Form 8-K Reg FD EEI conference Nov
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of The Securities Exchange Act Of
1934
November
7, 2005
Date
of
Report (Date of earliest event reported)
GREEN
MOUNTAIN POWER CORPORATION
(Exact
name of registrant as specified in its charter)
VERMONT
(State
of
other jurisdiction of incorporation)
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1-8291
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03-0127430
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(Commission
File Number)
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(IRS
Employer Identification Number)
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163
ACORN LANE
COLCHESTER,
VT 05446
(Address
and zip code of principal executive offices)
(802)
864-5731
(Registrant’s
telephone number, including area code)
N/A
(Former
name of former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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Item
8.01 Other
Events.
On
November 8, 2005, Christopher L. Dutton, President and Chief Executive Officer
of the Company, and Robert J. Griffin, Vice President, Chief Financial Officer
and Treasurer of the Company, will make a presentation at the “40th
EEI
Financial Conference” held in Hollywood, Florida. This presentation is attached
hereto as Exhibit 99.1 and incorporated herein by reference.
1.
The
Company's principal financial and growth objectives include prospects for
dividend growth, the Company’s plan to invest up to $32 million in the Vermont
Electric Power Company ("VELCO") through 2008, and continued growth in business
services.
2.
The
Company’s dividend payout ratio remains comparatively low, at approximately 48
percent of 2004 earnings from continuing operations. The current payout ratio,
if continued at its low level, would result in significant growth in the
proportionate share of equity in the Company's capital structure, which would
be
costly for the Company's customers to support. The Company expects to grow
its
dividend payout ratio to the middle of a payout range of between 50 and 70
percent of earnings over the next five years, in line with other electric
utilities having similar risk profiles, so long as financial and operating
results permit. The Company expects to increase its annual dividend by 12 cents
per share in the first quarter of 2006.
3.
The
Company owns approximately 30 percent of VELCO which owns and operates most
of
the transmission assets in Vermont. VELCO and has received approval from the
Vermont Public Service Board to substantially upgrade Vermont’s transmission
system principally to support reliability in northwestern Vermont (the
"Northwest Reliability Project"). VELCO's Northwest Reliability Project costs
are estimated to be substantial and the Company could invest up to $32 million
in VELCO through 2008, primarily for its proportionate share of the Northwest
Reliability Project. The Company considers the Northwest Reliability Project
to
be vital to maintaining a reliable electric system for its customers and to
sustaining the economic health of the region. The Company expects to maintain
equity at between 50 and 55 percent of its capital structure.
4.
Company forecasts presently indicate the need for a rate increase of
approximately 13 percent in 2007 to achieve its allowed rate of return, caused
principally by forecasted higher replacement energy costs upon expiration of
the
Company’s power supply contract with Morgan Stanley Capital Group, Inc. on
December 31, 2006, increased energy costs for uncovered load obligations and
a
forecasted increase in transmission expense. Forecasted amounts could change
materially based on energy prices, the timing of transmission investments and
other factors. The Company is exploring alternatives designed to mitigate the
magnitude of this potential rate increase, including alternative regulation
and
power supply contract options. The Company expects the customers of many other
New England utilities to experience similar cost pressures in light of current
wholesale energy prices. The Company expects to request an accounting order
from
the Vermont Public Service Board to defer incremental power supply and
transmission costs caused by an extraordinary and rapid increase in energy
prices that is forecasted to adversely affect costs in 2006 by a material
amount, absent deferral. Much of the recent increase in energy prices was caused
by hurricanes Katrina and Rita that interrupted natural gas and oil supplies.
Vermont Public Service Board approval is required to permit the Company to
defer
these costs. The estimated deferral amount is expected to range between $4
and
$8 million and could change by a material amount based on energy prices and
other factors.
5.
The
Company will reiterate that it does not expect to make material investments
in
new unregulated operations through 2008.
Item
9.01 Financial
Statements and Exhibits.
(c) Exhibits.
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Exhibit
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Description
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99.1
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Presentation
made on November 8, 2005 at the 40th
EEI Financial Conference.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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GREEN
MOUNTAIN POWER CORPORATION
(Registrant)
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By:
/s/ Robert J. Griffin
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November
7, 2005
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Robert
J. Griffin
Vice
President, Chief Financial Officer, Treasurer and Principal Accounting
Officer
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Date
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EXHIBIT
INDEX
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Exhibit
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Description
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99.1
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Presentation
made on November 8, 2005 at the 40th
EEI Financial Conference.
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