Vermont’s power future can be summed up in two words: “O Canada!”

On Monday, Fortis, a Newfoundland-based power company, announced a $700 million deal to buy Central Vermont Public Service, Vermont’s largest utility. The deal includes Fortis buying up about $230 million in CVPS debt. Fortis owns several utilities across Canada, as well as the Caribbean and Belize.

If approved by Vermont regulators, CVPS would become the third major state utility owned by a Canadian firm. Quebec-based Gaz Métro owns Northern New England Energy Corporation, which, in turn, owns Green Mountain Power and Vermont Gas.

GMP’s sale to Gaz Métro was approved in 2007, while Vermont Gas was taken over back in 1986.

In addition, all of the dams along the Connecticut River are owned by TransCanada, which is based in Alberta. They purchased the dams in 2005 from USGen New England.

Who’s got the power now, eh?

Maybe this is Gov. Peter Shumlin’s way of bringing single-payer health care to Vermont? One utility at a time. Canada gets Cow Power and we get cradle-to-grave, universal health care. Sweet.

I guess it’s good to have a back-up plan if Vermont can’t get the waivers it needs to move ahead with a first-in-the-nation single-payer health care system. Vermont can become a wholly-owned subsidiary of Canada. I doubt the other 49 states would notice, or care.

“In the coming days, my administration will carefully examine the terms of the proposed acquisition,” Shumlin said in a statement. “In a utility acquisition such as this, it is critical that the transaction serve the best interests of Vermont’s ratepayers and job creators. While CVPS’s Board has cited benefits of retained management and control, I will examine this transaction for strong value to the customers in furtherance of our state’s priorities. I will also insist on a continuation of the extraordinary corporate ethic we expect here in Vermont.”

In addition to the $700 million in cash, Fortis is also proposing to pump $21 million directly back to Vermont consumers — as regulators see fit. It will also allow CVPS to maintain its current workforce of about 520 employees and its headquarters in the greater metropolitan area of Rutland.

The all-cash transaction will provide CVPS shareholders $35.10 per share, a 44 percent premium over the CVPS common share closing price of $24.32 on Friday, May 27. Cha-ching!

And, yes, that’s in U.S. dollars, not Loonies. Though lately the Canadian dollar is trading just about par with its U.S. counterpart ($1 U.S. was worth 97 cents Canadian when I checked last night).

CVPS’ new president Larry Reilly said Fortis was chosen out of several suitors. Fortis is the largest investor-owned distribution utility in Canada, with total assets of approximately $13 billion and fiscal 2010 revenue totalling approximately $3.7 billion. Fortis serves approximately 2.1 million gas and electricity customers.

“Fortis brings financial strength to CVPS, giving us strong access to capital markets not available to smaller utilities,” Reilly said. “And we look forward to sharing best practices with the other operating companies of Fortis, with the goal of finding new ways to reduce costs and improve service to our customers.”

Fortis execs praised CVPS for being a top-notch utility that fits well with the Fortis model, which is allowing its subsidiaries to operate as autonomously as possible.

“CVPS is a well-run utility whose operations and operating philosophy are very similar to those of our Canadian regulated utilities,” said Stan Marshall, Fortis’ president and CEO.

CVPS, the largest electric utility in Vermont, serves nearly 160,000 customers in 163 cities and towns across Vermont. CVPS Cow Power™ won the 2009 U.S. Department of Energy Utility Green Program of the Year Award and the company has been listed by Forbes Magazine as one of the most trusted companies in America for 60 straight months.

“This is a great opportunity for CVPS, our customers, employees, the Rutland region and the state as a whole,” commented CVPS Chairman Bill Sayre. “A partnership with Fortis brings additional strengths to help us achieve our vision of becoming the best small utility in America.”

Yeah, that’s code for get ready to learn the Canadian national anthem. China’s got nothing on Canada when it comes to buying up the U.S. on the cheap.

So, Vermont power consumers, I suggest you start to learn the following lyrics to the English version of “O Canada,” the national anthem of our neighbors to the north.

O Canada!
Our home and native land!
True patriot love in all thy sons command.
With glowing hearts we see thee rise,
The True North strong and free!
From far and wide,
O Canada, we stand on guard for thee.
God keep our land glorious and free!
O Canada, we stand on guard for thee.
O Canada, we stand on guard for thee.

This article appears in Jun 1-7, 2011.

Shay Totten wrote "Fair Game," a weekly political column, from April 2008-December 2011.

28 replies on “Vermont: A Wholly-Owned Subsidiary of Canada?”

  1. That’s not a valid analogy. I assume you are talking about the age of Vermont Yankee?

  5. Only of Entergy Louisiana is a qualified bidder. That’ll be ironed out by the courts. Until it is, it isn’t prudent to make long term business plans with them. If it becomes clear that the Entergy Louisiana plant will continue running for 20 years … and if they still have a better price … sure, ink a deal with them.

  6. So what you are saying is if Entergy offers the same or lower price to say CVPS, then you support CVPS accepting said offer?And I remind you that Seabrook will not be contributing to the CEDF, so it isn’t in total a better deal. Also, even at GMP’s touted cost of 8 cents the lowell wind will cost, Entergy is far cheaper. Since you “…support government (and public service provders) awarding contracts to the lowest qualified bidder.”Then obviously GMP should squash the Lowell wind project and instead buy that power from Entergy Louisiana…

  7. You said it, “they put forth the cheapest price … PRIOR to the Seabrook deal.” Shop around a little bit, get a better deal. That’s life. Entergy Louisiana got couldn’t compete.

  8. “I support government (and public service provders) awarding contracts to the lowest qualified bidder.”Then clearly you must oppose wind, solar, biomass and the contracts with Hydro Quebec….”they were in a very competitive situation. They knew full well that GMP was in negoitations with other power suppliers.”And they put forth the cheapest price, and were denied prior to the Seabrook deal. Moreover, considering their hefty contribution to the CEDF, it is in fact a better deal then Seabrook, which will not be putting 10 Million + into the CEDF.

  9. “Do you support buying from local farmers … ?” I support government (and public service provders) awarding contracts to the lowest qualified bidder. For months, VY has run ads of ‘local farmers’ saying that they need the cheapest availalbe supply of power. Seabrook Nuclear is it. My personal shopping habits effect only myself. Not hundreds of thousands of other people. “Do you think Entergy might have matched it?” Entergy Louisiana knew that they were in a very competitive situation. They knew full well that GMP was in negoitations with other power suppliers. Entergy Louisiana had EVERY chance to put forward their best price. They couldn’t compete on price. They failed and the ratepayers won.

  10. Do you support buying from local farmers even though it’s more expensive? Same food higher prices, keeps people off the gov’t dole though and when factored in results in lower costs overall. Moreover, I’m just guessing here, but do you wonder if GMP said, we have a price of X can you match it? Do you think Entergy might have matched it? And lets not forget,both Entergy and Seabrook are cheaper then HydroQuebec AND are just about free compared to wind/solar/and biomass.

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