement with the owners of the Vermont Yankee nuclear plant will mean a big windfall for many Vermont electric customers.
When the Entergy Corporation bought the plant in 2002 from Vermont utilities, the company agreed to share revenues from its sales above a certain wholesale electric price.
That price was exceeded this winter as wholesale power costs skyrocketed in New England. And that means Entergy will pay Green Mountain Power as much as $17.8 million.
GMP spokeswoman Kristin Carlson says the money will be used to lower rates or stabilize them into the future.
“This is not something we were expecting, and as soon as we heard about it, we started working with state regulators about the best way to return this money to customers, and make sure customers receive the full value of that money,” she said.
Chris Recchia is commissioner of the Department of Public Service, the state agency that represents ratepayers.
He says the windfall happened because Entergy plans to close Yankee at the end of this year and was selling into wholesale power markets as high natural gas prices caused electricity prices to spike.
“The fact that they were planning on closing meant they couldn’t do longer term contracts,” he said. “And they felt just selling it into the market made the most sense. And in this case, prices were up, and they reaped the benefits of that. And then in fact, with the cost-sharing agreement, so did Vermont ratepayers”.
Recchia’s department negotiated the revenue sharing agreement in 2002. The state and GMP are now working on precisely how the windfall will be used.