SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): December 18, 1998
GREEN MOUNTAIN POWER CORPORATION
(Exact Name of Registrant as Specified in its Charter)
VERMONT 03-0127430
(State or Other Jurisdiction of (I.R.S. Employer Identification Number)
Incorporation)
1-8291
Commission File Number
25 Green Mountain Drive,
South Burlington, Vermont 05403
(Address of Principal Executive Offices) (Zip Code)
(802) 864-5731
(Registrant's telephone number,
including area code)
Item 5. Other events.
Vermont Electric Utility Restructuring Working Group Report
The Working Group on Vermont's Electricity Future (Working Group),
appointed by Governor Howard B. Dean to examine the structure of the
utility industry in Vermont, issued its report on December 18, 1998.
The fundamental conclusions of the report are:
1. Bankruptcy is not a solution to Vermont restructuring efforts
and is not an appropriate means to resolve the above-market
costs associated with Vermont's power supply portfolio.
2. Financing mechanisms, including asset securitization, that
have been implemented in other states that have restructured
their electric industries should be made available in Vermont.
Such mechanisms would provide an up-front lump-sum payment to
suppliers of power to Vermont utilities in exchange for
terminating or substantially reducing the pricing in their
contracts. Such financing mechanisms could be authorized by
the legislature or regulators.
3. The utilities in Vermont should exit the power generation and
supply business as part of the restructuring of the electric
industry in Vermont. The Working Group believes that Vermont
should move rapidly into a restructured competitive
environment.
4. As a component of a restructuring plan, serious consideration
should be given to consolidation of the 22 utilities in
Vermont, beginning with the amalgamation of Citizens
Utilities' Vermont operations with Green Mountain Power (GMP)
and Central Vermont Public Service Corporation.
There is substantial work ahead to develop a comprehensive plan
for restructuring that will be acceptable to the numerous parties who
have an interest in the final outcome. The idea of consolidation of
Vermont's utilities needs further exploration and GMP will participate
in the process. Consistent with GMP's charter , we will consider the
benefits of any merger or consolidation for our shareholders as well as
the social, legal and economic effects upon our employees, suppliers,
customers and others in similar relationships with GMP, and upon the
communities in which we do business.
Sale of GMP's Interest in Green Mountain Energy Resources L.L.C.
Through its subsidiary Green Mountain Resources, Inc. (GMRI), GMP
has agreed with Green Mountain Energy Resources L.L.C. (GMER) and Green
Funding I, L.L.C. (GFI) to terminate an agreement among the parties
dated as of August 6, 1997, and to replace it with a new agreement.
GMER is a company that has created retail brands of electricity that are
sold to consumers who care about the environment in competitive markets.
The new agreement, among other things, provides for the sale of GMRI's
interest in GMER in return for payment of $1 million in the first
quarter of 1999. The funds will be used for GMP's general operating
expenses.
Under the terms of the original agreement through which GMRI
acquired its interest in GMER, GMRI's ownership percentage of GMER would
be diluted if GFI and/or third parties proposed to contribute additional
capital to GMER, and GMRI did not make pro rata additional capital
contributions at such time. During the previous twelve months, GFI made
substantial investments in GMER and it is anticipated that GFI or other
parties will make additional, substantial investments in 1999. GMRI has
not provided additional capital contributions, which reduced its
ownership percentage in GMER. In view of the likely need for future
investment in GMER's business, GMP considered it to be in the best
interest of our shareholders to sell GMRI's interest in GMER in exchange
for the $1 million payment and other benefits described below.
The new agreement provides GMP substantial relief from a "non-
compete clause" in the August 6, 1997 agreement that would have
restricted GMP's activities in the retail energy business for seven
years. It also provides clarification regarding the use of "Green" and
"Mountain" in any name used in conjunction with business activities
carried on by GMP or its affiliates in the future.
Item 7. Financial Statements, ProForma Financial Information and
Exhibits
(a) and (b) --Not applicable
(c) Exhibits
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly cased this report to be signed on its
behalf by the undersigned thereunto duly authorized.
GREEN MOUNTAIN POWER CORPORATION
Registrant
By _/s/ Nancy R. Brock
Nancy R. Brock
VICE PRESIDENT, CHIEF FINANCIAL
OFFICER AND TREASURER
BY /s/ Robert J. Griffin
Robert J. Griffin
CONTROLLER
DATED: January 8, 1999
