(HOST) The small town of Rockingham has answered one of those Questions of the Ages. No, it’s not, What is the meaning of life? Commentator Timothy McQuiston says they’ve answered the one that goes: What is the price of power?
(MCQUISTON) OK, so it’s not political power we’re talking about, it’s electricity. And just before Thanksgiving, Rockingham voters decided that the price of power was 74 million dollars. What they decided to do is buy the hydroelectric plant in the village of Bellows Falls from the bankrupt USGen.
The cost of buying the plant is being underwritten by Brascan Power Corp. of Toronto, who will operate the plant and in turn have the rights to sell the electricity. Rockingham will get some of the electricity and a 3 million dollar property tax payment from Brascan every year for the next 10 years. After that, the town will get 24 percent of the plant’s revenues; and when the lease is up in 74 years, Rockingham will own the plant free and clear.
This is a big undertaking for the Connecticut River town of just 5,300. To a lot of Vermonters, the village of Bellows Falls is just an exit off I-91, sort of near Springfield.
But the voters there have taken a bold step toward securing their energy future. Proponents had to convince at least 60 percent of voters (by law) to buy the plant. And they got that and a tad more. That’s pretty good. Especially in light of the fact that there was another suitor: Transcanada. (Hmm, weren’t they part of that Champlain Pipeline thing in the late 80s? Yeah, they were, weren’t they.)
Transcanada wanted to buy the Bellows Falls plant as part of its purchase of 12 other similar plants USGen is trying to sell on the Connecticut and Deerfield rivers. The benefit to the town in the short term would have been similar in the Transcanada deal. But the whole thing was more sketchy. Rockingham voters had to act by December first to exercise their Purchase option, but the bankruptcy court wouldn’t have ruled on the Transcanada deal until after that. Nor would Rockingham have eventually owned the plant.
Goldmine or bust. You simply don’t know what you’re going to get.
Has Vermont Yankee been a good deal for Vermont, or not? Has Hydro-Quebec? Would the state have been better off building those gas-fired plants in Rutland County that Governor Dean supported? And how about that Champlain Pipeline?
My feeling is that it’s generally bad public policy for government to run a business. Admittedly, utilities are sort of a gray area in this regard. They’re not a ski resort, but they’re not the post office either. 74 million is a large asset for a small town, and they’ll also have to set up a municipal power company.
But maybe the good people of Rockingham know better than I do. And while they’re at it, maybe they can answer some of life’s other persistent questions.
This is Timothy McQuiston.
Timothy McQuiston is editor of Vermont Business Magazine.