A key state agency has signed off on the sale of 13 hydroelectric stations to a Boston company.
The Vermont Department of Public Service - which represents the public interest in energy matters - has approved a deal pledging to support Great River Hydro's proposed purchase of TransCanada's dams on the Connecticut and Deerfield rivers.
Jim Porter, director of the department's Public Advocacy Division, said the agreement came after a thorough review of the sale and after negotiation with Great River.
“We did conclude the sale facilitated the general good of the state,” Porter said. “The sale will not affect Vermont jobs, and Great River Hydro demonstrated it is capable of managing these assets.”
TransCanada decided last year to unload the hydro stations in order to finance its acquisition of a Texas pipeline company.
The sale played out relatively quickly. TransCanada's intentions became public in March 2016 and, on Nov. 1, the company announced an agreement with Boston-based ArcLight Capital Partners - the parent company of Great River Hydro.
Included in the deal are six Connecticut River stations - Moore, Comerford, McIndoe, Wilder, Bellows Falls, and Vernon. There are seven facilities on the Deerfield, including the Sherman, Harriman, and Searsburg stations in Vermont.
The speed of TransCanada's sale process hindered Vermont officials' efforts to determine whether the state could acquire an ownership interest in the dams. Shortly before the ArcLight deal was disclosed, a state working group concluded that Vermont shouldn't get involved.
The Federal Energy Regulatory Commission signed off on Great River Hydro's purchase in January. But the deal hasn't yet been finalized because it requires approval by the state Public Service Board.
The board's review appears to be wrapping up, and the new seal of approval from the Public Service Department - which is a separate entity from the board - should push that along. The agreement, dated March 10, is signed by the department, TransCanada, and Great River Hydro.
The terms of the deal include:
• Great River Hydro's purchase “will promote the general good of the state of Vermont.”
• The Public Service Board should allow TransCanada Hydro Northeast's transition to a limited liability company prior to the sale closing. That company's assets will then be acquired by Great River, which wants a state certificate of public good to own and operate the dams as an LLC.
• Great River will continue to operate under “de minimis” financial regulation, as TransCanada has been.
The term refers to TransCanada's 2005 state certificate of public good to buy the hydro dams from USGen New England. In that case, the Public Service Board ruled that TransCanada would be excused from making certain financial filings with the state.
Part of the board's rationale was that the company required less financial oversight because it would be operating as a wholesale energy supplier, not as a public utility.
• ArcLight is signaling the possibility that other, unnamed entities might acquire interests in Great River Hydro. But the new agreement says the company wouldn't have to seek state approval for those transactions because ArcLight is pledging to remain fully in control of the hydro company.
• Any amendments of Great River Hydro's federal licenses, and any federal filings related to its power rates, must also be filed with the state.
• Great River must comply with the Vermont Dam Safety Act as long as those requirements don't conflict with federal regulations.
The Public Service Board doesn't have to accept the agreement or the Public Service Department's conclusions about the sale.
But Porter noted that the deal came about after “this transaction was carefully reviewed by our legal, finance, and planning divisions.” And he sounded confident in Great River Hydro's ability to deliver on its commitments, which include continued employment for existing staffers and continued tax payments to host towns.
“Great River Hydro has presented itself as a willing buyer, eager to serve as a responsible steward for the facilities,” Porter said. “It has demonstrated sound financial footing and has pledged to preserve Vermont jobs.”