frm8k520.htm

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

Date of Report (Date of earliest event reported) May 20, 2008

CENTRAL VERMONT PUBLIC SERVICE CORPORATION

(Exact name of registrant as specified in its charter)

Vermont

(State or other jurisdiction

of incorporation)

1-8222

(Commission

File Number)

03-0111290

(IRS Employer

Identification No.)

77 Grove Street, Rutland, Vermont 05701

(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (802) 773-2711

N/A

(Former name or 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:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

This presentation will be conducted at the CVPS utility analyst luncheon in New York City, New York before an audience of electric industry analysts and industry professionals on Thursday, May 22, 2008.

Slide 1

CVPS Analyst Luncheon

New York City, May 22, 2008

Presented by Robert Young, Pamela Keefe and William Deehan

Slide 2

Safe Harbor Statement

Statements contained in this presentation that are not historical fact are forward-looking statements within the meaning of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Whenever used in this presentation, the words “estimate,” “expect,” “believe,” or similar expressions are intended to identify such forward-looking statements. Forward-looking statements involve estimates, assumptions, risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. Actual results will depend upon, among other things, the actions of regulators, performance of the Vermont Yankee nuclear power plant, effects of and changes in weather and economic conditions, volatility in wholesale power markets, our ability to maintain our current credit ratings, performance of our unregulated businesses, and other considerations such as the operations of ISO-New England, changes in the cost or availability of capital, authoritative accounting guidance, and the effect of the volatility in the equity markets on pension benefit and other costs. We cannot predict the outcome of any of these matters; accordingly, there can be no assurance that such indicated results will be realized. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Contact Information

Pamela J. Keefe

Vice President, CFO & Treasurer

(802) 747-5435

e-mail: pkeefe@cvps.com

Ann Warrell

Investor Relations Specialist

(802) 747-5697

e-mail: awarrel@cvps.com

Slide 3

CVPS Profile

• Vermont’s largest integrated electric utility

• CVPS serves 158,000 customers in a territory covering half of the area of Vermont

• Rural service territory of 20 customers per mile of line

Credit Ratings	Standard & Poor’s
Corporate Credit Rating	BB+
First Mortgage Bonds	BBB+
Preferred Stock	B+

COMMON STOCK PROFILE (NYSE: CV) Quarter Ended March 31, 2008
Market Capitalization	$	246,863,411
Book Value	$	18.52
Market-to-Book		1.29
12-month Range	$	22.40-$41.05
Price/Earnings Ratio		15.62
Debt/Equity Ratio		61	%
Average Daily Volume		62,044
Shares Outstanding		10,329,013
Annualized Dividend Yield		3.85	%

Slide 4

Today’s Discussion Topics

Accomplishments & attributes

Key measures of success

Regulatory update

Infrastructure improvements and investments

Financial position and performance

Long-term strategy

Slide 5

Attributes & Recent Accomplishments

Rate increase 2.3% January 2008

Lowest rates among major utilities in New England

Among lowest carbon-emitting power mixes in the U.S.

2007 EEI Emergency Recovery Award for April 2007 storm response

Customer transactional satisfaction rated 90%

Exceeded 17 SERVE standards for third straight year

CVPS ranked first in Northeast region for price and value, image, and billing and payment in J.D. Power survey

Slide 6

Key Measures of Success

Keep customer rates low while maintaining superior reliability

Meet SERVE standards

Restore credit rating to investment grade

Increase rate base on which shareholders earn a return

Complete capital projects through Asset Management Plan, including AMI, through 2012 and beyond

Achieve positive regulatory outcomes

Gain approval of Alternative Regulation Proposal

Maintain positive, productive relationship with regulators

Secure stable, long-term, clean, competitively priced energy supplies

Negotiate future contracts with Vermont Yankee and Hydro-Quebec

Meet Vermont’s RPS requirements

Slide 7

Regulatory Update

Alternative Regulation Plan

Proposal filed Aug. 31, 2007

CVPS proposal includes:

Quarterly power cost adjustment mechanism

Annual earnings sharing mechanism (subject to collar)

Annual base rate adjustment (subject to caps)

Timeline for rate adjustments and plan expiration

Hearings scheduled for July and negotiations are ongoing

Plan would be effective Nov. 1 (whether settled or litigated)

Anticipate additional rate change Jan. 1, 2009

Slide 8

Regulatory Update

Vermont Yankee relicensing

As part of 2002 sale of Vermont Yankee, Vermont Legislature to vote on plant relicensing

Public Service Board has permitting authority

New, favorable long-term utility contracts would position Vermont Yankee as critical power resource in Vermont

Vermont Yankee Timeline
Public Service Board to address Entergy/Vermont Yankee corporate restructuring	September 2008
Nuclear Regulatory Commission decision expected	November 2008
Vermont Public Service Board expected to address Vermont Yankee relicensing	Spring 2009
Vermont Legislature expected to address Vermont Yankee relicensing	May 2009
Vermont Yankee Forward Capacity Market bidding for June 2012 to May 2013 pricing	2009
Current Vermont Yankee license expires	March 21, 2012

Slide 9

Regulatory Update

Renewable Portfolio Standard

Vermont SPEED (RPS) law requires that, by 2013, new renewable resources must equal 5% of state’s total retail sales in 2005, plus net sales growth after 2005

New renewables may be:

Hydro, methane recapture, wind, solar, wood products, etc.

Generated in-state or outside Vermont

Less than 80 megawatts

Increased output from pre-2005 renewable project

Standard applies collectively to Vermont utilities; if not met, individual RPS standards would be applied

Slide 10

Aging Infrastructure Drives Cap Ex Increases

CAIDI performance (outage duration) has proven consistent over time, demonstrating continued, superior outage response performance

SAIFI performance (outage frequency) has declined

Trees, equipment failure and animal outages are primary causes

Asset Management Plan addresses reliability with targeted spending

OVERALL SYSTEM RELIABILITY (SAIFI)
2003	1.86
2004	1.55
2005	1.86
2006	2.09
2007	2.45
2008	2.68

System reliability results indicate need for long-term infrastructure investments

Slide 11

Asset Management Plan Prioritizes Capital Projects

Asset Management Plan Objectives

Use continuous improvement techniques to optimize efficiencies of transmission & distribution, generating and supporting infrastructure assets

Manage the long term risk of our aging infrastructure

Improve the safety of our assets and keep the system in compliance with the National Electric Safety Code

Minimize capex spikes by leveling expenditures over time

Economically improve system reliability

Develop optimal replacement and maintenance programs that balance meeting the SERVE standards and customer expectations with available capital and system replacement needs

Slide 12

Future Energy Planning Considerations

System reliability

Improving transmission and distribution infrastructure to ensure continued high system reliability

Cost

Forward capacity market

Low emission choices are more expensive

Environmental Impact

CVPS committed to responsible stewardship of the environment through CVPS Cow Power™ and CVPS plug ‘n go™

Energy portfolio diversity

Plan to improve energy portfolio diversity to limit risk exposure to any given source

Slide 13

Future Power Supply Planning

Integrated resource approach to acquiring future power supply

Competitive solicitation

Long-term contract negotiations

New Vermont utility-owned power sources

Distributed generation

Integrated Resource Plan to be updated in 2008

2007 CVPS ENERGY SOURCES
Nuclear (1)	48.0%
Hydro (2)	39.3%
Oil (3)	1.8%
Wood (4)	3.9%
Methane (5)	0.1%
System Power/unspecified (6)	6.9%

Slide 14

Future Power Supply Planning Under Way

Joint utility feasibility study will show potential for new,

in-state, base load generation

Phase I results considered cost estimates and economic feasibility

Phase II of study results expected at end of May, will discuss infrastructure, fuel, transmission and permitting considerations

Department of Public Service public engagement process completed

Report details available online at http://www.vermontsenergyfuture.info/Results%20and%20reports.html

Revealed attributes customers want in future power resources

Results will be incorporated in updated CVPS Integrated Resource Plan

Slide 15

Developments in Power Supply Planning

Forward Capacity Market

New market undergoing administered transition from 2006 to 2010

First auction showed strong competition; considerable capacity bid into market

CVPS expects to largely self-supply capacity requirement through 2012

Expected cost impact of $1.5 million per year

Demand-side management

Vermont efficiency utility targeting specific areas for

transmission DSM

CVPS including DSM as part of Southern Loop

transmission solutions

CVPS sells ~50% of its retail kWh through time-of-day and load management rate offerings

Slide 16

2008 First Quarter Financial Summary

Q1 earnings of $0.56 per share

Successful first mortgage bond issuance

S-3 shelf registration filed

	Quarter ended March 31, 2008		Quarter ended March 31, 2007
Operating Revenues
Retail sales	$	75,406	$	75,541
Resale sales		13,502		9,607
Other		2,316		1,548
Total operating revenue	$	91,224	$	86,696
Operating Expenses
Purchased power	$	42,906	$	42,260
Other operating expenses		40,027		35,535
Income tax expense		1,859		2,838
Equity in Earnings of Affiliates	$	4,185	$	1,702
Net Income	$	5,908	$	5,706
Earnings per share of common stock – diluted	$	0.56	$	0.55

Dollars in thousands, except per share amounts

Slide 17

Rate Base Trends

CVPS RATE BASE – ACTUAL AND PROJECTED

Dollars in millions	2005	2006	2007	2008	2009	2010	2011	2012
Projected Rate Base	$236	$236	$302	$344	$386	$413	$444	$477

Projected CAGR of 8% to 10% from 2007 - 2012

Slide 18

Capital Spending Trends

HISTORIC & PROJECTED CAPITAL SPENDING
2005	$	17,467,055
2006	$	18,059,326
2007	$	23,065,404
2008	$	42,605,736
2009	$	28,735,550
2010	$	49,128,145
2011	$	52,432,547
2012	$	47,516,520

Historical spending has not been inflated to 2008 dollars. Projected spending includes inflationary assumptions.

Slide 19

VELCO Investment Background

• Vermont’s transmission operator

• FERC-regulated

• Owned by 20 Vermont utilities, including investor-owned, municipals and cooperatives

• Independent management and board of directors

• CVPS owns 46%; equity investments generally based on load share of 43%

• Organized LLC (called Transco) in 2006 to improve tax advantages of transmission ownership

Slide 20

Additional Capital Investments

VELCO

2007 investment financed with a $53 million bridge loan

Refinanced with first mortgage bonds at 6.83%

2008 VELCO investment up to

$2 million

Next sizable VELCO investment in 2009

Beyond 2009, amounts to be determined

VELCO INVESTMENTS 2004 - 2009
2004	$	7,000,000
2005	$	0
2006	$	23,291,080
2007	$	53,000,000
2008	$	2,000,000	*
2009	$	22,804,954

* possible 2008 investment up to $2 million

Slide 21

Capital Needs & Drivers

Issued $60 million first mortgage bonds (20-year, 6.83%) to replace bridge facility

Subject to regulatory approvals, planning equity offering up to

$25 million later in 2008

Will likely issue debt in varying amounts annually through 2012

Tentatively planning to issue equity around 2010 to rebalance capital structure

Targeting debt to total capital over time of 40% to 45%

Slide 22

2008 Earnings Guidance & Dividends

2008 Earnings Guidance

$1.50 - $1.60 per diluted share

Guidance Drivers:

Variability in transmission costs

Increased capital spending not recovered in rates

(due to lag)

Expected market price of power (exposure largely on resale sales)

Dividends

$ 0.92 annual dividend

61% payout ratio (as of March 31, 2008), in line with peers

Long-term strategy is for payout ratio to remain in line with peer utilities

Over short term, significant amount of available capital is be deployed in infrastructure improvements

Slide 23

Long-Term Strategy

Provide superior customer service and reliability

Improve financial strength to restore our credit rating to investment grade and to fuel capital investments in our core business and VELCO

Partner with the state and other utilities to create a vibrant electric future for Vermont

These strategies create shareholder value over the long term

Slide 24

Investment Attributes

1. Progress continues toward improving financial strength

2. Competitive rates and superior operating performance

3. Increasing shareholder value through core business investments

4. Dividend payout in line with peer utilities

Slide 25

Appendix

CVPS Analyst Luncheon

Slide 26

Current CVPS Power Supply Among Cleanest

2007 CVPS ENERGY SOURCES
Nuclear (1)	48.0%
Hydro (2)	39.3%
Oil (3)	1.8%
Wood (4)	3.9%
Methane (5)	0.1%
System Power/unspecified (6)	6.9%

2007 U.S. ENERGY SOURCES
Coal	49.0%
Gas	21.0%
Nuclear	19.0%
Hydro	6.0%
Renewables	2.0%
Oil	2.0%
Other	1.0%

Slide 27

Favorable Long-term Power Contracts

Current market price for power 8-10 cents/kWh

Vermont Yankee contract, license expires in 2012

Power currently priced at 4.1 cents/kWh

Supplies 32% of state’s power and 43% of CVPS’s power

Hydro-Quebec contract begins to expire in 2012

Power currently priced at 6.5 cents/kWh

Power contract ends in phases from 2012 to 2016

Supplies 31% of state’s and 30% of CVPS’s power

Slide 28 Adjusted Rate Base (as approved in 2007 rate case)	dollars in millions
Utility plant in service, net	$	284,794
Investments in affiliates		93,424
Working capital allowance		23,621
Accumulated deferred income taxes		(53,134	)
Accrued post retirement medical expenses		(2,737	)
All other, net		(701	)
Total Rate Base	$	343,884
Test year is the 12 months ended Dec. 31, 2006

Slide 29

Cost of Capital

Rates according to 2007 approved rate case

	Adjusted		% of Total			Cost Rate			Weighted%
Long Term Debt	$	176,750		47.29	%		6.35	%		3.00	%
Preferred Stock		10,054		2.69	%		5.32	%		0.14	%
Common Equity		186,933		50.02	%		10.21	%		5.11	%
Total	$	373,737		100.00						8.25	%

Slide 30

CVPS Transactional Customer Satisfaction Measured Quarterly
July 06	92%
Oct 06	90%
Jan 07	90%
April 07	93%%
July 07	92%
Oct 07	88%
Jan 08	93%
April 08	90%
National Average	87%

Slide 31

CVPS Compares Favorably in JD Power Customer Survey
Overall Residential Customer Satisfaction Index
PPL Electric Utilities	710
Allegheny Power	688
Central Vermont Public Service	687
Duquesne Light	677
Public Service Electric and Gas	665
Energy East	664
FirstEnergy-East	664
Exelon-PECO	658
EAST REGION AVERAGE	641
Pepco Holdings	634
National Grid	631
Northeast Utilities	622
NSTAR Electric	614
Baltimore Gas & Electric	610
Con Edison	603
Long Island Power Authority	567

Slide 32

Vermont Regulators

Vermont Department of Public Service

Public advocate

Commissioner appointed by governor

Vermont Public Service Board

Adjudicating body

Three-member board

Appointed by governor

Six-year, staggered terms

Governor James Douglas (R)

First elected in 2002, currently in third, two-year term

Previously elected as Vermont Treasurer and Secretary of State

Seeking re-election in 2008

Slide 33

Future Energy Planning

Time Period	Bulk Supply Options	Core Actions	Renewables	Demand	AMI/Rates
2012	HQ contract Extension Negotiations	Resource Choices	SPEED New Renewable CHP	Efficiency Vermont Distributed Utility Resources	Automated Metering/Information Investment Rate Redesign
2011	HQ contract Extension Negotiations	E-23 Resource Solicitation	SPEED New Renewable CHP	Efficiency Vermont Distributed Utility Resources	Automated Metering/Information Investment Rate Redesign
2010	HQ contract Extension Negotiations	Integrated Resource Plan	SPEED New Renewable CHP	Efficiency Vermont Distributed Utility Resources	Automated Metering/Information Investment Rate Redesign
2009	HQ contract Extension Negotiations	Resource Choice & Approvals	SPEED New Renewable CHP	Efficiency Vermont Distributed Utility Resources	Rate Redesign
2008	HQ contract Extension Negotiations ENVY Contract Renegotiation	Legislative Process E-23 Resource Solicitation	SPEED New Renewable CHP	Efficiency Vermont Distributed Utility Resources	Rate Redesign
2007	HQ contract Extension Negotiations ENVY Contract Renegotiation Vermont Power Plant Feasibility Study	DPS Public Engagement Process Integrated Resource Plan	SPEED New Renewable CHP	Efficiency Vermont Distributed Utility Resources	Rate Redesign

Slide 34

CVPS Cow Power™ Supports Renewable Energy Development

Nation’s first direct farm-to-consumer renewable energy choice program

Creates market for manure-based methane generation

Over 4,000 CVPS customers (2.5%) voluntarily purchase Cow Power

Participation ranked in top 20% of renewable choice programs nationwide

Winner of 2006 Governor’s Environmental Excellence Award

Finalist for 2007 Edison Award

Slide 35

CVPS plug ‘n go™ Makes Environmental Responsibility Attractive to Customers

Program allows customer use of plug-in hybrid electric vehicles with CVPS off-peak electric rates

Allows customers to reduce carbon emissions and gasoline costs by substituting off-peak electricity

Off-peak rates provide transportation cost equivalent to less than $1 per gallon of gasoline

First utility in the nation to offer advantage of off-peak charging with standard tariff rates to plug-in hybrid and electric vehicle owners/customers

SIGNATURE

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.

CENTRAL VERMONT PUBLIC SERVICE CORPORATION

By	/s/ Pamela J. Keefe Pamela J. Keefe Vice President, Chief Financial Officer, and Treasurer

May 20, 2008