MONTPELIER – Vermont is the first state in the country to declare large-scale hydroelectric power as a renewable energy resource, a move that clears the way for a new power contract with the province of Quebec.

Gov. James Douglas signed a renewable energy bill into law shortly after noon Friday. It is expected to be the final bill the Republican leader will put his signature on during his eight years in office.

"Today, we are proud of our legacy in energy policy," Douglas said in his ceremonial office at the Statehouse, surrounded by dozens of members of his staff, business leaders, lawmakers and lobbyists and Canadian officials. "We continue to have one of the cleanest electric portfolios in the world. Vermont is truly the Green Mountain State."

Some were drawn to the occasion because of the bill being signed; others were on hand to see the retiring governor pen his name on what is expected to be his final piece of legislation.

"H.781 is the last bill I will sign, unless of course we have an unexpected special session," Douglas joked.

The renewable energy bill creates tax credits to spur development of small-scale projects across Vermont, expands the state's "cow power" projects that use methane to produce energy, allows the state's National Guard to build solar panels on its buildings and greatly streamlines the process of approving renewable energy projects.

But perhaps the most important part of the bill – and the most controversial – is the provision that deems energy from Hydro-Quebec, a provincially owned utility, as renewable energy under Vermont law.

That designation ensures Vermont will receive a better price for power (the state's two largest utilities are in negotiations on a new contract) and it also makes Hydro-Quebec's energy more marketable in other states where Hydro-Quebec will seek to market power.

Hydro-Québec CEO Thierry Vandal stressed that cooperation between Quebec and Vermont is essential to combating global warming and moving toward renewable and clean ways of generating power.

He said the company wants to "support the people of Vermont with clean, renewable and affordable power for decades to come."

"You can count on us," Vandal said.

But some environmental groups would rather that Vermont didn't count on Hydro-Quebec.

Jake Brown, communications director for the Vermont Natural Resources Council, said it was disappointing that the state endorses what he calls "mega-hydro." He said this technology has had detrimental environmental consequences for people in Canada.

He also worried that the importation of power from Canada would crowd out efforts to generate small-scale hydro projects in Vermont, which would create jobs and taxes here in the state.

"It will be bad for Vermont's reputation that we are the first state in the country to make this move," Brown said. "It's disappointing that lawmakers made the decision to give Hydro-Quebec this gold star."

In all, Gov. Douglas has signed about 750 laws, acts and charter changes during his eight years as governor. Several other bills became law without his signature and he vetoed more than a dozen others over the years (lawmakers overrode his veto on two of those bills last year).

The first bill Douglas signed into law in 2003, just months after he was elected, was a change allowing the small community of Buels Gore, an unincorporated territory atop Appalachian Gap that had a population of 12 during the 2000 Census, to change the date of its annual meeting.

The sponsor of that bill was former Rep. Robert Dostis – who now works for Green Mountain Power and lobbied in favor of the renewable energy bill, the last bill Douglas is expected to sign into law.

Even some political foes expressed gratitude for the governor. Rep. Tony Klein, D-East Montpelier, chairman of the House Natural Resources and Energy Committee, clashed with Douglas numerous times over the years on the contentious issue of Vermont Yankee nuclear power plant's continued operation.

Klein said he wished he and the governor could have worked more together over the years on energy issues, but stressed that both of them strongly supported the bill Douglas signed into law Friday.

"I appreciate and enjoyed the opportunity to work with the governor," Klein said.