MONTPELIER – With the relicensing of Vermont Yankee still in peril, attention in the capital has turned to a possible new contract with the state's other major energy provider: Hydro-Quebec in Canada.

State and utility officials are in Canada this week for trade talks, including discussions about the future of renewable energy development, sparking rumors that a long-awaited contract extension with the company is in the works.

Green Mountain Power and Central Vermont Public Service, Vermont's two largest electrical utilities, both said Wednesday that negotiations to buy more hydro-electric power from the state's northern neighbor are ongoing.

Robert Dostis, director of customer service and external affairs for GMP, said there will be a lot of talking between Vermont and Canadian officials this week about boosting economic ties, but he was unsure if a new Hydro-Quebec contract would emerge.

"At this point, we just don't know," Dostis said. "We've been negotiating heavily for the last year, year and a half. We're hopeful that we'll soon come to an agreement."

CVPS and GMP had also been negotiating with Entergy Nuclear Vermont, the owner of the Vermont Yankee nuclear power plant, for a post-2012 power agreement. Those talks seemed to have ceased in recent months.

But as the plant's fortunes have dimmed – the Vernon facility is leaking tritium and its executives are under investigation for allegedly lying to state officials – it seems less likely the plant will be approved for operation after 2012, when its license expires.

Legislation being worked on at the Vermont Statehouse could make a new power deal with the state more attractive to Hydro-Quebec. Rep. Tony Klein, D-East Montpelier, chairman of the House Natural Resources and Energy Committee, is working on a new green energy bill that would crown Hydro-Quebec's power as "renewable" energy.

Having that designation under Vermont law would allow the state's utilities to get a better power deal from Hydro-Quebec. Although not all of the company's energy is green – it does have some nuclear power in the mix, for example – the proposed Vermont law would consider energy from the company's water dams to be renewable.

It's a designation that Jean Charest, the Quebec premier, called for when he visited Washington, D.C., for a major energy conference earlier this month. Also at the meeting was Gov. James Douglas, who supports the renewable designation.

"There should be a recognition that large-scale hydro is renewable energy," Charest said, according to an article in the Montreal Gazette newspaper.

Owned by the Canadian government, Hydro-Quebec began selling energy to Vermont in the early 1980s under a deal brokered by then-Gov. Richard Snelling. That 10-year agreement saw the Canadian company sell about 150 megawatts of energy to the state.

Vermont's utilities negotiated a series of new contracts in the late 1980s – these for up to 310 megawatts of power for upward of 25 years – at about 6.5 cents per kilowatt hour. Those contracts expire over the next several years with the last ending in 2015.

Hydro-Quebec, like Vermont Yankee, supplies about one-third of the state's energy right now. It was not clear if the new contract under negotiation would be for more or less energy, or what the price would be.

daniel.barlow@rutlandherald.com.