CVPS Agrees to Purchase Wind Project Output.

RUTLAND, Vt. -- Central Vermont Public Service (NYSE: CV) today notified state regulators of its intent to purchase the output of the proposed Glebe Mountain wind project in Londonderry, an agreement expected to save CVPS's customers up to $700,000 per year.

Under state regulatory rules, CVPS must give the Vermont Public Service Board 90 days' notice of it intent to sign such a power purchase agreement. Glebe Mountain Wind Energy LLC, the project's developer, is expected to file for a state permit this spring.

Under the finalized terms of an expected 20-year agreement with Glebe Mountain Wind Energy LLC, which is a partnership of Catamount Energy and Marubeni, CVPS would purchase the 19-turbine, 47.5-megawatt project's entire electrical output, enough to serve approximately 21,000 Vermont homes annually.

Assuming the Glebe Mountain project receives state approval, CVPS will pay 95 percent of the market price for the electricity, which will serve local loads in Londonderry, Windham and surrounding towns. Since CVPS has a power surplus, it will sell other energy sources into the market at the market price, reducing overall customer power costs.

"We have no financial risk under this deal," said CVPS Vice President Bill Deehan, who oversees power supply for the state's largest utility. "We don't actually need energy right now, but since we're buying this at less than the market price, we can collect the difference as a benefit to our customers. Down the road, if we need more energy, we can reduce sales into the market."

The Glebe Mountain energy will also count toward new state renewable energy requirements, approved by the state legislature in 2005. The energy is expected to displace nearly 16,000 metric tons of carbon dioxide from fossil fuel generation in New England annually, the equivalent of burning 323 railcars of coal or 147,681 barrels of oil, or removing 13,745 passenger cars from the road.

"There are tremendous environmental benefits to the project," Deehan said. "It's in keeping with CVPS's historic record of limiting our environmental impact through generation choices, and the project would demonstrate that Vermont can continue to develop significant renewable resources to meet future energy needs."

If approved by the Vermont Public Service Board, construction of the project would begin in 2007. The power purchase contract would begin with the project's completion, targeted for 2008.

Deehan said the agreement was also favorable to CVPS and its customers because it did not require the company to post any collateral. Since last summer, CVPS power transactions have required millions of dollars in collateral following a downgrade of the company's debt ratings.

Catamount Chief Executive Officer James Moore said he was pleased to find an in-state purchaser for the Glebe Mountain project. "We think it's critical that the power be used to meet local energy needs," he said.

Catamount Energy, formerly a subsidiary of CVPS, was sold to Diamond Castle, a New York investment firm, late last year. CVPS is Vermont's largest electric utility, serving more than 150,000 customers across the state.

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