State of Vermont

Vermont's two largest electric utilities - Central Vermont Public Service and Green Mountain Power - had entered into very high cost power purchase arrangements. These arrangements included long-term supply contracts with Hydro-Quebec and a number of independent power producers, as well as obligations with respect to the Vermont Yankee nuclear facility. The aggregate value of these "stranded costs" exceeded $1 billion - a huge sum for Vermont.

The State of Vermont engaged Gordian Group to advise it in connection with the effect on the utilities of various levels of rate relief. Gordian Group analyzed overall values, likely securities prices and solvency under a variety of scenarios that contemplated securitizations, rejections of contracts in bankruptcy and various out-of-court renegotiation possibilities.