The question Vermont is asking an arbitration panel to decide whether the ice storm of 1998 was an “Act of God” or just a bad winter storm made worse by ice buildup and structural deficiencies in Hydro-Quebec’s grid. It took 66 days for Hydro-Quebec to resume supplying Vermont with power.

Fifteen Vermont utilities want the 4 billion-dollar contract declared null and void on the grounds that the storm demonstrated Hydro-Quebec is incapable of guaranteeing Vermont the electricity they signed the deals for. The deal was signed in 1987 and was supposed to run for twenty years with an additional five-year option. The deal represents 38% of Vermont’s electricity market.

The arbitration panel will be finished their closed-door hearings on September 14. The hearings are being held in Burlington, Vermont. Two more weeks of hearings will be held in November and a final decision is expected by February.

Hydro-Quebec is saying the utilities are just not happy because the market price of electricity has fallen to half of what they have to pay Hydro-Quebec. Current electricity prices are at 3-3.5 cents a kilowatt-hour compared to Hydro’s 6.3 cents. Rates for the fifteen Vermont utilities will go up a further 14% in November.

The Vermont utilities are unhappy over the $18 million they had to pay Hydro during the ice storm even though they weren’t receiving any electricity. They are requesting the arbitration panel force Hydro to give the money back.