Central Vermont Reports First Quarter Earnings; Connecticut Valley Sale Results in a Gain.

Business Editors

RUTLAND, Vt.--(BUSINESS WIRE)--April 26, 2004

Central Vermont Public Service (NYSE: CV) reported consolidated first quarter earnings of $10.4 million today, or 84 cents per basic and 82 cents per diluted share of common stock. This compares to first quarter 2003 earnings of $5 million, or 40 cents per basic and 39 cents per diluted share of common stock.

When the sale of substantially all the plant assets and franchise of subsidiary Connecticut Valley Electric Company ("CVEC") became probable in the second quarter of 2003, results of its operations were required to be presented in the financial statements as discontinued operations. The sale was completed on Jan. 1, 2004. As a result, first quarter 2004 discontinued operations reflect a gain, net of tax, of $12.3 million, or $1.02 per basic and $1.00 per diluted share of common stock. In the first quarter of 2003, discontinued operations contributed 4 cents to consolidated earnings.

For accounting purposes, components of the CVEC transaction are recorded in both continuing and discontinued operations in the consolidated income statement. The gain on the asset sale, net of tax, totaled $12.3 million, but CV recorded a loss on power costs, net of tax, of $8.4 million relating to termination of the power contract between CV and CVEC. When the two accounting transactions are combined to assess the total impact of the transaction, the result is a gain of $3.8 million, or 32 cents per basic and 31 cents per diluted share of common stock.

When the power contract loss accrual, discussed above, is removed from results of continuing operations, the increase in earnings from continuing operations for 2004 versus 2003 is 16 cents per diluted share of common stock.

"The sale was completed in a very timely and efficient manner, President Bob Young said. This closure allows us to focus solely on our Vermont utility business, rather than dealing with two regulatory jurisdictions. In addition to our core utility, we will continue to invest in wind opportunities at Catamount and transmission projects planned by Vermont Electric Power Company."

Quarterly Performance Summary

Utility Business - Continuing Operations

Operating Revenue increased $4.7 million, pre-tax, in the first quarter of 2004 compared to the same period in 2003 due to the following factors:

-- Retail sales increased $2.3 million due to a 3 percent

increase in volume mostly related to colder weather.

-- The Jan. 1, 2004, termination of the power contract with CVEC

decreased revenue by $2.9 million.

-- Resale sales increased $4.7 million due to higher committed

forward sales in 2004 (volume and price), partially offset by

lower short-term sales through ISO-New England. The volume

increase resulted from wholesale requirements power released

due to the termination of the power contract between CV and

CVEC, which made an additional 32,500 mWh available for

resale, and mWh available from CV's long-term purchase power

contracts due to higher output in 2004.

-- Other operating revenue increased $0.6 million due to higher

transmission and pole attachment revenue.

Purchased Power costs increased $18.4 million, pre-tax, in the first quarter of 2004 compared to the same period in 2003 as a result of the following factors:

-- In the first quarter of 2004, in accordance with Statement of

Financial Accounting Standards No. 5, Accounting for

Contingencies ("SFAS No. 5"), CV recorded a $14.4 million loss

accrual related to the termination of the power contract

between CV and CVEC. The loss accrual represents management's

best estimate of the difference between expected sales

revenue, in the wholesale market, for the power that was

formerly sold to CVEC and the cost of power associated with

that contract. The estimated life of the power contracts that

were in place to source the CVEC power contract extends

through 2015. In accordance with SFAS No. 5, the loss accrual

will be reversed and amortized on a straight-line basis

through 2015. In the first quarter of 2004, this amortization

resulted in a $0.3 million decrease in purchased power costs.

-- Purchases under long-term power contracts with Vermont Yankee,

Hydro-Quebec and Independent Power Producers resulted in a

$2.3 million increase, mostly due to higher output from each

source.

-- Short-term purchases through ISO-New England resulted in a

$2.5 million increase, primarily due to higher market prices

at the time of the purchases and volume relative to the same

period in 2003.

-- Other purchased power costs resulted in a $0.5 million

decrease primarily related to a 2003 payment for an

outstanding dispute related to Merrimack that was reimbursed

in April 2003 with no comparable item in 2004.

Other factors affecting 2004 first quarter results compared to the same period in 2003 included:

-- Lower other operating costs including transmission costs,

employee-related costs, conservation and load management

amortizations in 2003 versus no amortizations in 2004, and

lower interest expense due to lower long-term debt.

Non-utility Business

Catamount recorded first quarter 2004 earnings of $0.6 million compared to a loss of $0.1 million in the first quarter of 2003, primarily due to fees associated with Catamount's United Kingdom development efforts and lower operating costs, offset by lower equity in earnings.

Discontinued Operations

In accordance with Statement of Financial Accounting Standards No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, CVEC is presented as discontinued operations. First quarter 2003 results have also been restated, for presentation purposes, to reflect CVEC as discontinued operations.

Cash proceeds from the Jan. 1, 2004 sale amounted to about $30 million, of which $9 million represented the net book value of CVEC's plant assets. On Jan. 1, 2004, as a condition of the sale, CVEC paid CV $21 million to terminate its long-term wholesale power contract. The sale and contract termination resolved all CVEC restructuring litigation in New Hampshire and CV's stranded cost litigation at the Federal Energy Regulatory Commission.

As stated above, on a consolidated basis, the CVEC sale resulted in a gain, net of tax, of $3.8 million, or 32 cents per basic and 31 cents per diluted share of common stock.

2004 Financial Guidance

As we indicated in our Feb. 11, 2004 earnings release, we are now providing financial guidance for 2004. We expect 2004 consolidated earnings to be in the range of $1.62 to $1.67 per share. Our projection is based, in part, on the fact that the Vermont utility does not have an imposed earnings cap in 2004.

On April 7, 2004, the Vermont Public Service Board issued an order opening an investigation into whether CV's rates are just and reasonable. The Company cannot predict the outcome of that process at this time.

About CV

CV is Vermont's largest electric utility, serving over 148,000 customers statewide. The Company's two non-regulated subsidiaries include Catamount Energy Corporation and Eversant Corporation. Catamount invests in non-regulated energy generation projects in the United States and United Kingdom with a current focus on developing, owning and operating wind energy projects. Eversant sells and rents electric water heaters through a subsidiary, SmartEnergy Water Heating Services.

Forward Looking Statements

Statements contained in this report that are not historical fact are forward-looking statements intended to qualify for the safe-harbors from the liability established by the Private Securities Litigation Reform Act of 1995. Statements made that are not historical facts are forward-looking and, accordingly, involve estimates, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Actual results will depend, among other things, upon the actions of regulators, performance of the Vermont Yankee nuclear power plant, effects of and changes in weather and economic conditions, volatility in wholesale electric markets, our ability to maintain our current credit ratings and performance of Catamount. These and other risk factors are detailed in the Company's Securities and Exchange Commission filings. The Company cannot predict the outcome of any of these matters; accordingly, there can be no assurance that such indicated results will be realized. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this press release. CV does not undertake any obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of this press release.

              Central Vermont Public Service Corporation
               Earnings per Diluted Share Reconciliation
              First quarter 2004 vs. First quarter 2003:


2003 Earnings per diluted share                                  $.39

Year over Year Effects on Earnings:

 --  Higher resale sales - mostly higher volume        .22

 --  Higher retail sales - mostly higher
     volume due to weather                             .11

 --  Lower other costs                                 .07

 --  Catamount earnings in 2004 versus loss in 2003    .06

 --  Higher other operating revenue                    .03

 --  Discontinued operations - 2003                   (.04)

 --  RS-2 power contract termination -
     no sales in 2004                                 (.14)

 --  Higher purchase power costs -
     excluding SFAS No. 5 loss accrual                (.19)
                                                      -----

 --        Subtotal                                               .12

 --  Net impact of CVEC sale:

 --    Gain on discontinued operations               $1.00

 --    SFAS No. 5 loss accrual - termination of
       power contract                                 (.69)
                                                      -----

 --        Subtotal                                               .31

2004 Earnings per diluted share                                  $.82
                                                                 =====


      Central Vermont Public Service Corporation - Consolidated
                     Earnings Release (unaudited)
                Quarters Ended March 31, 2004 and 2003
           (dollars in thousands, except per share amounts)

                                                     2004        2003
                                               ----------- -----------
UTILITY OPERATING DATA
   Retail and firm sales (mWh)                    612,133     591,591

   Operating revenues:
      Retail and firm sales                       $71,785     $69,504
      Resale sales                                 10,186       5,528
      RS-2 power contract                               -       2,862
      Other operating revenue                       2,143       1,582
                                               ----------- -----------
   Total operating revenues                       $84,114     $79,476
                                               ----------- -----------

   Operating expenses:
      Purchased power                             $57,922     $39,538
      Other operating expense                      26,812      33,097
                                               ----------- -----------
   Total operating expenses                       $84,734     $72,635
                                               ----------- -----------

NET INCOME AND COMMON STOCK
   (Loss) Income from Continuing Operations       $(1,906)     $4,601
   Gain from Discontinued Operations, net of
    taxes                                          12,256         359
                                               ----------- -----------
Net Income                                         10,350       4,960
   Preferred Stock Dividend Requirements              258         299
                                               ----------- -----------
Earnings available for Common Stock               $10,092      $4,661
                                               ----------- -----------

   Average shares of common stock outstanding:
      Basic                                    12,063,879  11,776,658
      Diluted                                  12,286,867  11,979,743

   Earnings per share of common stock - basic:
        Continuing Operations                       $(.18)       $.36
        Discontinued Operations                     $1.02        $.04
        Earnings per share                           $.84        $.40
   Earnings per share of common stock -
    diluted:
        Continuing Operations                       $(.18)       $.35
        Discontinued Operations                     $1.00        $.04
        Earnings per share                           $.82        $.39

   Dividends per share of common stock               $.23        $.22

NON-REGULATED BUSINESSES:
Catamount Energy Corporation:
   Earnings (losses) per share of common stock       $.05       $(.01)

Eversant Corporation:
   Earnings (losses) per share of common stock       $.01        $.01