CVPS: Finances, energy planning, reliability are top priorities

May 6, 2008
CVPS: Finances, energy planning, reliability are top priorities
RUTLAND, VT. - Securing new energy sources, returning to investment grade and ensuring continued service quality and reliability will be the top priorities for Central Vermont Public Service (NYSE-CV) in 2008 and beyond, President Bob Young told shareholders at the company's annual meeting May 6, 2008.
"We're at a crossroads in planning Vermont's energy future," Young said. "That is the single greatest issue facing the company in the next five to six years."
Energy planning
Speaking from notes, Young said CVPS, state regulators and other utilities were working hard to obtain and weigh public input and examine potential energy sources in anticipation of the end of existing contracts that supply two-thirds of Vermont's electricity. Contracts with Hydro-Quebec and Vermont Yankee end between 2012 and 2016.
The contracts provide Vermont with low-priced energy with a small carbon footprint, providing CVPS customers with the lowest electric rates of any major utility in New England. CVPS is negotiating with Vermont Yankee and Hydro-Quebec on new potential contracts, but is also examining several other new energy sources, Young said.
The company plans to expand renewable energy development through CVPS Cow Power(tm), with two new farms due on-line this year, including one later this month. The company is also planning two significant solar projects, seeking out new renewable energy projects in southern Vermont, and offering to purchase the electricity produced by any renewable project built within the CVPS service territory. CVPS is also working with other utilities on a study, expected to be completed this month, on the possibility of building baseload generation in Vermont.
"Our goal is to replace our current supply with stable, price-competitive, green energy," Young said.
2007 Achievements
Young ticked off a list of significant accomplishments in 2007, including:
· Maintaining competitive rates, which have risen just 5.9 percent since 1999, compared to 85 percent for the Consumer Price Index for energy;
· Surpassing all 17 service quality measures monitored by the state;
· Placing first in the East in the 2007 J.D. Power electric utilities survey for price and value, company image and billing and payment;
· Successfully managing the biggest storm in CVPS history, without a single injury.
Young lauded CVPS's 550 employees for their dedication to customers, particularly following three major storms in 2007, including an April storm, dubbed a nor'icane, that knocked out service to 68,000 customers and cost $4.5 million. The clean-up involved employees across the company and hundreds of workers from as far away as Ontario, and earned CVPS the Edison Electric Institute's 2007 Emergency Recovery Award.
"We are believed to be the smallest company in history to win the award," Young said, "which is testament to your employees' commitment to our customers."
Young said CVPS was making significant investments in infrastructure to improve service quality and reliability, as well as strengthen the company's financial position. CVPS invested $26 million in capital projects in 2007, plus $53 million in VELCO. CVPS plans to invest an additional $41 million in capital projects this year, including $11 million to improve voltage support in southern Vermont.
"These investments not only improve service, they add to our rate base and improve the bottom line," Young said. An alternative regulation proposal now before the Public Service Board could also improve the company's finances and help return the company to investment grade, Young said, while focusing the company on customer service and reliability. Toward that end, CVPS and the Department of Public Service are working together with an outside consultant on a business process review to ensure operational effectiveness.
In summation, Young said there would always be challenges, but he voiced optimism about CVPS's future.
"We've proved our mettle in the past, and we continue to prepare for a constructive, productive future," Young said. "In doing so, we will continue to provide growth and value for shareholders, quality service for our customers, and rewarding jobs for our employees."