**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-K**

| **GREEN                MOUNTAIN POWER CORPORATION**  (Exact                name of registrant as specified in its charter) |
|--------------------------------------------------------------------------------------------------------------------------------------|
| **VERMONT**  State                or other jurisdiction ofIncorporation                or organization                     | **03-0127430**  (I.R.S.                EmployerIdentification                No.) |
|  **COLCHESTER                VT** (Address                of principalExecutive                offices)                    |  **05446**  (Zip                Code) |
|  Registrant’s                telephone number, including area code                (802) 864-5731                          |
|  Securities                registered pursuant to Section 12(b) of the Act:                                                     |
|  **Title                of each class** COMMON                STOCK, PAR VALUE$3.33-1/3                PER SHARE           |  **Name                of each exchange on which registered** NEW                YORK STOCK EXCHANGE |
|  Securities                registered pursuant to Section 12(g) of the Act:                None                                 |

** **
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** **
** **
** **

**The      aggregate market value of the voting stock held by non-affiliates of the      registrant as of June 30, 2006, was approximately $179,174,308 based on the      closing price of $33.99 for the Common Stock on the New York Stock Exchange      as      reported by The Wall Street Journal.**

**The      number of shares of Common Stock outstanding on February 28,      2007,**
**was      5,307,592.**

----

| **Table                of Contents** |                                                                                                                                                          | **Page** |
|--------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **Part                I**            |                                                                                                                                                          |     |
| Item                1,               | Business                                                                                                                                                      | 3        |
| Item                1A,              | Risk                Factors                                                                                                                                   | 17       |
| Item                1B,              | Unresolved                Staff Comments                                                                                                                      | 17       |
| Item                2,               | Properties                                                                                                                                                    | 17       |
| Item                3,               | Legal                Proceedings                                                                                                                              | 20       |
| Item                4,               | Submission                of Matters to a Vote of Security Holders                                                                                            | 20       |
| **Part                II**           |                                                                                                                                                          |     |
| Item                5,               | Market                and Registrant’s Common Equity, RelatedStockholder                Matters and Issuer Purchases ofEquity                Securities | 20  |
| Item                6,               | Selected                Financial Data                                                                                                                        | 22       |
| Item                7,               | Management’s                Discussion and Analysis of Financial Conditionand                Results of Operations                                      | 23  |
| Item                7A,              | Quantitative                and Qualitative Disclosures About Market Risk                                                                                     | 40       |
| Item                8,               | Financial                Statements and Supplementary Data                                                                                                    | 48       |
| Item                9,               | Changes                in and Disagreements with Accountantson                Accounting and Financial Disclosure                                             | 83  |
| Item                9A,              | Controls                and Procedures                                                                                                                        | 83       |
| Item                9B,              | Other                Information                                                                                                                              | 87       |
| **Part                III**          |                                                                                                                                                          |     |
| Item                10,              | Directors                and Executive Officers of the Registrant                                                                                             | 87       |
| Item                11,              | Executive                Compensation                                                                                                                         | 87       |
| Item                12,              | Ownership                of Certain Beneficial Owners andManagement                and Related Stockholder Matters                                            | 87  |
| Item                13,              | Certain                Relationships and Related Transactions                                                                                                 | 87       |
| Item                14,              | Principal                Accounting Fees and Services                                                                                                         | 87       |
| **Part                IV**           |                                                                                                                                                          |     |
| Item                15,              | Exhibits                and Financial Statement Schedules                                                                                                     | 87       |

----

**PART      I**

**FORWARD-LOOKING      STATEMENTS**

**ITEM      1. BUSINESS**

**THE      COMPANY**

| ·   | 31.3                percent from residential customers; |
|--------------------|---------------------------------------------------------|

| ·   | 31.1                percent from small commercial and industrial                customers; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | 20.5                percent from large commercial and industrial                customers; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | 11.1                percent from sales to other utilities;                and |
|--------------------|-------------------------------------------------------------------------------|

| ·   | 6.0                percent from other sources. |
|--------------------|------------------------------------------------|

----

| ·   | 50.8                percent from hydroelectric sources (38.4 percent Hydro Quebec, 7.8                percent                Company-owned, and 4.6 percent independent power                producers); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 47.3                percent from a nuclear generating source (the Entergy Nuclear Vermont                Yankee, LLC ("ENVY") nuclear plant described below); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | 4.3                percent from wood; |
|--------------------|---------------------------------------|

| ·   | 2.2                percent from natural gas or oil;                and |
|--------------------|------------------------------------------------------------------------|

| ·   | measurably                no percent from wind after sales of renewable energy                certificates. |
|--------------------|-------------------------------------------------------------------------------------------------------------|

----

| GREEN                  MOUNTAIN POWER CORPORATION                                                                                              |   |                                              |      |     |   |      |   |     |      |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|-----------|----------|--------|-----------|--------|----------|-----------|----------|--------|
| Operating                  Statistics                                                                                                          |   | For                  the years ended December 31, |      |
|                                                                                                                                           |   | **2006**                                          |      | **2005** |   | **2004**  |   | **2003** |      | **2002** |   |
|                                                                                                                                           |   |                                              |      |     |   |      |   |     |      |     |   |
| Net                  system peak in MW (1)                                                                                                     |   |                                              | 365.5     |     |   | 351.9     |   |     | 326.7     |     |   | 330.2 |   |   | 342.0 |   |
| MWH                  Production and purchases (2)                                                                                              |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| Hydro                                                                                                                                          |   |                                              | 1,038,129 |     |   | 879,147   |   |     | 777,292   |     |   | 838,855 |   |   | 901,998 |   |
| Wind,                  net of renewable energy credits sold                                                                                    |   |                                              | 821       |     |   | 1,484     |   |     | -         |     |   | 8,568 |   |   | 9,577 |   |
| Nuclear                                                                                                                                        |   |                                              | 965,080   |     |   | 816,989   |   |     | 764,010   |     |   | 884,585 |   |   | 771,781 |   |
| Conventional                  steam                                                                                                            |   |                                              | 87,993    |     |   | 93,258    |   |     | 89,622    |     |   | 100,402 |   |   | 85,910 |   |
| Internal                  combustion                                                                                                           |   |                                              | 6,239     |     |   | 7,547     |   |     | 13,026    |     |   | 12,603 |   |   | 4,090 |   |
| Combined                  cycle                                                                                                                |   |                                              | 38,081    |     |   | 22,328    |   |     | 32,224    |     |   | 68,488 |   |   | 81,362 |   |
| Bilateral                  and system purchases(3)                                                                                             |   |                                              | 344,534   |     |   | 647,094   |   |     | 804,962   |     |   | 2,426,091 |   |   | 2,347,086 |   |
| Total                  production                                                                                                              |   |                                              | 2,480,877 |     |   | 2,467,847 |   |     | 2,481,136 |     |   | 4,339,592 |   |   | 4,201,804 |   |
| Less:                  non-firm sales to other utilities                                                                                       |   |                                              | 439,542   |     |   | 365,000   |   |     | 408,601   |     |   | 2,284,003 |   |   | 2,104,172 |   |
| Production                  for firm sales                                                                                                     |   |                                              | 2,041,335 |     |   | 2,102,847 |   |     | 2,072,535 |     |   | 2,055,589 |   |   | 2,097,632 |   |
| Less                  firm sales                                                                                                               |   |                                              | 1,966,159 |     |   | 2,011,568 |   |     | 1,973,093 |     |   | 1,937,376 |   |   | 1,951,959 |   |
| Losses                  and company use (MWH)                                                                                                  |   |                                              | 75,176    |     |   | 91,279    |   |     | 99,442    |     |   | 118,213 |   |   | 145,673 |   |
| Losses                  as a % of total production                                                                                             |   |                                              | 3.03      | %        |   | 3.70      | %      |     | 4.01      | %        |   | 2.72 | % |   | 3.47 | % |
| System                  load factor (4)                                                                                                        |   |                                              | 63.8      | %        |   | 68.2      | %      |     | 72.4      | %        |   | 71.1 | % |   | 70.0 | % |
| Net                  Production (% of Total)                                                                                                   |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| Hydro                                                                                                                                          |   |                                              | 41.8      | %        |   | 35.6      | %      |     | 31.3      | %        |   | 19.3 | % |   | 21.5 | % |
| Wind                                                                                                                                           |   |                                              | 0.0       | %        |   | 0.1       | %      |     | 0.0       | %        |   | 0.2 | % |   | 0.2 | % |
| Nuclear                                                                                                                                        |   |                                              | 38.9      | %        |   | 33.1      | %      |     | 30.8      | %        |   | 20.4 | % |   | 18.3 | % |
| Conventional                  steam                                                                                                            |   |                                              | 3.5       | %        |   | 3.8       | %      |     | 3.6       | %        |   | 2.3 | % |   | 2.0 | % |
| Internal                  combustion                                                                                                           |   |                                              | 0.3       | %        |   | 0.3       | %      |     | 0.5       | %        |   | 0.3 | % |   | 0.1 | % |
| Combined                  cycle                                                                                                                |   |                                              | 1.5       | %        |   | 0.9       | %      |     | 1.3       | %        |   | 1.6 | % |   | 1.9 | % |
| Bilateral                  and system purchases                                                                                                |   |                                              | 13.9      | %        |   | 26.2      | %      |     | 32.5      | %        |   | 56.0 | % |   | 56.0 | % |
| Total                                                                                                                                          |   |                                              | 100.0     | %        |   | 100.0     | %      |     | 100.0     | %        |   | 100.0 | % |   | 100.0 | % |
|                                                                                                                                           |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| Sales                  (MWH)                                                                                                                   |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| Residential                                                                                                                                    |   |                                              | 583,228   |     |   | 598,606   |   |     | 580,710   |     |   | 581,047 |   |   | 553,294 |   |
| Commercial                  & industrial - small                                                                                           |   |                                              | 707,031   |     |   | 717,451   |   |     | 698,000   |     |   | 696,598 |   |   | 695,504 |   |
| Commercial                  & industrial - large                                                                                           |   |                                              | 668,522   |     |   | 686,260   |   |     | 684,104   |     |   | 651,709 |   |   | 689,618 |   |
| Other                                                                                                                                          |   |                                              | 4,143     |     |   | 5,935     |   |     | 7,112     |     |   | 4,986 |   |   | 9,773 |   |
| Total                  retail sales                                                                                                            |   |                                              | 1,962,924 |     |   | 2,008,252 |   |     | 1,969,926 |     |   | 1,934,340 |   |   | 1,948,189 |   |
| Sales                  to Municipals & Cooperatives (Rate W)                                                                               |   |                                              | 3,235     |     |   | 3,316     |   |     | 3,166     |     |   | 3,036 |   |   | 3,770 |   |
| Total                  Requirements Sales                                                                                                      |   |                                              | 1,966,159 |     |   | 2,011,568 |   |     | 1,973,093 |     |   | 1,937,376 |   |   | 1,951,959 |   |
| Other                  Sales for Resale                                                                                                        |   |                                              | 439,542   |     |   | 365,000   |   |     | 408,601   |     |   | 2,284,003 |   |   | 2,104,172 |   |
| Total                  sales (MWH)                                                                                                             |   |                                              | 2,405,701 |     |   | 2,376,568 |   |     | 2,381,694 |     |   | 4,221,379 |   |   | 4,056,131 |   |
| Average                  Number of Electric Customers                                                                                          |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| Residential                                                                                                                                    |   |                                              | 77,862    |     |   | 76,481    |   |     | 75,507    |     |   | 74,693 |   |   | 73,861 |   |
| Commercial                  and industrial small                                                                                               |   |                                              | 13,951    |     |   | 13,752    |   |     | 13,515    |     |   | 13,344 |   |   | 13,165 |   |
| Commercial                  and industrial large                                                                                               |   |                                              | 27        |     |   | 27        |   |     | 24        |     |   | 25 |   |   | 29 |   |
| Other                                                                                                                                          |   |                                              | 62        |     |   | 60        |   |     | 62        |     |   | 65 |   |   | 65 |   |
| Total                                                                                                                                          |   |                                              | 91,902    |     |   | 90,320    |   |     | 89,108    |     |   | 88,127 |   |   | 87,120 |   |
| Average                  Revenue Per KWH (Cents)                                                                                               |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| Residential                                                                                                                                    |   |                                              | 12.90     |     |   | 13.12     |   |     | 13.15     |     |   | 12.98 |   |   | 12.96 |   |
| Commercial                  & industrial - small                                                                                           |   |                                              | 10.57     |     |   | 10.66     |   |     | 10.63     |     |   | 10.40 |   |   | 10.44 |   |
| Commercial                  & industrial - large                                                                                           |   |                                              | 7.36      |     |   | 7.55      |   |     | 7.44      |     |   | 7.41 |   |   | 7.31 |   |
| Total                  retail                                                                                                                  |   |                                              | 10.20     |     |   | 10.38     |   |     | 10.32     |     |   | 10.22 |   |   | 10.09 |   |
| Average                  Use and Revenue Per Residential Customer                                                                              |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| KWh's                                                                                                                                          |   |                                              | 7,491     |     |   | 7,827     |   |     | 7,691     |     |   | 7,779 |   |   | 7,491 |   |
| Revenues                                                                                                                                       |   | $                                                 | 966       |     | $      | 1,027     |   | $        | 1,012     |     | $      | 1,010 |   | $ | 971 |   |
|                                                                                                                                           |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| (1)                  MW - Megawatt is one thousand kilowatts.                                                                                  |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| (2)                  MWH - Megawatt hour is one thousand kilowatt hours.                                                                       |   |                                              |      |     |   |      |   |     |      |     |   |   |   |   |   |   |
| (3)Includes                  MWh generated for renewable energy credits sold                                                                   |   |
| (4)                  Load factor is based on net system peak and firm MWH production                  less                  off-system losses. |   |                                              |

**STATE        AND FEDERAL REGULATION**

**General.**

**Licensing.**

|                           | **Issue                  Date**  | **Licensed**Period                                                         |
|--------------------------------|----------------------------------|----------------------------------------------------------------------------|
|                           |                             |                                                                       |
| Project                  Site: |                             |                                                                       |
| Bolton                         | February                  5,1982 | February                  5,1982 - February 4, 2022                        |
| Essex                          | March                  30, 1995  | March                  1, 1995 - March 1, 2025                             |
| Vergennes                      | July                  30, 1999   | June                  1, 1999 - May 31, 2029                               |
| Waterbury                      | July                  20, 1954   | expired                  August 31, 2001, renewal                  pending |

**Department        of Public Service Twenty-Year Electric Plan.**

**RECENT        RATE DEVELOPMENTS**

| ·   | Allowed                the Company to raise rates 1.9 percent, effective January 1, 2005;                and 0.9                percent effective January 1, 2006, if the increases are supported                by cost                of service schedules submitted 60 days prior to the effective dates.                The                Company filed cost of service schedules pursuant to the plan in November                2004, November 2005, and December 2006 respectively, and received                approval                from the VPSB to implement the plan's 1.9 percent rate increase,                effective                January 1, 2005, and the plan’s 0.9 percent rate increase, effective                January 1, 2006. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                2003 Rate Plan set and capped the Company's allowed return on equity                at                10.5 percent for the period beginning January 1, 2003 through December                31,                2006 and provided for recovery of various regulatory assets, including                the                remediation of the Pine Street environmental Superfund site in Burlington,                VT. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**MERGERS        AND ACQUISITIONS**

**SINGLE        CUSTOMER DEPENDENCE **

**COMPETITION        AND RESTRUCTURING**

**CONSTRUCTION        AND CAPITAL REQUIREMENTS**

**POWER        RESOURCES**

| Net                  Electricity Generated and Purchased and Capacity at Peak                       |   |
|-----------------------------------------------------------------------------------------------------|--------|
|                                                                                                |   | Generated                  and Purchased |   | Capacity |   |
|                                                                                                |   | for                  the year ended |   | At                  time of |   |
|                                                                                                |   | December                  31, 2006 |   | of                  annual peak |   |
|                                                                                                |   | **MWH** |   | **percent** |   | **KW** |   | **percent** |   |
|                                                                                                |   |          |   |   |   |   |   |   |   |
| Wholly-owned                  plants:                                                               |   |   |   |   |   |   |   |   |   |
| Hydro                                                                                               |   |   | 160,140 |   |   | 7.8 | % |   | 23,370 |   |   | 6.4 | % |
| Diesel                  and Gas Turbine                                                             |   |   | 6,239 |   |   | 0.3 | % |   | 58,550 |   |   | 15.9 | % |
| Wind*                                                                                               |   |   | 821 |   |   | 0.0 | % |   | 960 |   |   | 0.3 | % |
| Jointly-owned                  plants:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Wyman                  #4                                                                           |   |   | 583 |   |   | 0.0 | % |   | 6,470 |   |   | 1.8 | % |
| Stony                  Brook I                                                                      |   |   | 26,116 |   |   | 1.3 | % |   | 30,936 |   |   | 8.4 | % |
| McNeil                                                                                              |   |   | 29,099 |   |   | 1.4 | % |   | 5,770 |   |   | 1.6 | % |
| Long                  Term Purchases:                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Vermont                  Yankee/ENVY                                                                |   |   | 965,080 |   |   | 47.3 | % |   | 97,451 |   |   | 26.5 | % |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Hydro                  Quebec                                                                       |   |   | 784,098 |   |   | 38.4 | % |   | 107,391 |   |   | 29.2 | % |
| Stony                  Brook I                                                                      |   |   | 11,965 |   |   | 0.6 | % |   | 14,124 |   |   | 3.8 | % |
| Other:                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Independent                  Power Producers                                                        |   |   | 151,382 |   |   | 7.4 | % |   | 22,593 |   |   | 6.1 | % |
| -                                                                                                   |   |   |   |   |   |   |   |   |   |   |   | - |   |
| ISO-NE                  and Short-term purchases, net                                               |   |   | (94,188 | ) |   | -4.7 | % |   | - |   |   | - |   |
| Net                  Own Load                                                                       |   |   | 2,041,335 |   |   | 100.0 | % |   | 367,615 |   |   | 100.0 | % |
| *Net                  of renewable energy certificates sold representing                  10,000MWh |   |   |

**Vermont        Yankee Nuclear Power Corporation Contract**

**Hydro        Quebec Power Supply Contracts**

| ·   | deliveries                of a portion of our contract power supply entitlements from Hydro                Quebec; |
|--------------------|--------------------------------------------------------------------------------------------------------------------|
| ·   | access                to surplus hydroelectric energy from Hydro Quebec;                and |
|--------------------|---------------------------------------------------------------------------------------------|
| ·   | a                provision for emergency transfers and mutual backup to improve reliability                for both the Hydro Quebec system and the New England                systems. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Morgan        Stanley Contract -**

**JP        Morgan Contract**

**ISO-NE        and Short-term Opportunity Purchases and Sales -**

**Stony        Brook I.**

**Wyman        Unit #4.**

**McNeil        Station.**

**Independent        Power Producers.**

**Company        Hydroelectric Power.**

**VELCO.**

**Transco.        **

**Fuel.**

**SEGMENT        INFORMATION**

**SEASONAL        NATURE OF BUSINESS**

**EMPLOYEES**

**ENERGY        EFFICIENCY**

**RATE        DESIGN**

**CURTAILABLE        SERVICE**

**ENVIRONMENTAL        MATTERS**

**UNREGULATED        BUSINESSES**

**EXECUTIVE        OFFICERS**

**AVAILABLE        INFORMATION**

**ITEM        1A. RISK FACTORS**

**ITEM        1B. UNRESOLVED STAFF COMMENTS**

**ITEM        2. PROPERTIES**

**GENERATING        FACILITIES**

| ·   | 33.6                percent of the outstanding common stock of Vermont Yankee Nuclear                Power                Corporation and, through its contract with ENVY, we are entitled                to 106.2                MW of the capacity of the Vermont Yankee nuclear generating plant, |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 1.1                percent (7.0 MW of a total 620 MW) joint-ownership share of the Wyman                #4                plant located in Maine, |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 8.8                percent (30.2 MW of a total 352 MW) joint-ownership share of the                Stony Brook I intermediate units located in Massachusetts,                and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | 11.0                percent (5.5 MW of a total 53 MW) joint-ownership share of the J.C.                McNeil wood-fired steam plant located in Burlington,                Vermont. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**TRANSMISSION        AND DISTRIBUTION**

**PROPERTY        OWNERSHIP**

**INDENTURE        OF FIRST MORTGAGE**

**GENERATING        FACILITIES OWNED**

|                                       |                               |                                 |       | **Name                    Plate** |
|--------------------------------------------|------------------------------------|--------------------------------------|------------|-----------------------------------|
|                                       |                               |                                 | **Energy** | **Rating**                        |
|                                       | **Location**                       | **Name**                             | **Source** | **MW**                            |
|                                       |                               |                                 |       |                              |
| *Wholly                    Owned*          |                               |                                 |       |                              |
| Hydro                                      | Middlesex,                    VT   | Middlesex                    #2      | Hydro      | 3.6                               |
|                                       | Marshfield,                    VT  | Marshfield                    #6     | Hydro      | 5.0                               |
|                                       | Vergennes,                    VT   | Vergennes                    #9      | Hydro      | 2.6                               |
|                                       | W.                    Danville, VT | W.                    Danville #15   | Hydro      | 1.0                               |
|                                       | Colchester,                    VT  | Gorge                    #18         | Hydro      | 3.0                               |
|                                       | Essex                    Jct., VT  | Essex                    #19         | Hydro      | 7.2                               |
|                                       | Waterbury,                    VT   | Waterbury                    #22 (1) | Hydro      | 5.5                               |
|                                       | Bolton,                    VT      | DeForge                    #1        | Hydro      | 8.4                               |
| Diesel                                     | Vergennes,                    VT   | Vergennes                    #9      | Oil        | 4.0                               |
|                                       | Essex                    Jct., VT  | Essex                    #19         | Oil        | 2.0                               |
| Gas                    Turbine             | Berlin,                    VT      | Berlin                    #5         | Oil        | 46.6                              |
|                                       | Colchester,                    VT  | Gorge                    #16         | Oil        | 17.0                              |
| Wind                                       | Searsburg,                    VT   | Searsburg                            | Wind       | 6.1                               |
| *Jointly                    Owned*         |                               |                                 |       |                              |
| Steam                                      | Yarmouth,                    ME    | Wyman                    #4          | Oil        | 7.0                               |
|                                       | Burlington,                    VT  | McNeil                    (2)        | Wood/Gas   | 5.5                               |
| Combined                                   | Ludlow,                    MA      | Stony                    Brook #1    | Oil/Gas    | 30.2                              |
| Total                    Winter Capability |                               |                                 |       | 154.7                             |

**CORPORATE      HEADQUARTERS**

**ITEM        3. LEGAL PROCEEDINGS**

**ITEM        4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

| 1.   | Shareholders                were asked to approve or disapprove the Agreement and Plan of Merger                by                and among the Company, Northern New England Energy Corporation and                Northstars Merger Subsidiary Corporation with 3,815,744 votes for,                85,694                votes against, and 20,284 votes                abstaining. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.   | Shareholders                were asked to approve or disapprove granting authority to proxy holders                to                vote in their discretion with respect to the approval of any proposal                to                postpone or adjourn the special meeting to a later date for a reasonable                business purpose, including to solicit additional proxies in favor                of the                approval of the Agreement and Plan Of Merger if there are not sufficient                votes for approval of the Agreement and Plan of Merger at the special                meeting, with 3,680,489 votes for, 212,081 votes against, and 29,152                votes                abstaining. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.   | There                were no broker non-votes with respect to the matters voted upon by                shareholders at the special meeting. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

**PART        II**

**ITEM        5.**
**MARKET        FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES        OF EQUITY SECURITIES**

| ** **                        | **HIGH**                   | **LOW**                    |
|-----------------------------------|----------------------------|----------------------------|
| **2006**                          |                       |                       |
| First                    Quarter  | $                    30.50 | $                    27.10 |
| Second                    Quarter | 34.00                      | 27.74                      |
| Third                    Quarter  | 34.00                      | 33.00                      |
| Fourth                    Quarter | 34.10                      | 33.22                      |
| **2005**                          |                       |                       |
| First                    Quarter  | $                    30.88 | $                    27.87 |
| Second                    Quarter | 30.00                      | 28.85                      |
| Third                    Quarter  | 33.03                      | 28.75                      |
| Fourth                    Quarter | 33.08                      | 26.62                      |

|   | **First**   | **Second**  | **Third**   | **Fourth**  |
|--------|-------------|-------------|-------------|-------------|
|   | **Quarter** | **Quarter** | **Quarter** | **Quarter** |
| 2005   | $0.25       | $0.25       | $0.25       | $0.25       |
| 2006   | $0.28       | $0.28       | $0.28       | $0.28       |

**PERFORMANCE        GRAPH**

|                                                    |   | **12/01** |       | **12/02** |   | **12/03**  |   | **12/04** |       | **12/05** |   | **12/06**  |   |
|---------------------------------------------------------|--------|-----------|------------|-----------|--------|------------|--------|-----------|------------|-----------|--------|------------|--------|
|                                                    |   |      |       |      |   |       |   |      |       |      |   |       |   |
| **Green                    Mountain Power Corporation** |   |      | **100.00** |      |   | **116.10** |   |      | **135.35** |      |   | **171.01** |   |   | **176.43** |   |   | **215.52** |   |
| **S                    & P 500**                    |   |      | **100.00** |      |   | **77.90**  |   |      | **100.24** |      |   | **111.15** |   |   | **116.61** |   |   | **135.03** |   |
| **EEI                    Investor-Owned Electrics**     |   |      | **100.00** |      |   | **85.27**  |   |      | **105.30** |      |   | **129.34** |   |   | **150.09** |   |   | **181.25** |   |

| **ITEM                  6. SELECTED FINANCIAL DATA**                            |   |     |     |     |   |     |   |     |     |     |   |
|---------------------------------------------------------------------------------|--------|----------|----------|----------|--------|----------|--------|----------|----------|----------|--------|
| **Results                  of Operations for the years ended December 31,**     |   |     |     |     |   |     |   |     |     |     |   |
|                                                                            |   | **2006** |     | **2005** |   | **2004** |   | **2003** |     | **2002** |   |
| In                  thousands, except per share data                            |   |     |     |     |   |     |   |     |     |     |   |
| Operating                  Revenues                                             |   | $        | 240,476  |     | $      | 245,860  |   | $        | 230,574  |     | $      | 280,470 |   | $ | 274,608 |   |
| Operating                  Expenses                                             |   |     | 224,355  |     |   | 229,779  |   |     | 215,096  |     |   | 265,164 |   |   | 259,528 |   |
| Operating                  Income                                               |   |     | 16,121   |     |   | 16,081   |   |     | 15,478   |     |   | 15,306 |   |   | 15,080 |   |
| Other                  Income                                                   |   |     |          |     |   |          |   |     |          |     |   |  |   |   |  |   |
| AFUDC                  - equity                                                 |   |     | 106      |     |   | 29       |   |     | 449      |     |   | 387 |   |   | 233 |   |
| Other                                                                           |   |     | 1,117    |     |   | 1,696    |   |     | 1,638    |     |   | 1,692 |   |   | 2,252 |   |
| Total                  other income                                             |   |     | 1,223    |     |   | 1,725    |   |     | 2,087    |     |   | 2,079 |   |   | 2,485 |   |
| Interest                  Charges                                               |   |     |          |     |   |          |   |     |          |     |   |  |   |   |  |   |
| AFUDC                  - borrowed                                               |   |     | (48      | )        |   | (18      | )      |     | (285     | )        |   | (267 | ) |   | (103 | ) |
| Other                                                                           |   |     | 7,461    |     |   | 6,778    |   |     | 6,791    |     |   | 7,324 |   |   | 6,273 |   |
| Total                  interest charges                                         |   |     | 7,413    |     |   | 6,760    |   |     | 6,506    |     |   | 7,057 |   |   | 6,170 |   |
| Net                  Income from continuing operations before                   |   |     | 9,931    |     |   | 11,046   |   |     | 11,059   |     |   | 10,328 |   |   | 11,395 |   |
| preferred                  dividends                                            |   |     |          |     |   |          |   |     |          |     |   |  |   |   |  |   |
| Net                  Income (Loss) from discontinued operations, including      |   |     |          |     |   |          |   |     |          |     |   |  |   |   |  |   |
| provisions                  for loss on disposal                                |   |     | 192      |     |   | 134      |   |     | 525      |     |   | 79 |   |   | 99 |   |
| Dividends                  on Preferred Stock                                   |   |     | -        |     |   | -        |   |     | -        |     |   | 3 |   |   | 96 |   |
| Net                  Income Applicable to Common Stock                          |   | $        | 10,123   |     | $      | 11,180   |   | $        | 11,584   |     | $      | 10,404 |   | $ | 11,398 |   |
| Common                  Stock Data                                              |   |     |          |     |   |          |   |     |          |     |   |  |   |   |  |   |
| Basic                  earnings per share-continuing operations                 |   | $        | 1.88     |     | $      | 2.12     |   | $        | 2.18     |     | $      | 2.08 |   | $ | 2.02 |   |
| Basic                  earnings per share-discontinued operations               |   | $        | 0.04     |     | $      | 0.03     |   | $        | 0.10     |     | $      | 0.01 |   | $ | 0.02 |   |
| Basic                  earnings per share                                       |   | $        | 1.92     |     | $      | 2.15     |   | $        | 2.28     |     | $      | 2.09 |   | $ | 2.04 |   |
| Diluted                  earnings per share from continuing operations          |   | $        | 1.85     |     | $      | 2.09     |   | $        | 2.10     |     | $      | 2.01 |   | $ | 1.96 |   |
| Diluted                  earnings (loss) per share from discontinued operations |   | $        | 0.04     |     | $      | 0.03     |   | $        | 0.10     |     | $      | 0.01 |   | $ | 0.02 |   |
| Diluted                  earnings per share                                     |   | $        | 1.89     |     | $      | 2.12     |   | $        | 2.20     |     | $      | 2.02 |   | $ | 1.98 |   |
| Cash                  dividends declared per share                              |   | $        | 1.12     |     | $      | 1.00     |   | $        | 0.88     |     | $      | 0.76 |   | $ | 0.60 |   |
| Weighted                  average shares outstanding-basic                      |   |     | 5,270    |     |   | 5,195    |   |     | 5,083    |     |   | 4,980 |   |   | 5,592 |   |
| Weighted                  average equivalent shares outstanding-diluted         |   |     | 5,348    |     |   | 5,284    |   |     | 5,254    |     |   | 5,140 |   |   | 5,756 |   |
|                                                                            |   |     |     |     |   |     |   |     |     |     |   |   |   |   |   |   |
| **Financial                  Condition as of December 31**                      |   |     |     |     |   |     |   |     |     |     |   |   |   |   |   |   |
|                                                                            |   |     | **2006** |     |   | **2005** |   |     | **2004** |     |   | **2003** |   |   | **2002** |   |
| In                  thousands                                                   |   |     |     |     |   |     |   |     |     |     |   |   |   |   |   |   |
| **Assets**                                                                      |   |     |     |     |   |          |   |     |          |     |   |  |   |   |  |   |
| Utility                  Plant, Net                                             |   | $        | 246,992  |     | $      | 236,911  |   | $        | 232,712  |     | $      | 228,862 |   | $ | 223,476 |   |
| Other                  Investments                                              |   |     | 37,262   |     |   | 20,663   |   |     | 18,959   |     |   | 13,706 |   |   | 21,552 |   |
| Current                  Assets                                                 |   |     | 44,256   |     |   | 64,312   |   |     | 44,809   |     |   | 31,688 |   |   | 31,432 |   |
| Deferred                  Charges                                               |   |     | 57,223   |     |   | 51,729   |   |     | 55,120   |     |   | 55,590 |   |   | 60,390 |   |
| Non-Utility                  Assets                                             |   |     | 229      |     |   | 653      |   |     | 755      |     |   | 1,105 |   |   | 995 |   |
| Total                  Assets                                                   |   | $        | 385,962  |     | $      | 374,268  |   | $        | 352,355  |     | $      | 330,951 |   | $ | 337,845 |   |
| **Capitalization                  and Liabilities**                             |   |     |     |     |   |          |   |     |          |     |   |  |   |   |  |   |
| Common                  Stock Equity                                            |   |     | 126,636  |     | $      | 117,374  |   | $        | 109,581  |     | $      | 99,915 |   | $ | 91,722 |   |
| Redeemable                  Cumulative Preferred Stock                          |   |     | -        |     |   | -        |   |     | -        |     |   | - |   |   | 55 |   |
| Long-Term                  Debt, Less Current Maturities                        |   |     | 109,000  |     |   | 79,000   |   |     | 93,000   |     |   | 93,000 |   |   | 93,000 |   |
| Capital                  Lease Obligation                                       |   |     | 3,562    |     |   | 3,944    |   |     | 4,493    |     |   | 4,963 |   |   | 5,287 |   |
| Current                  Liabilities                                            |   |     | 31,219   |     |   | 63,156   |   |     | 33,815   |     |   | 22,715 |   |   | 38,491 |   |
| Deferred                  Credits and Other                                     |   |     | 113,004  |     |   | 108,420  |   |     | 109,295  |     |   | 108,281 |   |   | 107,349 |   |
| Non-Utility                  Liabilities                                        |   |     | 2,541    |     |   | 2,374    |   |     | 2,171    |     |   | 2,077 |   |   | 1,941 |   |
| Total                  Capitalization and Liabilities                           |   | $        | 385,962  |     | $      | 374,268  |   | $        | 352,355  |     | $      | 330,951 |   | $ | 337,845 |   |

**ITEM        7.**
**MANAGEMENT’S        DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF        OPERATIONS**
**        ("MD and A")**

| ·   | regulatory                and judicial decisions or legislation and other regulatory                risks |
|--------------------|-----------------------------------------------------------------------------------------------------------|
| ·   | energy                supply and demand, outages and other power supply volume                risks |
|--------------------|-----------------------------------------------------------------------------------------------------|
| ·   | power                supply price risks |
|--------------------|-----------------------------------------|
| ·   | customer                concentration risks |
|--------------------|---------------------------------------------|
| ·   | pension                and postretirement health care risks |
|--------------------|-------------------------------------------------------------|
| ·   | customer                service quality |
|--------------------|-----------------------------------------|
| ·   | changes                in regional market and transmission rules |
|--------------------|------------------------------------------------------------------|
| ·   | contingent                obligations or rights contained in contractual                commitments |
|--------------------|-----------------------------------------------------------------------------------------------------|
| ·   | credit                risks, including availability, terms, and use of capital and counterparty                credit quality |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------|
| ·   | general                economic and business environment |
|--------------------|----------------------------------------------------------|
| ·   | changes                in technology |
|--------------------|--------------------------------------|
| ·   | nuclear                and environmental issues |
|--------------------|-------------------------------------------------|
| ·   | alternative                regulation and cost recovery (including stranded                costs) |
|--------------------|---------------------------------------------------------------------------------------------------|
| ·   | weather |
|--------------------|---------|
| ·   | customer                growth and changes in customer demands,                and |
|--------------------|------------------------------------------------------------------------------------|
| ·   | acts                of terrorism |
|--------------------|----------------------------------|

**Executive        Overview**

**MERGERS        AND ACQUISITIONS**

**OTHER**

| ·   | factors                that affect our business; |
|--------------------|--------------------------------------------------|
| ·   | our                earnings and costs in the periods presented and why they changed                between                periods; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|
| ·   | the                source of our earnings; |
|--------------------|--------------------------------------------|
| ·   | our                expenditures for capital projects and what we expect they will be                in the                future; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|
| ·   | where                we expect to get cash for future capital expenditures; and |
|--------------------|---------------------------------------------------------------------------------|
| ·   | how                all of the above affect our overall financial                condition. |
|--------------------|--------------------------------------------------------------------------------------------|

**Earnings        Summary**

| **Earnings                    Summary**                                                                             |   | **For                    the Years Ended** |   |
|---------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                                |   | **2006**                                   |   | **2005** |   | **2004** |   |
| Consolidated                    diluted earnings per share of common stock                                          |   | $                                          | 1.89   |   | $ | 2.12 |   | $ | 2.20 |   |
| Consolidated                    diluted earnings per share of common stock-continuing                    operations |   | $                                          | 1.85   |   | $ | 2.09 |   | $ | 2.10 |   |
| Consolidated                    return on average common equity                                                     |   |                                       | 8.35   | % |   | 9.85 | % |   | 11.06 | % |

**Discussion            for Year Ending 2006 compared to 2005**

|                                                              |       | ** Green                      Mountain Power Consolidated Earnings** | ** ** |
|-------------------------------------------------------------------|------------|---------------------------------------------------------------------------|------------|
| ** **                                                        | ** ** | ** Full                      Year Comparative Results**              | ** ** |
| ** **                                                        | ** ** | ** 2006,                      2005 and 2004**                        | ** ** |
| ** **                                                        | ** ** | **Income                      (in thousands)**                            | ** ** | **Diluted                      Earnings per Share** |
|                                                              |       | **2006**                                                                  |       | **2005** |   | **2004** |   | **2006** |   | **2005** |   | **2004** |   |
| Net                      Income                                   |       | $                                                                         | 10,123     |   | $ | 11,180 |   | $ | 11,584 |   |   | 1.89 |   |   | 2.12 |   |   | 2.20 |   |
| Impact                      of Earnings Cap                       |       | $                                                                         | 5,732      |   | $ | 582 |   | $ | 0 |   |   |  |   |   |   |   |   |  |   |
| Less:                      Tax Effect                             |       |                                                                      | (2,293     | ) |   | (233 | ) |   | 0 |   |   |   |   |   |   |   |   |  |   |
| Impact                      of Earnings Cap, net of taxes         |       |                                                                      | 3,439      |   |   | 349 |   |   | 0 |   |   | 0.64 |   |   | 0.07 |   |   | 0.00 |   |
| Merger                      Costs                                 |       | $                                                                         | 1,621      |   | $ | 0 |   | $ | 0 |   |   | 0.30 |   |   | 0.00 |   |   | 0.00 |   |
|                                                              |       |                                                                      |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted                      Avg Shares-Fully Diluted (in thous) |       |                                                                      |       |   |   |   |   | 5,348 |   |   | 5,285 |   |   | 5,254 |   |

**Discussion            for Year Ending 2005 compared to 2004**

**Critical            Accounting Policies**

**Regulatory            Accounting**

|                                                                   |   |                                       |   |     |   | **Amortizable**                              |   |
|------------------------------------------------------------------------|--------|--------------------------------------------|--------|----------|--------|----------------------------------------------|--------|
| **Regulatory                        assets and liabilities**           |   | **Total**                                  |   |     |   | **2006                        balances**     |   |
|                                                                   |   | **At                        December 31,** |   |     |   | **included                        in rates** |   |
|                                                                   |   | **2006**                                   |   | **2005** |   | **in                        2007**           |   |
| Regulatory                        assets:                              |   | (in                        thousands)      |   |
|                                                                   |   |                                       |   |     |   |                                         |   |
| Demand-side                        management programs                 |   | $                                          | 4,376  |     | $      | 5,835                                        |   | $ | 4,376 |   |
| Purchased                        power costs                           |   |                                       | 3,683  |     |   | 1,812                                        |   |   | 3,683 |   |
| Pine                        Street barge canal                         |   |                                       | 12,070 |     |   | 12,861                                       |   |   | 6,732 |   |
| Derivative                        liability regulatory assets          |   |                                       | 22,526 |     |   | 30,135                                       |   |   | - |   |
| Pension                        funding regulatory asset                |   |                                       | 11,789 |     |   | -                                            |   |   | - |   |
| Other                        regulatory assets                         |   |                                       | 5,954  |     |   | 5,809                                        |   |   | 3,559 |   |
| Total                        regulatory assets                         |   |                                       | 60,398 |     |   | 56,452                                       |   |   | 18,350 |   |
| Regulatory                        liabilities:                         |   |                                       |   |     |   |                                         |   |   |   |   |
|                                                                   |   |                                       |   |     |   |                                         |   |   |   |   |
| Accumulated                        cost of removal                     |   |                                       | 21,494 |     |   | 21,105                                       |   |   | 21,494 |   |
| Deferred                        regulatory revenues                    |   |                                       | 6,260  |     |   | 582                                          |   |   | 582 |   |
| Derivative                        asset regulatory liability           |   |                                       | 468    |     |   | 15,342                                       |   |   | - |   |
| Other                        regulatory liabilities                    |   |                                       | 7,738  |     |   | 6,485                                        |   |   | 5,855 |   |
| Other                        deferred liablilities                     |   |                                       | 5,759  |     |   | 7,737                                        |   |   | 3,062 |   |
| Total                        regulatory liabilities                    |   |                                       | 41,719 |     |   | 51,251                                       |   |   | 30,993 |   |
| Regulatory                        assets net of regulatory liabilities |   | $                                          | 18,679 |     | $      | 5,201                                        |   | $ | (12,643 | ) |

|                                                                        |   |                             |   |                               |   | **SFAS                  158**       |   |                             |    |
|-----------------------------------------------------------------------------|--------|----------------------------------|--------|------------------------------------|--------|-------------------------------------|--------|----------------------------------|---------|
|                                                                        |   | **December                  31** |   | **2006                  Activity** |   | **and                  regulatory** |   | **December                  31** |    |
| in                  thousands                                               |   | **2005**                         |   |                               |   | **reclassification**                |   | **2006**                         |    |
| Prepaid                  pension                                            |   | $                                | 2,170  |                               | $      | 1,623                               |   | $                                | (3,793  | ) | $ | - |   |
| Regulatory                  asset FAS 158 pension funding obligation offset |   |                             | -      |                               |   | -                                   |   |                             | 11,789  |   |   | 11,789 |   |
| Deferred                  tax asset - federal                               |   |                             | 3,271  |                               |   | (1,749                              | )      |                             | 2,459   |   |   | 3,982 |   |
| Deferred                  tax asset - state                                 |   |                             | 868    |                               |   | (464                                | )      |                             | 653     |   |   | 1,057 |   |
| Accumulated                  other comprehensive income                     |   |                             | 3,263  |                               |   | (3,074                              | )      |                             | (188    | ) |   | - |   |
| Minimum                  pension funding liability                          |   |                             | (5,486 | )                                  |   | 5,486                               |   |                             | -       |   |   | - |   |
| Total                  pension funding obligation                           |   |                             | -      |                               |   | (317                                | )      |                             | (12,116 | ) |   | (12,433 | ) |
| SERP                  liability                                             |   |                             | (3,897 | )                                  |   | (202                                | )      |                             | 4,099   |   |   | - |   |
| Post                  retirement health care liability                      |   |                             | (832   | )                                  |   | 493                                 |   |                             | 338     |   |   | - |   |
| Deferred                  tax liability - federal                           |   |                             | (695   | )                                  |   | (520                                | )      |                             | (2,561  | ) |   | (3,776 | ) |
| Deferred                  tax liability - state                             |   |                             | (184   | )                                  |   | (138                                | )      |                             | (680    | ) |   | (1,002 | ) |

**Derivatives**

**Revenue        Recognition**

**Defined        Benefit Plans**

**Contingencies**

**Results        of Operations**

**Operating        Revenues and MWh Sales **

|                                                        |       | **For                    the Years ended December 31,** | ** ** |
|-------------------------------------------------------------|------------|---------------------------------------------------------|------------|
| ** **                                                  | ** ** | **2006**                                                |       | **2005** |   | **2004** |   |
|                                                        |       | (dollars                    in thousands)               |       |
| Operating                    Revenues                       |       |                                                    |       |   |   |   |   |
| Retail*                                                     |       | $                                                       | 205,851    |   | $ | 208,494 |   | $ | 200,241 |   |
| Regulatory                    Revenue (Deferred) Recognized |       |                                                    | (5,678     | ) |   | (582 | ) |   | 2,977 |   |
| Net                    Retail Revenue                       |       | $                                                       | 200,173    |   | $ | 207,912 |   | $ | 203,218 |   |
| Sales                    for Resale                         |       |                                                    | 26,642     |   |   | 28,298 |   |   | 22,652 |   |
| Other                    Revenues                           |       |                                                    | 13,661     |   |   | 9,650 |   |   | 4,704 |   |
| Total                    Operating Revenues                 |       | $                                                       | 240,476    |   | $ | 245,860 |   | $ | 230,574 |   |
|                                                        |       |                                                    |            |   |   |  |   |   |  |   |
| MWH                    Sales-Retail                         |       |                                                    | 1,962,924  |   |   | 2,008,250 |   |   | 1,969,925 |   |
| MWH                    Sales for Resale                     |       |                                                    | 442,777    |   |   | 368,317 |   |   | 411,769 |   |
| Total                    MWH Sales                          |       |                                                    | 2,405,701  |   |   | 2,376,567 |   |   | 2,381,694 |   |
|                                                        |       |                                                    |       |   |   |   |   |   |   |   |

| **Average                      Number of Customers** |   |                                                      |   |     |   |     |   |
|------------------------------------------------------|--------|-----------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                 |   | **For                      the Years ended December 31,** |   |
|                                                 |   | **2006**                                                  |   | **2005** |   | **2004** |   |
| Residential                                          |   |                                                      | 77,862 |     |   | 76,481   |   |   | 75,507 |   |
| Commercial                      and Industrial       |   |                                                      | 13,978 |     |   | 13,779   |   |   | 13,539 |   |
| Other                                                |   |                                                      | 62     |     |   | 60       |   |   | 62 |   |
| Total                      Number of Customers       |   |                                                      | 91,902 |     |   | 90,320   |   |   | 89,108 |   |

| **Change                      in Operating Revenues**          |   | **2005                      to**        |   | **2004                      to** |   | **2003                      to** |   |
|----------------------------------------------------------------|--------|-----------------------------------------|--------|----------------------------------|--------|----------------------------------|--------|
|                                                           |   | **2006**                                |   | **2005**                         |   | **2004**                         |   |
|                                                           |   | **(In                      thousands)** |   |
| Retail                      Rates                              |   | $                                       | 2,110  |                             | $      | 4,285                            |   | $ | (1,027 | ) |
| Regulatory                      revenue (deferred) recognized  |   |                                    | (5,096 | )                                |   | (3,559                           | )      |   | 1,857 |   |
| Retail                      Rates, net of regulatory revenue   |   |                                    | (2,986 | )                                |   | 726                              |   |   | 830 |   |
| Retail                      Sales Volume                       |   |                                    | (4,753 | )                                |   | 3,968                            |   |   | 3,671 |   |
| Resales                      and Other Revenues                |   |                                    | 2,355  |                             |   | 10,592                           |   |   | (54,397 | ) |
| Increase                      (Decrease) in Operating Revenues |   | $                                       | (5,384 | )                                | $      | 15,286                           |   | $ | (49,896 | ) |

| ·   | Decreased                      retail residential revenues of $1.3 million, or 1.7 percent,                      arising from                      a 2.7 percent decrease in sales of electricity and a 0.9 percent                      retail                      rate increase effective January 1, 2006;                      and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      retail small commercial and industrial ("C&I") revenues of $300,000,                      or 0.4 percent, arising from a 1.5 percent decrease in sales                      of                      electricity and a 0.9 percent retail rate increase effective                      January 1,                      2006; and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Decreased                      retail large C&I revenues of $1.4 million or 2.6 percent, arising from                      a 2.7 percent decrease in sales of electricity and a 0.9 percent                      retail                      rate increase effective January 1, 2006. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      retail residential revenues of $3.5 million, or 4.7 percent,                      arising from                      a 3.0 percent increase in sales of electricity and a 1.9 percent                      retail                      rate increase effective January 1, 2005;                      and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      retail small commercial and industrial ("C&I") revenues of $3.4                      million, or 4.6 percent, arising from a 2.7 percent increase                      in sales of                      electricity and a 1.9 percent retail rate increase effective                      January 1,                      2005; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      retail large C&I revenues of $1.2 million or 2.4 percent, arising from                      a 0.3 percent increase in sales of electricity and a 1.9 percent                      retail                      rate increase effective January 1, 2005. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Power              Supply Expenses - **

| ·   | Market                      purchases declined by approximately $20 million on reduced                      purchases of                      192,000 megawatt hours in 2006 compared to 2005. Other bilateral                      contracts                      declined by $2.7 million on reduced purchases of 19,000 megawatt                      hours. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Purchases                      from Morgan Stanley decreased by $2.4 million reflecting the                      absence of a                      scheduled outage at the ENVY nuclear power plant in 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      purchases from VYNPC totaled $7.9 million on increased volumes                      of 148,000                      megawatt hours in 2006 compared to 2005, and resulted from                      a temporary                      increase in entitlements during a process (“uprate”) to increase the                      output of the ENVY nuclear power plant and because 2006 had                      no scheduled                      outage for the plant which operates under an eighteen month                      refueling                      schedule. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      entitlements under the VJO Contract with Hydro-Quebec amounted                      to 103,000                      megawatt hours at a cost of $3.9 million, and resulted from                      the VJO’s                      exercise of an option to increase the load factor under the                      contract. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Increased                      precipitation was principally responsible for increased purchases                      from                      Independent Power Producers (“IPPs”) of $3.2 million for 20,000 additional                      megawatt hours. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Hydroelectric                      production was up substantially as the Company’s generation costs                      increased by only $402,000 on 44,000 additional megawatt hours                      of                      production. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | A                      $2.3 million increase in the cost of market purchases caused                      primarily by                      higher wholesale market prices ($1.4 million) and a reduction                      of credits                      for the auction of transmission rights allocated by ISO-NE                      ($840,000); |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | A                      $2.3 million increase in power supply expenses under agreements                      with Hydro                      Quebec caused by increased megawatt hour purchases of                      electricity; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | A                      $1.5 million increase in purchases from Morgan Stanley caused                      primarily by                      an increase in contract prices; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | A                      $654,000 increase in the costs of electricity supplied by independent                      power producers caused by production increases due to higher                      levels of                      precipitation. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Other              Operating Expenses - **

**Transmission              Expenses **

**Maintenance              Expenses **
*-              *

**Depreciation              and Amortization - **

**Taxes              other than income - **

**Income              Taxes - **

**Total              Other Income (net of other deductions) **

**Interest              Expense - **

**ENVIRONMENTAL              MATTERS**

**Pine              Street Barge Canal Superfund Site**

**RATES**

| ·   | A                      power supply cost adjustment mechanism under which the Company                      will                      recover or credit to customers, on a quarterly basis, 90 percent                      of power                      supply costs that are $300,000 (per quarter) higher or lower                      than power                      supply costs included in rates. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | An                      allowed rate of return on equity (“ROE”) of 10.25 percent for 2007. The                      allowed ROE adjusts annually, up or down, in the amount of                      one-half the                      change in the ten-year Treasury bond                      rate. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | An                      annual earnings sharing mechanism under which the Company has                      the                      opportunity to earn up to 75 basis points above its allowed                      ROE and to                      recover earning shortfalls in excess of 100 basis points below                      the allowed                      ROE. Under the plan, certain exclusions, commonly made in setting                      rates,                      are applied to determine the Company’s earnings and are expected to affect                      adversely the Company’s ability to earn its allowed rate of return on                      equity for core utility operations. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Base                      rates will be adjusted annually, based on the Company’s cost of service.                      Non-power supply cost increases are capped at no more than                      $1.25 million                      in 2008 and $1.5 million in 2009, exclusive of ROE adjustments                      and                      extraordinary costs in excess of $600,000 per year. Base rate                      adjustments                      must be approved by the VPSB. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                      VPSB retains the authority to investigate the Company’s rates at any time                      and to modify or terminate the plan. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Rates                      were set at levels that recover the Company’s VJO Contract costs,                      effectively ending the regulatory disallowances experienced                      by the Company                      from 1998 through 2000; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                      Company and customers shall share equally any premium above                      book value                      realized by the Company’s shareholders in any future merger, acquisition                      or asset sale, subject to an $8.0 million limit on the customers'                      share,                      adjusted for inflation; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                      Company's further investment in non-utility operations was                      restricted                      until new rates went into effect, which occurred in January                      2005. Although                      this restriction has expired, we have no plans to make material                      investments in non-utility operations. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**LIQUIDITY              AND CAPITAL RESOURCES**

|                                                               |   | **At                          December 31,** |   |
|--------------------------------------------------------------------|--------|----------------------------------------------|--------|
|                                                               |   | **2006**                                     |   | **2005** |   |
| (In                          thousands)                            |   |                                         |   |   |   |
| Cash                          and cash equivalents                 |   | $                                            | 2,031  |   | $ | 6,500 |   |
| Current                          assets                            |   | $                                            | 44,256 |   | $ | 64,312 |   |
| Less                          current liabilities                  |   |                                         | 31,219 |   |   | 63,156 |   |
| Net                          working capital                       |   | $                                            | 13,037 |   | $ | 1,156 |   |
|                                                               |   |                                         |   |   |   |   |   |
| Net                          cash provided by operating activities |   | $                                            | 18,142 |   | $ | 29,771 |   |

**Construction        and Investments **

|                                                                                                                                       | **Generation**             | **Transmission**           | **Distribution**            | **Other***                 | **Total**                   |
|--------------------------------------------------------------------------------------------------------------------------------------------|----------------------------|----------------------------|-----------------------------|----------------------------|-----------------------------|
| (In                    thousands)                                                                                                          |                       |                       |                        |                       |                        |
| Actual:                                                                                                                                    |                       |                       |                        |                       |                        |
| 2004                                                                                                                                       | $                    3,053 | $                    2,898 | $                    8,662  | $                    5,005 | $                    19,618 |
| 2005                                                                                                                                       | 2,060                      | 596                        | 8,541                       | 6,400                      | $                    17,597 |
| 2006                                                                                                                                       | $                    4,895 | $                    1,001 | $                    13,869 | $                    4,581 | $                    24,346 |
| Forecast:                                                                                                                                  |                       |                       |                        |                       |                        |
| 2007                                                                                                                                       | $                    6,232 | $                    4,345 | $                    11,368 | $                    3,702 | $                    25,647 |
|                                                                                                                                       |                       |                       |                        |                       |                        |
| *                    Other includes Pine Street Barge Canal net expenditures of $1.4                    million in                    2004 |
| $600,000                    in 2005, $1.4 million in 2006 and an estimated $1.1 million in                    2007.                        |

**Dividend        Policy -**

| **Period                  Reflecting****Dividend                  Change** | **New                  Annual****Dividend                  Rate** | **Annual****Payout                  Ratio** |
|----------------------------------------------------------------------------|-------------------------------------------------------------------|---------------------------------------------|
| 2006                  1st                  Quarter                         | 1.12                                                              | 60%                                         |
| 2005                  1st                  Quarter                         | 1.00                                                              | 47%                                         |
| 2004                  1st                  Quarter                         | .88                                                               | 42%                                         |
|                                                                       |                                                              |                                        |

**FINANCING        AND CAPITALIZATION**

**Credit        Facilities**

|                                  | **Moody's** | **Standard                  & Poor's** |
|---------------------------------------|-------------|--------------------------------------------|
| First                  mortgage bonds | Baa1        | BBB                                        |

**PERFORMANCE        ASSURANCE**

|                                                                                                                                                         |   | **Future                    Payments Contractually Due by Period** |      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|-----------|
| **At                    December 31, 2006**                                                                                                                  |   |                                                               |      |   |   | **2008                    and** |   | **2010                    and** |   | **After** |   |
|                                                                                                                                                         |   | **Total**                                                          |      | **2007** |   | **2009** |   | **2011** |   | **2011** |   |
|                                                                                                                                                         |   | (In                    thousands)                                  |      |
| Long-term                    debt                                                                                                                            |   | $                                                                  | 109,000   |   | $ | - |   | $ | - |   | $ | 6,000 |   | $ | 103,000 |   |
| Interest                    on long-term debt                                                                                                                |   |                                                               | 115,872   |   |   | 7,493 |   |   | 14,986 |   |   | 14,623 |   |   | 78,769 |   |
| Capital                    lease obligations                                                                                                                 |   |                                                               | 3,592     |   |   | 402 |   |   | 709 |   |   | 709 |   |   | 1,772 |   |
| Hydro-Quebec                    power supply contracts                                                                                                       |   |                                                               | 475,117   |   |   | 52,376 |   |   | 103,582 |   |   | 105,676 |   |   | 213,483 |   |
| JP                    Morgan contract                                                                                                                        |   |                                                               | 75,680    |   |   | 17,029 |   |   | 36,973 |   |   | 21,678 |   |   | - |   |
| Independent                    Power Producers                                                                                                               |   |                                                               | 120,610   |   |   | 17,145 |   |   | 31,332 |   |   | 29,619 |   |   | 42,514 |   |
| Stony                    Brook contract                                                                                                                      |   |                                                               | 23,573    |   |   | 3,858 |   |   | 7,844 |   |   | 7,878 |   |   | 3,994 |   |
| VYNPC                    PPA                                                                                                                                 |   |                                                               | 189,308   |   |   | 33,744 |   |   | 73,155 |   |   | 72,118 |   |   | 10,292 |   |
| Benefit                    plan contributions*                                                                                                               |   |                                                               | 39,366    |   |   | 3,366 |   |   | 7,150 |   |   | 7,250 |   |   | 21,600 |   |
| Deferred                    Compensation                                                                                                                     |   |                                                               | 13,136    |   |   | 1,029 |   |   | 2,850 |   |   | 2,546 |   |   | 6,711 |   |
| Transco                    capital contributions                                                                                                             |   |                                                               | 24,930    |   |   | 8,400 |   |   | 10,730 |   |   | 5,800 |   |   | - |   |
| Pine                    Street Barge Canal remediation, excluding recoveries                                                                                 |   |                                                               | 9,629     |   |   | 1,024 |   |   | 926 |   |   | 458 |   |   | 7,221 |   |
| Total                                                                                                                                                        |   | $                                                                  | 1,199,813 |   | $ | 145,865 |   | $ | 290,237 |   | $ | 274,354 |   | $ | 489,356 |   |
|                                                                                                                                                         |   |                                                               |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See                    the captions "Power Supply Expense" and "Power Contract Commitments"                    for                    additional information |   |
| about                    the Hydro-Quebec and JP Morgan power supply contracts                                                                               |   |
| *Benefit                    plan contributions and Deferred Compensation payments are estimated                    through 2016                              |   |

**Off-Balance        Sheet Arrangements and Other Contractual Obligations - **

**Effects        of Inflation **

**ITEM        7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET        RISK**

**Power        Supply Risks.**

**Power        Contract Commitments **

|                              | **2006** | **2006**  | **2005** | **2005**  | **2004** | **2004**  | **Contract** |
|-----------------------------------|----------|-----------|----------|-----------|----------|-----------|--------------|
|                              | **MWh**  | **$/MWh** | **MWh**  | **$/MWh** | **MWh**  | **$/MWh** | **Expires**  |
| VJO                    Contract   | 784,098  | $65.38    | 680,984  | $69.61    | 605,718  | $74.47    | 2015         |
| VYNPC                    Contract | 965,080  | $40.15    | 816,989  | $39.67    | 764,010  | $43.63    | 2012         |

**JP        Morgan Contract**

**Power        Supply Price Risk - **

**Power        Supply and Other Derivatives - **

| **Commodity                    Price Risk** |       | **At                    December 31, 2006** | ** ** |
|---------------------------------------------|------------|---------------------------------------------|------------|
| ** **                                  | ** ** | **Fair                    Value**           | ** ** | **Market                    Risk** |   |
|                                        |       | (in                    thousands)           |       |
| Interest                    rate swap       |       | $                                           | 193        |   | $ | 19 |   |
| Power                    supply swaps       |       |                                        | (1,918     | ) | $ | (654 | ) |
| 9701                    agreement           |       |                                        | (20,608    | ) |   | (3,193 | ) |
| Forward                    sale contracts   |       |                                        | 275        |   |   | 116 |   |
|                                        |       | $                                           | (22,058    | ) | $ | (3,712 | ) |

|                                    | **Option                  Value** | **Risk                  Free**     | **Price**      | **Average**                        | **Contract** |
|-----------------------------------------|-----------------------------------|------------------------------------|----------------|------------------------------------|--------------|
|                                    | **Model**                         | **Interest                  Rate** | **Volatility** | **Forward                  Price** | **Expires**  |
| Interest                  rate swap     | Deterministic                     | n/a                                | n/a            | n/a                                | 2007         |
| 9701                  agreement         | Black-Scholes                     | 4.4%                               | 29%-10%        | $93                                | 2015         |
| Forward                  sale contracts | Deterministic                     | 5%                                 | n/a            | $70                                | 2007         |
| Power                  supply Swaps     | Deterministic                     | 4.8-5.1%                           | n/a            | $92                                | 2007-2009    |

**Other      Power Supply Risk - **

**Regulatory      Risk**

** **

**Customer      Concentration Risk**

**Pension      and Postretirement Health Care Risk - **

|                                                                        |   |                             |   |                               |   | **SFAS                  158**       |   |                             |    |
|-----------------------------------------------------------------------------|--------|----------------------------------|--------|------------------------------------|--------|-------------------------------------|--------|----------------------------------|---------|
|                                                                        |   | **December                  31** |   | **2006                  Activity** |   | **and                  regulatory** |   | **December                  31** |    |
| in                  thousands                                               |   | **2005**                         |   |                               |   | **reclassification**                |   | **2006**                         |    |
| Prepaid                  pension                                            |   | $                                | 2,170  |                               | $      | 1,623                               |   | $                                | (3,793  | ) | $ | - |   |
| Regulatory                  asset FAS 158 pension funding obligation offset |   |                             | -      |                               |   | -                                   |   |                             | 11,789  |   |   | 11,789 |   |
| Deferred                  tax asset - federal                               |   |                             | 3,271  |                               |   | (1,749                              | )      |                             | 2,459   |   |   | 3,982 |   |
| Deferred                  tax asset - state                                 |   |                             | 868    |                               |   | (464                                | )      |                             | 653     |   |   | 1,057 |   |
| Accumulated                  other comprehensive income                     |   |                             | 3,263  |                               |   | (3,074                              | )      |                             | (188    | ) |   | - |   |
| Minimum                  pension funding liability                          |   |                             | (5,486 | )                                  |   | 5,486                               |   |                             | -       |   |   | - |   |
| Total                  pension funding obligation                           |   |                             | -      |                               |   | (317                                | )      |                             | (12,116 | ) |   | (12,433 | ) |
| SERP                  liability                                             |   |                             | (3,897 | )                                  |   | (202                                | )      |                             | 4,099   |   |   | - |   |
| Post                  retirement health care liability                      |   |                             | (832   | )                                  |   | 493                                 |   |                             | 338     |   |   | - |   |
| Deferred                  tax liability - federal                           |   |                             | (695   | )                                  |   | (520                                | )      |                             | (2,561  | ) |   | (3,776 | ) |
| Deferred                  tax liability - state                             |   |                             | (184   | )                                  |   | (138                                | )      |                             | (680    | ) |   | (1,002 | ) |

**Customer      Service Quality **

**Weather**

----

**ITEM      8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**GREEN      MOUNTAIN POWER CORPORATION**

**INDEX      TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULES**

| **Financial                Statements**                                                                                                                                                   | **Page** |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| Consolidated                Statements of IncomeFor                the Years Ended December 31, 2006, 2005 and 2004                                                                       | 49       |
| Consolidated                Statements of Cash Flows for theYears                Ended December 31, 2006, 2005 and 2004                                                                   | 50       |
| Consolidated                Balance Sheets as of December 31, 2006 and 2005                                                                                                               | 51       |
| Consolidated                Statements of Changes in Stockholders’ EquityAnd                Comprehensive Income for the Years EndedDecember                31, 2006, 2005 and 2004 | 53       |
| Notes                to Consolidated Financial Statements                                                                                                                                 | 53       |
| Quarterly                Financial Information (Unaudited)                                                                                                                                | 80       |
| Reports                of Independent Registered Public Accounting Firm                                                                                                                   | 82       |

----

| **GREEN                MOUNTAIN POWER CORPORATION**                                                                   |   |                                                 |    |     |   |     |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|---------|----------|--------|----------|--------|
| **Consolidated                Statements of Income**                                                                  |   | **For                the Years Ended December 31**   |    |
|                                                                                                                  |   | **2006**                                             |    | **2005** |   | **2004** |   |
|                                                                                                                  |   | (In                thousands, except per share data) |    |
| **Revenues**                                                                                                          |   |                                                 |    |     |   |     |   |
| Retail                and other revenues                                                                              |   | $                                                    | 213,833 |     | $      | 217,562  |   | $ | 207,922 |   |
| Wholesale                revenues                                                                                     |   |                                                 | 26,643  |     |   | 28,298   |   |   | 22,652 |   |
| **Total                operating revenues**                                                                           |   |                                                 | 240,476 |     |   | 245,860  |   |   | 230,574 |   |
| Operating                expenses-Power Supply:                                                                       |   |                                                 |    |     |   |     |   |   |   |   |
| Purchases                from others                                                                                  |   |                                                 | 133,596 |     |   | 143,512  |   |   | 137,503 |   |
| Company-owned                generation                                                                               |   |                                                 | 6,880   |     |   | 6,477    |   |   | 6,516 |   |
| Other                operating                                                                                        |   |                                                 | 28,898  |     |   | 24,751   |   |   | 19,295 |   |
| Transmission                                                                                                          |   |                                                 | 16,299  |     |   | 16,453   |   |   | 15,656 |   |
| Maintenance                                                                                                           |   |                                                 | 10,972  |     |   | 11,247   |   |   | 9,746 |   |
| Depreciation                and amortization                                                                          |   |                                                 | 14,370  |     |   | 15,074   |   |   | 13,931 |   |
| Taxes                other than income                                                                                |   |                                                 | 6,841   |     |   | 6,589    |   |   | 6,687 |   |
| Income                taxes                                                                                           |   |                                                 | 6,499   |     |   | 5,676    |   |   | 5,762 |   |
| Total                operating expenses                                                                               |   |                                                 | 224,355 |     |   | 229,779  |   |   | 215,096 |   |
| **Operating                income**                                                                                   |   |                                                 | 16,121  |     |   | 16,081   |   |   | 15,478 |   |
|                                                                                                                  |   |                                                 |         |     |   |          |   |   |  |   |
| **Other                income**                                                                                       |   |                                                 |         |     |   |          |   |   |  |   |
| Equity                in earnings of affiliates and non-utility operations                                            |   |                                                 | 2,564   |     |   | 1,585    |   |   | 1,232 |   |
| Allowance                for equity funds used during construction                                                    |   |                                                 | 106     |     |   | 29       |   |   | 449 |   |
| Other                income                                                                                           |   |                                                 | 412     |     |   | 268      |   |   | 714 |   |
| Expense                of proposed merger                                                                             |   |                                                 | (1,621  | )        |   | -        |   |   | - |   |
| Other                deductions                                                                                       |   |                                                 | (238    | )        |   | (157     | )      |   | (308 | ) |
| Total                other income                                                                                     |   |                                                 | 1,223   |     |   | 1,725    |   |   | 2,087 |   |
|                                                                                                                  |   |                                                 |         |     |   |          |   |   |  |   |
| **Interest                charges**                                                                                   |   |                                                 |         |     |   |          |   |   |  |   |
| Long-term                debt                                                                                         |   |                                                 | 6,806   |     |   | 6,534    |   |   | 6,534 |   |
| Other                                                                                                                 |   |                                                 | 655     |     |   | 244      |   |   | 257 |   |
| Allowance                for borrowed funds used during construction                                                  |   |                                                 | (48     | )        |   | (18      | )      |   | (285 | ) |
| Total                interest charges                                                                                 |   |                                                 | 7,413   |     |   | 6,760    |   |   | 6,506 |   |
|                                                                                                                  |   |                                                 |         |     |   |          |   |   |  |   |
| **Income                from continuing operations**                                                                  |   |                                                 | 9,931   |     |   | 11,046   |   |   | 11,059 |   |
| Income                from discontinued operations, net                                                               |   |                                                 | 192     |     |   | 134      |   |   | 525 |   |
| **Net                income applicable to common stock**                                                              |   | $                                                    | 10,123  |     | $      | 11,180   |   | $ | 11,584 |   |
| **Earnings                per share**                                                                                 |   |                                                 |    |     |   |     |   |   |   |   |
| Basic                earnings per share-continuing operations                                                         |   | $                                                    | 1.88    |     | $      | 2.12     |   | $ | 2.18 |   |
| Basic                earnings per share-discontinued operations                                                       |   |                                                 | 0.04    |     |   | 0.03     |   |   | 0.10 |   |
| Basic                earnings per share                                                                               |   | $                                                    | 1.92    |     | $      | 2.15     |   | $ | 2.28 |   |
| Diluted                earnings per share-continuing operations                                                       |   | $                                                    | 1.85    |     | $      | 2.09     |   | $ | 2.10 |   |
| Diluted                earnings per share-discontinued operations                                                     |   |                                                 | 0.04    |     |   | 0.03     |   |   | 0.10 |   |
| Diluted                earnings per share                                                                             |   | $                                                    | 1.89    |     | $      | 2.12     |   | $ | 2.20 |   |
| Cash                dividends declared per share                                                                      |   | $                                                    | 1.12    |     | $      | 1.00     |   | $ | 0.88 |   |
| Weighted                average common shares outstanding-basic                                                       |   |                                                 | 5,270   |     |   | 5,195    |   |   | 5,083 |   |
| Weighted                average common shares outstanding-diluted                                                     |   |                                                 | 5,348   |     |   | 5,285    |   |   | 5,254 |   |
| The                accompanying notes are an integral part of these consolidated financial                statements. |   |                                                 |    |     |   |     |   |   |   |   |

----

| **GREEN                  MOUNTAIN POWER CORPORATION**                                                                     |       | **For                  the Years Ended** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|
| **Consolidated                  Statements of Cash Flows**                                                                | ** ** | **December                  31**         |       |
|                                                                                                                      |       | **2006**                                 |       | **2005** |   | **2004** |   |
| **Operating                  Activities:**                                                                                |       | (in                  thousands)          |       |
| Net                  income                                                                                               |       | $                                        | 10,123     |   | $ | 11,180 |   | $ | 11,584 |   |
| Less                  net income from discontinued operations                                                             |       |                                     | 192        |   |   | 134 |   |   | 525 |   |
| Income                  from continuing operations                                                                        |       |                                     | 9,931      |   |   | 11,046 |   |   | 11,059 |   |
| Adjustments                  to reconcile net income to net cash                                                          |       |                                     |       |   |   |   |   |   |   |   |
| provided                  by operating activities:                                                                        |       |                                     |       |   |   |   |   |   |   |   |
| Depreciation                  and amortization                                                                            |       |                                     | 14,370     |   |   | 15,074 |   |   | 13,931 |   |
| Dividends                  from associated companies                                                                      |       |                                     | 1,017      |   |   | 1,273 |   |   | 863 |   |
| Equity                  in undistributed earnings of associated companies                                                 |       |                                     | (2,268     | ) |   | (1,318 | ) |   | (880 | ) |
| Allowance                  for funds used during construction                                                             |       |                                     | (154       | ) |   | (47 | ) |   | (733 | ) |
| Amortization                  of deferred purchased power costs                                                           |       |                                     | 2,896      |   |   | 2,581 |   |   | 318 |   |
| Deferred                  income tax expense, net of investment tax credit                  amortization                  |       |                                     | (1,411     | ) |   | (2,563 | ) |   | 3,699 |   |
| Deferred                  purchased power costs                                                                           |       |                                     | (4,607     | ) |   | (2,023 | ) |   | (667 | ) |
| Deferred                  regulatory revenues                                                                             |       |                                     | 5,678      |   |   | 2,778 |   |   | (2,970 | ) |
| Environmental                  and conservation deferrals, net                                                            |       |                                     | (1,109     | ) |   | (312 | ) |   | (1,041 | ) |
| Gain                  on sale of property                                                                                 |       |                                     | -          |   |   | - |   |   | (402 | ) |
| Share-based                  compensation                                                                                 |       |                                     | 1,816      |   |   | 1,354 |   |   | 1,244 |   |
| Changes                  in:                                                                                              |       |                                     |       |   |   |   |   |   |   |   |
| Accounts                  receivable and accrued utility revenues                                                         |       |                                     | 1,562      |   |   | (1,705 | ) |   | (1,120 | ) |
| Prepayments,                  fuel and other current assets                                                               |       |                                     | (3,239     | ) |   | (950 | ) |   | (418 | ) |
| Accounts                  payable and other current liabilities                                                           |       |                                     | 804        |   |   | 470 |   |   | 1,567 |   |
| Accrued                  income taxes payable and receivable                                                              |       |                                     | (5,367     | ) |   | 6,031 |   |   | (2,069 | ) |
| Other                                                                                                                     |       |                                     | (1,968     | ) |   | (2,255 | ) |   | 1,010 |   |
| Net                  cash provided by continuing operations                                                               |       |                                     | 17,950     |   |   | 29,434 |   |   | 23,391 |   |
| Operating                  cash flows from discontinued operations                                                        |       |                                     | 192        |   |   | 337 |   |   | 525 |   |
| Net                  cash provided by operating activities                                                                |       |                                     | 18,142     |   |   | 29,771 |   |   | 23,916 |   |
|                                                                                                                      |       |                                     |       |   |   |   |   |   |   |   |
| **Investing                  Activities:**                                                                                |       |                                     |       |   |   |   |   |   |   |   |
| Construction                  expenditures                                                                                |       |                                     | (18,464    | ) |   | (16,978 | ) |   | (18,577 | ) |
| Restriction                  of cash for renewable energy investments                                                     |       |                                     | 1,024      |   |   | (973 | ) |   | (354 | ) |
| Proceeds                  from sale of property                                                                           |       |                                     | -          |   |   | - |   |   | 648 |   |
| Investment                  in associated companies                                                                       |       |                                     | (17,083    | ) |   | - |   |   | (4,579 | ) |
| Distributions                  from associated companies                                                                  |       |                                     | 646        |   |   | 189 |   |   | 314 |   |
| Investment                  in nonutility property                                                                        |       |                                     | (228       | ) |   | (210 | ) |   | (338 | ) |
| Net                  cash used in investing activities                                                                    |       |                                     | (34,105    | ) |   | (17,972 | ) |   | (22,886 | ) |
| **Financing                  Activities:**                                                                                |       |                                     |       |   |   |   |   |   |   |   |
| Proceeds                  from bond issuance                                                                              |       |                                     | 30,000     |   |   | - |   |   | - |   |
| Payments                  on capital lease                                                                                |       |                                     | (382       | ) |   | (187 | ) |   | - |   |
| Issuance                  of common stock                                                                                 |       |                                     | 1,788      |   |   | 1,373 |   |   | 1,885 |   |
| Reduction                  in long-term debt and term loan                                                                |       |                                     | (14,000    | ) |   | - |   |   | - |   |
| Short-term                  debt                                                                                          |       |                                     | -          |   |   | (3,000 | ) |   | 2,500 |   |
| Cash                  dividends                                                                                           |       |                                     | (5,912     | ) |   | (5,205 | ) |   | (4,481 | ) |
|                                                                                                                      |       |                                     |       |   |   |   |   |   |   |   |
| Net                  cash used in financing activities                                                                    |       |                                     | 11,494     |   |   | (7,019 | ) |   | (96 | ) |
| Net                  increase (decrease) in cash and cash equivalents                                                     |       |                                     | (4,469     | ) |   | 4,780 |   |   | 934 |   |
|                                                                                                                      |       |                                     |       |   |   |   |   |   |   |   |
| Cash                  and cash equivalents at beginning of period                                                         |       |                                     | 6,500      |   |   | 1,720 |   |   | 786 |   |
|                                                                                                                      |       |                                     |       |   |   |   |   |   |   |   |
| **Cash                  and cash equivalents at end of period**                                                           |       | $                                        | 2,031      |   | $ | 6,500 |   | $ | 1,720 |   |
|                                                                                                                      |       |                                     |       |   |   |   |   |   |   |   |
| **Supplemental                  Disclosure of Cash Flow Information:**                                                    |       |                                     |       |   |   |   |   |   |   |   |
| Cash                  paid for:                                                                                           |       |                                     |       |   |   |   |   |   |   |   |
| Interest                                                                                                                  |       | $                                        | 6,599      |   | $ | 6,700 |   | $ | 6,691 |   |
| Income                  taxes                                                                                             |       |                                     | 10,211     |   |   | 2,221 |   |   | 3,043 |   |
| **Non-cash                  construction additions**                                                                      |       |                                     | 5,119      |   |   | 1,229 |   |   | 1,563 |   |
| The                  accompanying notes are an integral part of these consolidated financial                  statements. |       |                                     |       |   |   |   |   |   |   |   |

----

| **GREEN                MOUNTAIN POWER CORPORATION**                                                                   |   |                               |    |     |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|------------------------------------|---------|----------|--------|
| **Consolidated                Balance Sheets**                                                                        |   |                               |    |     |   |
|                                                                                                                  |   | **At                December 31,** |    |
|                                                                                                                  |   | **2006**                           |    | **2005** |   |
| **ASSETS**                                                                                                            |   | (In                thousands)      |    |
| **Utility                plant**                                                                                      |   |                               |    |     |   |
| Utility                plant, at original cost                                                                        |   | $                                  | 362,970 |     | $      | 347,947 |   |
| Less                accumulated depreciation                                                                          |   |                               | 127,704 |     |   | 122,924 |   |
| Utility                plant, net of accumulated depreciation                                                         |   |                               | 235,266 |     |   | 225,023 |   |
| Property                under capital lease                                                                           |   |                               | 4,060   |     |   | 4,369 |   |
| Construction                work in progress                                                                          |   |                               | 7,666   |     |   | 7,519 |   |
| Total                utility plant, net                                                                               |   |                               | 246,992 |     |   | 236,911 |   |
| **Other                investments**                                                                                  |   |                               |         |     |   |  |   |
| Associated                companies, at equity                                                                        |   |                               | 27,768  |     |   | 10,036 |   |
| Other                investments                                                                                      |   |                               | 9,494   |     |   | 10,627 |   |
| Total                other investments                                                                                |   |                               | 37,262  |     |   | 20,663 |   |
| **Current                assets**                                                                                     |   |                               |         |     |   |  |   |
| Cash                and cash equivalents                                                                              |   |                               | 2,031   |     |   | 6,500 |   |
| Accounts                receivable, less allowance for                                                                |   |                               |         |     |   |  |   |
| doubtful                accounts of $401 and $484                                                                     |   |                               | 17,640  |     |   | 19,594 |   |
| Accrued                utility revenues                                                                               |   |                               | 7,683   |     |   | 7,291 |   |
| Fuel,                materials and supplies, average cost                                                             |   |                               | 6,690   |     |   | 6,360 |   |
| Power                supply derivative asset                                                                          |   |                               | 468     |     |   | 15,342 |   |
| Power                supply regulatory asset                                                                          |   |                               | 4,213   |     |   | 7,791 |   |
| Prepayments                and other current assets                                                                   |   |                               | 4,344   |     |   | 1,434 |   |
| Income                tax receivable                                                                                  |   |                               | 1,187   |     |   | - |   |
| Total                current assets                                                                                   |   |                               | 44,256  |     |   | 64,312 |   |
| **Deferred                charges**                                                                                   |   |                               |         |     |   |  |   |
| Demand                side management programs                                                                        |   |                               | 4,376   |     |   | 5,835 |   |
| Purchased                power costs                                                                                  |   |                               | 3,683   |     |   | 1,812 |   |
| Pine                Street Barge Canal                                                                                |   |                               | 12,070  |     |   | 12,861 |   |
| Power                supply regulatory asset                                                                          |   |                               | 18,313  |     |   | 22,344 |   |
| Pension                funding regulatory asset                                                                       |   |                               | 11,789  |     |   | - |   |
| Other                regulatory assets                                                                                |   |                               | 5,954   |     |   | 5,809 |   |
| Other                deferred charges                                                                                 |   |                               | 1,038   |     |   | 3,068 |   |
| Total                deferred charges                                                                                 |   |                               | 57,223  |     |   | 51,729 |   |
| **Non-utility**                                                                                                       |   |                               |         |     |   |  |   |
|                                                                                                                  |   |                               |    |     |   |   |   |
| Property                and equipment                                                                                 |   |                               | -       |     |   | 246 |   |
| Other                assets                                                                                           |   |                               | 229     |     |   | 407 |   |
| Total                non-utility assets                                                                               |   |                               | 229     |     |   | 653 |   |
| **Total                assets**                                                                                       |   | $                                  | 385,962 |     | $      | 374,268 |   |
|                                                                                                                  |   |                               |    |     |   |   |   |
| The                accompanying notes are an integral part of these consolidated financial                statements. |   |                               |    |     |   |   |   |

----

| **GREEN                MOUNTAIN POWER CORPORATION**                                                                   |   |                                            |    |     |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------|----------|--------|
| **Consolidated                Balance Sheets**                                                                        |   |                                            |    |     |   |
|                                                                                                                  |   | **At                December 31,**              |    |
|                                                                                                                  |   | **2006**                                        |    | **2005** |   |
| **CAPITALIZATION                AND LIABILITIES**                                                                     |   | (In                thousands except share data) |    |
| **Capitalization**                                                                                                    |   |                                            |    |     |   |
| Common                stock, $3.33 1/3 par value,                                                                     |   |                                            |    |     |   |
| authorized                10,000,000 shares (issued                                                                   |   |                                            |    |     |   |
| 6,131,489                and 6,060,962)                                                                               |   | $                                               | 20,438  |     | $      | 20,203 |   |
| Additional                paid-in capital                                                                             |   |                                            | 82,824  |     |   | 81,271 |   |
| Retained                earnings                                                                                      |   |                                            | 40,075  |     |   | 35,864 |   |
| Accumulated                other comprehensive income                                                                 |   |                                            | -       |     |   | (3,263 | ) |
| Treasury                stock, at cost (827,639 shares)                                                               |   |                                            | (16,701 | )        |   | (16,701 | ) |
| Total                common stock equity                                                                              |   |                                            | 126,636 |     |   | 117,374 |   |
| Long-term                debt, less current maturities                                                                |   |                                            | 109,000 |     |   | 79,000 |   |
| Total                capitalization                                                                                   |   |                                            | 235,636 |     |   | 196,374 |   |
| **Capital                lease obligation**                                                                           |   |                                            | 3,562   |     |   | 3,944 |   |
| **Current                liabilities**                                                                                |   |                                            |         |     |   |  |   |
| Current                portion of long term debt                                                                      |   |                                            | -       |     |   | 14,000 |   |
| Accounts                payable, trade and accrued liabilities                                                        |   |                                            | 18,575  |     |   | 14,196 |   |
| Accounts                payable to associated companies                                                               |   |                                            | 1,338   |     |   | 1,483 |   |
| Accrued                taxes                                                                                          |   |                                            | 1,423   |     |   | 5,603 |   |
| Power                supply derivative liability                                                                      |   |                                            | 4,213   |     |   | 7,791 |   |
| Power                supply regulatory liability                                                                      |   |                                            | 468     |     |   | 15,342 |   |
| Customer                deposits                                                                                      |   |                                            | 920     |     |   | 1,052 |   |
| Interest                accrued                                                                                       |   |                                            | 1,491   |     |   | 1,137 |   |
| Other                                                                                                                 |   |                                            | 2,791   |     |   | 2,552 |   |
| Total                current liabilities                                                                              |   |                                            | 31,219  |     |   | 63,156 |   |
| **Deferred                credits**                                                                                   |   |                                            |         |     |   |  |   |
| Power                supply derivative liability                                                                      |   |                                            | 18,313  |     |   | 22,344 |   |
| Accumulated                deferred income taxes                                                                      |   |                                            | 28,989  |     |   | 28,092 |   |
| Unamortized                investment tax credits                                                                     |   |                                            | 1,998   |     |   | 2,280 |   |
| Pine                Street Barge Canal cleanup liability                                                              |   |                                            | 4,535   |     |   | 6,096 |   |
| Accumulated                cost of removal                                                                            |   |                                            | 21,494  |     |   | 21,105 |   |
| Deferred                compensation                                                                                  |   |                                            | 5,485   |     |   | 8,213 |   |
| Deferred                regulatory revenues                                                                           |   |                                            | 6,260   |     |   | 582 |   |
| Other                regulatory liabilities                                                                           |   |                                            | 7,738   |     |   | 6,485 |   |
| Minimum                pension liablity                                                                               |   |                                            | 12,433  |     |   | 5,486 |   |
| Other                deferred liabilities                                                                             |   |                                            | 5,759   |     |   | 7,737 |   |
| Total                deferred credits                                                                                 |   |                                            | 113,004 |     |   | 108,420 |   |
| **COMMITMENTS                AND CONTINGENCIES, Note 3**                                                              |   |                                            |         |     |   |  |   |
| **Non-utility**                                                                                                       |   |                                            |         |     |   |  |   |
| Net                liabilities of discontinued segment                                                                |   |                                            | 2,541   |     |   | 2,374 |   |
| Total                non-utility liabilities                                                                          |   |                                            | 2,541   |     |   | 2,374 |   |
| **Total                capitalization and liabilities**                                                               |   | $                                               | 385,962 |     | $      | 374,268 |   |
| The                accompanying notes are an integral part of these consolidated financial                statements. |   |                                            |    |     |   |   |   |

----

| **Consolidated                Statements of Changes in Stockholders' Equity** |   |                            |          |        |   |         |   |              |       | **Accumulated** |   |       |   |       |       |
|-------------------------------------------------------------------------------|--------|---------------------------------|---------------|-------------|--------|--------------|--------|-------------------|------------|-----------------|--------|------------|--------|------------|------------|
| **and                Comprehensive Income**                                   |   |                            |          |        |   |         |   |              |       | **Other**       |   |       |   | **Total**  |       |
|                                                                          |   | **Common                Stock** |          | **Paid-in** |   | **Retained** |   | **Comprehensive** |       | **Treasury**    |   | **Common** |   |
|                                                                          |   | **Shares**                      |          | **Amount**  |   | **Capital**  |   | **Earnings**      |       | **Income**      |   | **Stock**  |   | **Equity** |       |
| (In                thousands except share data)                               |   |                            |          |        |   |         |   |              |       |            |   |       |   |       |       |
| **BALANCE,                December 31, 2003**                                 |   |                            | **5,033,215** |        | **$**  | **19,536**   |   | **$**             | **76,081** |            | **$**  | **22,786** |   | **$**      | **(1,787** | **)** | **$** | **(16,701** | **)** | **$** | **99,915** |   |
| Common                stock issuance:                                         |   |                            |               |        |   |              |   |              |            |            |   |            |   |       |            |   |   |  |   |   |  |   |
| Stock                options and grants                                       |   |                            | 107,264       |        |   | 358          |   |              | 2,771      |            |   | -          |   |       | -          |   |   | - |   |   | 3,129 |   |
| Net                income                                                     |   |                            | -             |        |   | -            |   |              | -          |            |   | 11,584     |   |       | -          |   |   | - |   |   | 11,584 |   |
| Other                comprehensive loss                                       |   |                            | -             |        |   | -            |   |              | -          |            |   | -          |   |       | (566       | ) |   | - |   |   | (566 | ) |
| Common                stock dividends-$0.88 per share                         |   |                            | -             |        |   | -            |   |              | -          |            |   | (4,481     | )      |       | -          |   |   | - |   |   | (4,481 | ) |
| **BALANCE,                December 31, 2004**                                 |   |                            | **5,140,479** |        |   | **19,894**   |   |              | **78,852** |            |   | **29,889** |   |       | **(2,353** | **)** |   | **(16,701** | **)** |   | **109,581** |   |
| Common                stock issuance:                                         |   |                            |               |        |   |              |   |              |            |            |   |            |   |       |            |   |   |  |   |   |  |   |
| Stock                options and grants                                       |   |                            | 92,844        |        |   | 309          |   |              | 2,419      |            |   | -          |   |       | -          |   |   | - |   |   | 2,728 |   |
| Net                income                                                     |   |                            | -             |        |   | -            |   |              | -          |            |   | 11,180     |   |       | -          |   |   | - |   |   | 11,180 |   |
| Other                comprehensive loss                                       |   |                            | -             |        |   | -            |   |              | -          |            |   | -          |   |       | (910       | ) |   | - |   |   | (910 | ) |
| Common                stock dividends-$1.00 per share                         |   |                            | -             |        |   | -            |   |              | -          |            |   | (5,205     | )      |       | -          |   |   | - |   |   | (5,205 | ) |
| **BALANCE,                December 31, 2005**                                 |   |                            | **5,233,323** |        |   | **20,203**   |   |              | **81,271** |            |   | **35,864** |   |       | **(3,263** | **)** |   | **(16,701** | **)** |   | **117,374** |   |
| Common                stock issuance:                                         |   |                            |          |        |   |         |   |              |       |            |   |       |   |       |       |   |   |   |   |   |   |   |
| Stock                options and grants                                       |   |                            | 70,527        |        |   | 235          |   |              | 1,553      |            |   |       |   |       |       |   |   |   |   |   | 1,788 |   |
| Net                income                                                     |   |                            |          |        |   |         |   |              |       |            |   | 10,123     |   |       | -          |   |   |   |   |   | 10,123 |   |
| Other                comprehensive income                                     |   |                            |          |        |   |         |   |              |       |            |   |       |   |       | 3,263      |   |   |   |   |   | 3,263 |   |
| Common                stock dividends-$1.12 per share                         |   |                            |          |        |   |         |   |              |       |            |   | (5,912     | )      |       |       |   |   |   |   |   | (5,912 | ) |
| **BALANCE,                December 31, 2006**                                 |   |                            | **5,303,850** |        | **$**  | **20,438**   |   | **$**             | **82,824** |            | **$**  | **40,075** |   | **$**      | **-**      |   | **$** | **(16,701** | **)** | **$** | **126,636** |   |

| **Consolidated                Statements of Comprehensive Income**                                                  |   | **For                the years ended December 31,** |   |
|---------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                                                                |   | **2006**                                            |   | **2005** |   | **2004** |   |
|                                                                                                                |   | In                thousands                         |   |
| Net                income                                                                                           |   | $                                                   | 10,123 |   | $ | 11,180 |   | $ | 11,584 |   |
| Minimum                pension liability adjustment, net of applicable income                taxes                  |   |                                                | 3,263  |   |   | (910 | ) |   | (566 | ) |
| of                $2,223 expense, $620 benefit and $391 benefit,                respectively                        |   |                                                |   |   |   |   |   |   |   |   |
| Other                comprehensive income                                                                           |   | $                                                   | 13,386 |   | $ | 10,270 |   | $ | 11,018 |   |
| The                accompanying notes are an integral part of the consolidated financial                statements. |   |                                                |   |   |   |   |   |   |   |   |

----

**Notes      to Consolidated Financial Statements**

**A.      SIGNIFICANT ACCOUNTING POLICIES**

**Organization      and Basis of Presentation.**

|                            |   | **For                the Years ended December 31,** |   |
|---------------------------------|--------|-----------------------------------------------------|--------|
| **In                thousands** |   | **2006**                                            |   | **2005** |   | **2004** |   |
| Revenue                         |   | $                                                   | 921    |   | $ | 941 |   | $ | 961 |   |
| Expense                         |   |                                                | 661    |   |   | 652 |   |   | 594 |   |
| Net                Income       |   | $                                                   | 260    |   | $ | 289 |   | $ | 367 |   |

**Use        of Estimates.**

**Regulatory        Accounting.**

|                                                             |   |                                 |   |     |   | **Amortizable**                        |   |
|------------------------------------------------------------------|--------|--------------------------------------|--------|----------|--------|----------------------------------------|--------|
| **Regulatory                  assets and liabilities**           |   | **Total**                            |   |     |   | **2006                  balances**     |   |
|                                                             |   | **At                  December 31,** |   |     |   | **included                  in rates** |   |
|                                                             |   | **2006**                             |   | **2005** |   | **in                  2007**           |   |
| Regulatory                  assets:                              |   | (in                  thousands)      |   |
|                                                             |   |                                 |   |     |   |                                   |   |
| Demand-side                  management programs                 |   | $                                    | 4,376  |     | $      | 5,835                                  |   | $ | 4,376 |   |
| Purchased                  power costs                           |   |                                 | 3,683  |     |   | 1,812                                  |   |   | 3,683 |   |
| Pine                  Street barge canal                         |   |                                 | 12,070 |     |   | 12,861                                 |   |   | 6,732 |   |
| Derivative                  liability regulatory assets          |   |                                 | 22,526 |     |   | 30,135                                 |   |   | - |   |
| Pension                  funding regulatory asset                |   |                                 | 11,789 |     |   | -                                      |   |   | - |   |
| Other                  regulatory assets                         |   |                                 | 5,954  |     |   | 5,809                                  |   |   | 3,559 |   |
| Total                  regulatory assets                         |   |                                 | 60,398 |     |   | 56,452                                 |   |   | 18,350 |   |
| Regulatory                  liabilities:                         |   |                                 |   |     |   |                                   |   |   |   |   |
|                                                             |   |                                 |   |     |   |                                   |   |   |   |   |
| Accumulated                  cost of removal                     |   |                                 | 21,494 |     |   | 21,105                                 |   |   | 21,494 |   |
| Deferred                  regulatory revenues                    |   |                                 | 6,260  |     |   | 582                                    |   |   | 582 |   |
| Derivative                  asset regulatory liability           |   |                                 | 468    |     |   | 15,342                                 |   |   | - |   |
| Other                  regulatory liabilities                    |   |                                 | 7,738  |     |   | 6,485                                  |   |   | 5,855 |   |
| Other                  deferred liablilities                     |   |                                 | 5,759  |     |   | 7,737                                  |   |   | 3,062 |   |
| Total                  regulatory liabilities                    |   |                                 | 41,719 |     |   | 51,251                                 |   |   | 30,993 |   |
| Regulatory                  assets net of regulatory liabilities |   | $                                    | 18,679 |     | $      | 5,201                                  |   | $ | (12,643 | ) |

|                                                                             |   |                             |   |                               |   | **SFAS                  158**       |   |                             |    |
|-----------------------------------------------------------------------------|--------|----------------------------------|--------|------------------------------------|--------|-------------------------------------|--------|----------------------------------|---------|
|                                                                        |   | **December                  31** |   | **2006                  Activity** |   | **and                  regulatory** |   | **December                  31** |    |
| in                  thousands                                               |   | **2005**                         |   |                               |   | **reclassification**                |   | **2006**                         |    |
| Prepaid                  pension                                            |   | $                                | 2,170  |                               | $      | 1,623                               |   | $                                | (3,793  | ) | $ | - |   |
| Regulatory                  asset FAS 158 pension funding obligation offset |   |                             | -      |                               |   | -                                   |   |                             | 11,789  |   |   | 11,789 |   |
| Deferred                  tax asset - federal                               |   |                             | 3,271  |                               |   | (1,749                              | )      |                             | 2,459   |   |   | 3,982 |   |
| Deferred                  tax asset - state                                 |   |                             | 868    |                               |   | (464                                | )      |                             | 653     |   |   | 1,057 |   |
| Accumulated                  other comprehensive income                     |   |                             | 3,263  |                               |   | (3,074                              | )      |                             | (188    | ) |   | - |   |
| Minimum                  pension funding liability                          |   |                             | (5,486 | )                                  |   | 5,486                               |   |                             | -       |   |   | - |   |
| Total                  pension funding obligation                           |   |                             | -      |                               |   | (317                                | )      |                             | (12,116 | ) |   | (12,433 | ) |
| SERP                  liability                                             |   |                             | (3,897 | )                                  |   | (202                                | )      |                             | 4,099   |   |   | - |   |
| Post                  retirement health care liability                      |   |                             | (832   | )                                  |   | 493                                 |   |                             | 338     |   |   | - |   |
| Deferred                  tax liability - federal                           |   |                             | (695   | )                                  |   | (520                                | )      |                             | (2,561  | ) |   | (3,776 | ) |
| Deferred                  tax liability - state                             |   |                             | (184   | )                                  |   | (138                                | )      |                             | (680    | ) |   | (1,002 | ) |

**Discontinued          Operations.**

**Impairment.**

**Utility          Plant.**

| Property                    Summary at December 31,          |   | **Approximate**                            |   |                                |   |     |   |
|--------------------------------------------------------------|--------|--------------------------------------------|--------|-------------------------------------|--------|----------|--------|
|                                                         |   | **Average                    depreciable** |   | **2006**                            |   | **2005** |   |
|                                                         |   | **life                    in years**       |   | **In                    thousands** |
| Property,                    Plant and Equipment:            |   |                                       |   |                                |   |     |   |
| Intangible,                    FERC Licenses and Software    |   |                                       | 13     |                                | $      | 8,501    |   | $ | 11,162 |   |
| Generation                                                   |   |                                       | 41     |                                |   | 77,445   |   |   | 73,413 |   |
| Transmission                                                 |   |                                       | 39     |                                |   | 40,931   |   |   | 40,311 |   |
| Distribution                                                 |   |                                       | 37     |                                |   | 204,235  |   |   | 193,261 |   |
| General,                    including transportation         |   |                                       | 18     |                                |   | 31,858   |   |   | 29,800 |   |
| Total                    Plant in Service                    |   |                                       |   |                                |   | 362,970  |   |   | 347,947 |   |
| Accumulated                    Depreciation and Amortization |   |                                       |   |                                |   | (127,704 | )      |   | (122,924 | ) |
| Net                    Plant in Service                      |   |                                       |   |                                |   | 235,266  |   |   | 225,023 |   |
| Capital                    Lease                             |   |                                       |   |                                |   | 4,060    |   |   | 4,369 |   |
| Construction                    Work in Progress             |   |                                       |   |                                |   | 7,666    |   |   | 7,519 |   |
| Total                    Utility Plant, net                  |   |                                       |   |                                | $      | 246,992  |   | $ | 236,911 |   |

**Depreciation        and Amortization.**

**Disposal        of Assets.**

**Cash        and Cash Equivalents.**

**Restricted        Cash.**

**Operating        Revenues.**

**Allowance        for Doubtful Accounts.**

| **Allowance                  for Doubtful Accounts** |   |                              |   |                                     |   |         |   |                            |   |
|------------------------------------------------------|--------|-----------------------------------|--------|------------------------------------------|--------|--------------|--------|---------------------------------|--------|
|                                                 |   | **Balance                  at**   |   | **Additions**                            |   | **Accounts** |   | **Balance                  at** |   |
|                                                 |   | **Beginning                  of** |   | **Charged                  to**          |   | **Charged**  |   | **End                  of**     |   |
|                                                 |   | **Period**                        |   | **Cost                  & Expenses** |   | **Off**      |   | **Period**                      |   |
| In                  thousands                        |   |                              |   |                                     |   |         |   |                            |   |
| 2006                                                 |   | $                                 | 484    |                                     | $      | 381          |   | $                               | 464    |   | $ | 401 |   |
| 2005                                                 |   |                              | 620    |                                     |   | 308          |   |                            | 444    |   |   | 484 |   |
| 2004                                                 |   |                              | 691    |                                     |   | 549          |   |                            | 620    |   |   | 620 |   |

**Earnings      Per Share.**
*Earnings      Per Share, *

**Stock-Based      Compensation**

*Accounting      for Stock-Based Compensation,*

| Pro-forma                  net income                               |   |                                                  |   |     |   |     |   |
|---------------------------------------------------------------------|--------|-------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                                |   | **For                  the years ended December 31,** |   |
|                                                                |   | **2006**                                              |   | **2005** |   | **2004** |   |
| In                  thousands, except per share amounts             |   |                                                  |   |     |   |     |   |
| Net                  income reported                                |   | $                                                     | 10,123 |     | $      | 11,180   |   | $ | 11,584 |   |
| Pro-forma                  net income                               |   | $                                                     | 10,123 |     | $      | 11,180   |   | $ | 11,503 |   |
| Net                  income per share                               |   |                                                  |        |     |   |          |   |   |  |   |
| As                  reported-basic                                  |   | $                                                     | 1.92   |     | $      | 2.15     |   | $ | 2.28 |   |
| Pro-forma                  basic                                    |   | $                                                     | 1.92   |     | $      | 2.15     |   | $ | 2.26 |   |
| As                  reported-diluted                                |   | $                                                     | 1.89   |     | $      | 2.12     |   | $ | 2.20 |   |
| Pro-forma                  diluted                                  |   | $                                                     | 1.89   |     | $      | 2.12     |   | $ | 2.19 |   |
| Stock                  compensation included in results, net of tax |   | $                                                     | 1,031  |     | $      | 806      |   | $ | 740 |   |
| Fair                  value of all stock compensation               |   |                                                  | 1,031  |     |   | 806      |   |   | 821 |   |

**Major      Customers and Other Concentration Risks.**

**Fair      Value of Financial Instruments.**

|                                               |   | **At                  December 31**, |    |
|----------------------------------------------------|--------|--------------------------------------|---------|
|                                               |   | **2006**                             |    | **2005** |   |
|                                               |   | **Calculated**                       |    | **Amount                  carried** |   | **Calculated** |   | **Amount                  carried** |   |
| In                  thousands                      |   | **Fair                  Value**      |    | **on                  balance sheet** |   | **Fair                  Value** |   | **on                  balance sheet** |   |
| Long-Term                  Debt, net,(Note F)      |   | $                                    | 108,360 |   | $ | 109,000 |   | $ | 76,851 |   | $ | 79,000 |   |
| Derivatives,                  net                  |   |                                 | (22,058 | ) |   | (22,058 | ) |   | (14,793 | ) |   | (14,793 | ) |
| Current                  portion of long-term debt |   |                                 | -       |   |   | - |   |   | 14,080 |   |   | 14,000 |   |

**Environmental          Liabilities.**
*Accounting          for Contingencies.*

**Purchased          Power.**

**Derivative          Instruments.**

*Accounting          for Derivative Instruments and Hedging Activities*

| Derivatives                               |   | **At                    December 31, 2006** |    |
|-------------------------------------------|--------|---------------------------------------------|---------|
|                                      |   | **Fair                    Value**           |    |
|                                      |   | **(in                    thousands)**       |    |
| Interest                    rate swap     |   | $                                           | 193     |   |
| Power                    supply swaps     |   |                                        | (1,918  | ) |
| 9701                    agreement         |   |                                        | (20,608 | ) |
| Forward                    sale contracts |   |                                        | 275     |   |
|                                      |   | $                                           | (22,058 | ) |

|                                          | **Option                        Value** | **Risk                        Free**     | **Price**      | **Average**                              | **Contract** |
|-----------------------------------------------|-----------------------------------------|------------------------------------------|----------------|------------------------------------------|--------------|
|                                          | **Model**                               | **Interest                        Rate** | **Volatility** | **Forward                        Price** | **Expires**  |
| Interest                        rate swap     | Deterministic                           | n/a                                      | n/a            | n/a                                      | 2007         |
| 9701                        agreement         | Black-Scholes                           | 4.4%                                     | 29%-10%        | $93                                      | 2015         |
| Forward                        sale contracts | Deterministic                           | 5%                                       | n/a            | $70                                      | 2007         |
| Power                        supply Swaps     | Deterministic                           | 4.8-5.1%                                 | n/a            | $92                                      | 2007-2009    |

**Other                Comprehensive Income.**

**Recent                Accounting Pronouncements. **

**Accounting                pronouncements adopted for years ending 2005 and 2004:**

*Accounting                for Asset Retirement Obligations*

**Accounting                pronouncements adopted for year ending 2006:**

**Accounting                pronouncements considered for future periods:**

**,                **

**B.                INVESTMENTS IN ASSOCIATED COMPANIES**

|                                                                |   | **Percent                            Ownership** |   | **Investment                            in Equity** |   |
|---------------------------------------------------------------------|--------|--------------------------------------------------|--------|-----------------------------------------------------|--------|
|                                                                |   | **at                            December 31,**   |   | **at                            December 31,**      |   |
|                                                                |   | **2006**                                         |   | **2005**                                            |   | **2006** |   | **2005** |   |
|                                                                |   |                                             |   |                                                |   | **(In                            thousands)** |   |
| VELCO-common                                                        |   |                                             | 29.17  | %                                                   |   | 29.17 | % | $ | 7,054 |   | $ | 7,048 |   |
| VELCO-preferred                                                     |   |                                             | 30.00  | %                                                   |   | 30.00 | % |   | 52 |   |   | 68 |   |
| Total                            VELCO                              |   |                                             |        |                                                |   |  |   |   | 7,106 |   |   | 7,116 |   |
| Transco                            LLC                              |   |                                             | 21.90  | %                                                   |   | - |   |   | 17,843 |   |   | - |   |
| VYNPC-                            Common                            |   |                                             | 33.60  | %                                                   |   | 33.60 | % |   | 1,615 |   |   | 1,601 |   |
| New                            England Hydro Transmission-Common    |   |                                             | 3.18   | %                                                   |   | 3.18 | % |   | 436 |   |   | 485 |   |
| New                            England Hydro Transmission Electric- |   |                                             |        |                                                |   |  |   |   |   |   |   |   |   |
| Common                                                              |   |                                             | 3.18   | %                                                   |   | 3.18 | % |   | 768 |   |   | 834 |   |
| Total                            investment in associated companies |   |                                             |        |                                                |   |  |   | $ | 27,768 |   | $ | 10,036 |   |

**VELCO      and Transco.**

| Summarized                  unaudited financial information for Transco is as follows: |   |                            |    |
|----------------------------------------------------------------------------------------|--------|---------------------------------|---------|
| At                  and for the year ended December 31,                                |   |                            |    |
|                                                                                   |   | **2006**                        |    |
|                                                                                   |   | (In                  thousands) |    |
| Net                  income                                                            |   | $                               | 5,527   |   |
| Company's                  equity in net income                                        |   | $                               | 1,011   |   |
| Total                  assets                                                          |   | $                               | 292,707 |   |
| Liabilities                  and long-term debt                                        |   |                            | 214,101 |   |
| Net                  assets                                                            |   | $                               | 78,606  |   |
| Company's                  equity in net assets                                        |   | $                               | 17,843  |   |

| Summarized                    unaudited financial information for VELCO (consolidated)                    follows: |   |                              |    |     |   |     |   |
|--------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|----------|--------|----------|--------|
| At                    and for the years ended December 31,                                                         |   |                              |    |     |   |     |   |
|                                                                                                               |   | **2006**                          |    | **2005** |   | **2004** |   |
|                                                                                                               |   | (In                    thousands) |
| Net                    income                                                                                      |   | $                                 | 5,053   |     | $      | 3,018    |   | $ | 1,683 |   |
| Company's                    equity in net income                                                                  |   | $                                 | 1,841   |     | $      | 877      |   | $ | 472 |   |
| Total                    assets                                                                                    |   | $                                 | 310,759 |     | $      | 187,549  |   | $ | 145,632 |   |
| Liabilities                    and long-term debt                                                                  |   |                              | 232,383 |     |   | 163,142  |   |   | 120,983 |   |
| Net                    assets                                                                                      |   | $                                 | 78,376  |     | $      | 24,407   |   | $ | 24,649 |   |
| Company's                    equity in net assets                                                                  |   | $                                 | 24,949  |     | $      | 7,116    |   | $ | 7,199 |   |
| Amounts                    due from (to) VELCO                                                                     |   | $                                 | 1,791   |     | $      | 1,596    |   | $ | (4,068 | ) |
| 2006                    amounts include Transco                                                                    |   |                              |    |     |   |     |   |   |   |   |

**Vermont        Yankee Nuclear Power Corporation ("VYNPC")**

| Summarized                  unaudited financial information for VYNPC is as follows: |   |     |    |                            |   |     |   |
|--------------------------------------------------------------------------------------|--------|----------|---------|---------------------------------|--------|----------|--------|
| At                  and for the years ended December 31,                             |   |     |    |                            |   |     |   |
|                                                                                 |   | **2006** |    | **2005**                        |   | **2004** |   |
|                                                                                 |   |     |    | (In                  thousands) |   |     |   |
| Earnings:                                                                            |   |     |    |                            |   |     |   |
| Operating                  revenues                                                  |   | $        | 201,325 |                            | $      | 160,613  |   | $ | 167,399 |   |
| Net                  income applicable to common stock                               |   |     | 749     |                            |   | 660      |   |   | 538 |   |
| Company's                  equity in net income                                      |   | $        | 251     |                            | $      | 221      |   | $ | 181 |   |
| Total                  assets                                                        |   | $        | 157,880 |                            | $      | 153,132  |   | $ | 151,542 |   |
| Liabilities                  and long-term debt                                      |   |     | 153,079 |                            |   | 148,371  |   |   | 146,747 |   |
| Net                  Assets                                                          |   | $        | 4,801   |                            | $      | 4,761    |   | $ | 4,795 |   |
| Company's                  equity in net assets                                      |   | $        | 1,615   |                            | $      | 1,601    |   | $ | 1,612 |   |
| Amounts                  due to VYNPC                                                |   | $        | 3,129   |                            | $      | 3,077    |   | $ | 3,324 |   |

**C.          COMMON STOCK EQUITY AND STOCK AWARD PLANS**

| Stock                    awards                                    |   | **Total**                          |    | **Vested**                        |   | **Non-vested**  |   | **Weighted**   |    | **Shares**                          |   |             |   |
|--------------------------------------------------------------------|--------|------------------------------------|---------|-----------------------------------|--------|-----------------|--------|----------------|---------|-------------------------------------|--------|------------------|--------|
|                                                               |   | **Stock**                          |    | **Stock**                         |   | **Stock**       |   | **Average**    |    | **returned                    for** |   | **Compensation** |   |
|                                                               |   | **Awards**                         |    | **Awards**                        |   | **Awards**      |   | **Grant-date** |    | **income                    tax**   |   | **cost**         |   |
|                                                               |   | **Share                    units** |    | **fair                    value** |   | **withholding** |   | **recognized** |    |
| Outstanding                    at December 31, 2005                |   |                               | 58,566  |                              |   | 7,166           |   |           | 51,400  |                                | $      | 27.39            |   |   | - |   | $ | - |   |
| Employee                    grants and dividend equivalents earned |   |                               | 14,862  |                              |   | 14,862          |   |           |    |                                |   | 33.26            |   |   | 4,872 |   |   | 494,527 |   |
| Grants                    to officers and directors                |   |                               | 52,870  |                              |   | -               |   |           | 52,870  |                                |   | 29.07            |   |   | 311 |   |   | 1,415,805 |   |
| Vested                                                             |   |                               | -       |                              |   | 41,900          |   |           | (41,900 | )                                   |   | 27.84            |   |   | - |   |   |   |   |
| Forfeited                                                          |   |                               | (3,333  | )                                 |   |            |   |           | (3,333  | )                                   |   | 28.30            |   |   |   |   |   | (94,324 | ) |
| Issued                                                             |   |                               | (58,215 | )                                 |   | (58,215         | )      |           | -       |                                |   | -                |   |   | 10,411 |   |   |   |   |
| Outstanding                    at December 31, 2006                |   |                               | 64,750  |                              |   | 5,713           |   |           | 59,037  |                                | $      | 28.53            |   |   | 15,594 |   | $ | 1,816,008 |   |

|     |   | **Weighted** |   |            |   |            |   | **Assumptions                      used in option pricing model** |   |
|----------|--------|--------------|--------|-----------------|--------|-----------------|--------|-------------------------------------------------------------------|--------|
|     |   | **average**  |   |            |   | **Remaining**   |   | **Risk                      Free**                                |   | **Expected** |   | **Expected** |   |   |   |
| **Plan** |   | **exercise** |   | **Outstanding** |   | **Contractual** |   | **Interest**                                                      |   | **Life                      in** |   | **Stock** |   | **Dividend** |   |
| **year** |   | **price**    |   | **options**     |   | **Life**        |   | **rate**                                                          |   | **Years** |   | **Volatility** |   | **Yield** |   |
| 2000     |   | $            | 7.90   |            |   | 85,100          |   |                                                              | 3.6    |   |   | 6.05 | % |   | 5 |   |   | 30.58 |   |   | 4.5 | % |
| 2001     |   | $            | 16.78  |            |   | 5,900           |   |                                                              | 4.7    |   |   | 5.25 | % |   | 6 |   |   | 32.69 |   |   | 4.0 | % |
| 2002     |   | $            | 18.03  |            |   | 26,700          |   |                                                              | 5.4    |   |   | 4.50 | % |   | 6.5 |   |   | 16.89 |   |   | 4.5 | % |
| Total    |   | $            | 10.64  |            |   | 117,700         |   |                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                    |   |        |    | **Weighted** |   | **Range                        of** |   |            |         | **Aggregate** |   | **Average**                              |   |
|---------------------------------------------------------|--------|-------------|---------|--------------|--------|-------------------------------------|--------|-----------------|--------------|---------------|--------|------------------------------------------|--------|
|                                                    |   | **Total**   |    | **Average**  |   | **Exercise**                        |   | **Options**     |         | **Intrinsic** |   | **Contractual**                          |   |
|                                                    |   | **Options** |    | **Price**    |   | **Prices**                          |   | **Exercisable** |         | **Value**     |   | **Life                        in Years** |   |
|                                                    |   |        |    |         |   |                                |   |            |         |          |   |                                     |   |
| Outstanding                        at December 31, 2003 |   |        | 300,850 |         |   | 11.39                               |   | $               | 7.90-$22.62  |          |   | 193,700                                  |   |   |   |   |   |   |   |
| Granted                                                 |   |        | -       |         |   | -                                   |   |            | -            |          |   |                                          |   |   |   |   |   |   |   |
| Exercised                                               |   |        | 89,650  |         |   | 12.11                               |   | $               | 7.90-$20.96  |          |   |                                          |   |   |   |   |   |   |   |
| Forfeited                                               |   |        | 1,900   |         |   | 18.65                               |   | $               | 17.54-$20.96 |          |   |                                          |   |   |   |   |   |   |   |
| Outstanding                        at December 31, 2004 |   |        | 209,300 |         | $      | 11.07                               |   | $               | 7.90-$22.62  |          |   | 213,500                                  |   |   |   |   |   |   |   |
| Granted                                                 |   |        | -       |         |   |                                |   |            |         |          |   |                                     |   |   |   |   |   |   |   |
| Exercised                                               |   |        | 62,500  |         | $      | 11.31                               |   | $               | 7.90-$22.62  |          |   |                                     |   |   |   |   |   |   |   |
| Forfeited                                               |   |        | 200     |         | $      | 20.08                               |   | $               | 17.54-$22.62 |          |   |                                     |   |   |   |   |   |   |   |
| Outstanding                        at December 31, 2005 |   |        | 146,600 |         | $      | 10.90                               |   | $               | 7.90-$22.62  |          |   | 146,600                                  |   |   |   |   |   |   |   |
| Granted                                                 |   |        | -       |         |   |                                |   |            |         |          |   |                                     |   |   |   |   |   |   |   |
| Exercised                                               |   |        | 28,900  |         | $      | 11.92                               |   | $               | 7.90-$20.96  |          |   |                                     |   |   | 344,488 |   |   |   |   |
| Forfeited                                               |   |        |    |         |   |                                |   |            |         |          |   |                                     |   |   |   |   |   |   |   |
| Outstanding                        at December 31, 2006 |   |        | 117,700 |         | $      | 10.64                               |   | $               | 7.90-$18.95  |          |   | 117,700                                  |   | $ | 1,252,328 |   |   | 4.1 |   |

| **Reconciliation                            of net income available**     | ** ** | **For                            the Years Ended**                          | ** ** |
|---------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|
| **for                            common shareholders and average shares** | ** ** | **December                            31**                                  | ** ** |
| ** **                                                                | ** ** | **2006**                                                                    |       | **2005** |   | **2004** |   |
| ** **                                                                | ** ** | **(in                            thousands)**** **** **** ** |       |
| Net                            income before preferred dividends          |       | $                                                                           | 10,123     |   | $ | 11,180 |   | $ | 11,587 |   |
| Preferred                            stock dividend requirement           |       |                                                                        | -          |   |   | - |   |   | 3 |   |
| Net                            income applicable to common                |       |                                                                        |       |   |   |   |   |   |   |   |
| stock                                                                     |       | $                                                                           | 10,123     |   | $ | 11,180 |   | $ | 11,584 |   |
|                                                                      |       |                                                                        |            |   |   |  |   |   |  |   |
| Average                            number of common shares-basic          |       |                                                                        | 5,270      |   |   | 5,195 |   |   | 5,083 |   |
| Dilutive                            effect of stock options               |       |                                                                        | 78         |   |   | 90 |   |   | 171 |   |
| Average                            number of common shares-diluted        |       |                                                                        | 5,348      |   |   | 5,285 |   |   | 5,254 |   |

*.*

**D.                    SHORT-TERM DEBT**

**E.                    LONG-TERM DEBT**

| **LONG-TERM                              DEBT**                                |   |         |                                       |                                                 |   | **At                              December 31,**   |   |
|--------------------------------------------------------------------------------|--------|--------------|--------------------------------------------|------------------------------------------------------|--------|----------------------------------------------------|--------|
| **First                              Mortgage Bonds**                          |   |         |                                       |                                                 |   | **2006**                                           |   | **2005** |   |
| **Interest                              Rate**                                 |   | **Maturity** |                                       | **Annual                              Sinking Fund** |   | (In                              thousands)        |   |
| 7.18%                                                                          |   |         | Nov.                              6, 2006  |                                                 |   | -                                                  |   | $ | - |   | $ | 10,000 |   |
| 7.05%                                                                          |   |         | Dec.                              15, 2006 |                                                 |   | -                                                  |   |   | - |   |   | 4,000 |   |
| 6.04%                                                                          |   |         | Dec.                              1, 2017  |                                                 |   | 6,000,000                              begins 2011 |   |   | 42,000 |   |   | 42,000 |   |
| 6.70%                                                                          |   |         | Nov.                              1, 2018  |                                                 |   | -                                                  |   |   | 15,000 |   |   | 15,000 |   |
| 9.64%                                                                          |   |         | Sept.                              1, 2020 |                                                 |   | -                                                  |   |   | 9,000 |   |   | 9,000 |   |
| 8.65%                                                                          |   |         | Mar.                              1, 2022  |                                                 |   | 500,000                              begins 2012   |   |   | 13,000 |   |   | 13,000 |   |
| 6.53%                                                                          |   |         | Aug.                              1, 2036  |                                                 |   | -                                                  |   |   | 30,000 |   |   | - |   |
| Total                              Long-term Debt Outstanding                  |   |         |                                       |                                                 |   |                                               |   |   | 109,000 |   |   | 93,000 |   |
| Less                              Current Maturities (due within one year)     |   |         |                                       |                                                 |   |                                               |   |   | - |   |   | 14,000 |   |
| **Total                              Long-term Debt, less current maturities** |   |         |                                       |                                                 |   |                                               |   | $ | 109,000 |   | $ | 79,000 |   |

**F.      INCOME TAXES**

**Utility.**

|                                                      |   | **At                  December 31,** |   |
|-----------------------------------------------------------|--------|--------------------------------------|--------|
|                                                      |   | **2006**                             |   | **2005** |   |
|                                                      |   | (In                  thousands)      |   |
| **Deferred                  Tax Assets**                  |   |                                 |   |   |   |
| Contributions                  in aid of construction     |   | $                                    | 3,451  |   | $ | 2,629 |   |
| Deferred                  compensation and                |   |                                 |        |   |   |  |   |
| postretirement                  benefits                  |   |                                 | 2,466  |   |   | 5,664 |   |
| Self                  insurance and other reserves        |   |                                 | 461    |   |   | 405 |   |
| Deferred                  regulatory earnings             |   |                                 | 3,371  |   |   | 1,280 |   |
| Cost                  of removal                          |   |                                 | 8,710  |   |   | 8,553 |   |
| Other                                                     |   |                                 | 2,668  |   |   | 2,011 |   |
| Derivatives                                               |   |                                 | 9,129  |   |   | 18,432 |   |
|                                                      |   | $                                    | 30,256 |   | $ | 38,974 |   |
| **Deferred                  Tax Liabilities**             |   |                                 |        |   |   |  |   |
| Accelerated                  Tax Depreciation on Property |   | $                                    | 41,480 |   | $ | 40,618 |   |
| Demand                  side management                   |   |                                 | 1,773  |   |   | 2,364 |   |
| Deferred                  purchased power costs           |   |                                 | 1,568  |   |   | 818 |   |
| Pine                  Street reserve                      |   |                                 | 3,053  |   |   | 2,742 |   |
| Investment                  in affiliates                 |   |                                 | 1,051  |   |   | 697 |   |
| Other                                                     |   |                                 | 1,620  |   |   | 1,501 |   |
| Derivative                  regulatory assets             |   |                                 | 9,129  |   |   | 18,432 |   |
|                                                      |   | $                                    | 59,674 |   | $ | 67,172 |   |
| Net                  accumulated deferred income     |   |                                 |        |   |   |  |   |
|  tax                  liability                      |   | $                                    | 29,418 |   | $ | 28,198 |   |

|                                             |   | **For                    the Years ended December 31,** |   |
|--------------------------------------------------|--------|---------------------------------------------------------|--------|
|                                             |   | **2006**                                                |   | **2005** |   | **2004** |   |
|                                             |   | (In                    thousands)                       |   |
| Current                    federal income taxes  |   | $                                                       | 5,757  |   | $ | 6,326 |   | $ | 461 |   |
| Current                    state income taxes    |   |                                                    | 2,153  |   |   | 1,913 |   |   | 1,602 |   |
| Total                    current income taxes    |   |                                                    | 7,910  |   |   | 8,239 |   |   | 2,063 |   |
| Deferred                    federal income taxes |   |                                                    | (897   | ) |   | (1,938 | ) |   | 3,843 |   |
| Deferred                    state income taxes   |   |                                                    | (232   | ) |   | (341 | ) |   | 140 |   |
| Total                    deferred income taxes   |   |                                                    | (1,129 | ) |   | (2,279 | ) |   | 3,983 |   |
| Investment                    tax credits-net    |   |                                                    | (282   | ) |   | (284 | ) |   | (284 | ) |
| Income                    tax expense            |   | $                                                       | 6,499  |   | $ | 5,676 |   | $ | 5,762 |   |

|                                                               |   | **For                      the Years ended December 31,** |   |
|--------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                               |   | **2006**                                                  |   | **2005** |   | **2004** |   |
|                                                               |   | (In                      thousands)                       |   |
| Income                      before income taxes and                |   |                                                      |   |   |   |   |   |
| preferred                      dividends                           |   | $                                                         | 16,622 |   | $ | 16,856 |   | $ | 17,346 |   |
| Federal                      statutory rate                        |   |                                                      | 35.0   | % |   | 35.0 | % |   | 35.0 | % |
| Computed                      "expected" federal income taxes      |   | $                                                         | 5,818  |   | $ | 5,900 |   | $ | 6,071 |   |
| Increase                      (decrease) in taxes resulting from:  |   |                                                      |        |   |   |  |   |   |  |   |
| Tax                      versus book depreciation basis difference |   |                                                      | 99     |   |   | 91 |   |   | (149 | ) |
| Dividends                      received deduction                  |   |                                                      | (312   | ) |   | (350 | ) |   | (452 | ) |
| Amortization                      of ITC                           |   |                                                      | (282   | ) |   | (284 | ) |   | (284 | ) |
| State                      tax                                     |   |                                                      | 1,247  |   |   | 1,022 |   |   | 1,133 |   |
| Excess                      deferred taxes                         |   |                                                      | (60    | ) |   | (60 | ) |   | (123 | ) |
| Energy                      credits and production deduction       |   |                                                      | (493   | ) |   | (375 | ) |   | (125 | ) |
| Merger                      expenses                               |   |                                                      | 555    |   |   | - |   |   | - |   |
| Other                                                              |   |                                                      | (73    | ) |   | (268 | ) |   | (309 | ) |
| Total                      federal and state income tax            |   | $                                                         | 6,499  |   | $ | 5,676 |   | $ | 5,762 |   |
| Effective                      combined federal and state          |   |                                                      |        |   |   |  |   |   |  |   |
| income                      tax rate                               |   |                                                      | 39.1   | % |   | 33.0 | % |   | 34.5 | % |

**G.              PENSION AND RETIREMENT PLANS**

*Employers'              Accounting for Pensions*

|                                                                  |   | **2006**                              |   | **2005** |   | **2006** |   | **2005** |   |
|-----------------------------------------------------------------------|--------|---------------------------------------|--------|----------|--------|----------|--------|----------|--------|
|                                                                  |   | (In                        thousands) |   |
| Change                        in projected benefit obligation:        |   |                                  |   |     |   |     |   |     |   |
|                                                                  |   |                                  |   |     |   |     |   |     |   |
| Projected                        benefit obligation prior year end    |   | $                                     | 45,419 |     | $      | 41,531   |   | $        | 19,012 |   | $ | 18,979 |   |
| Service                        cost                                   |   |                                  | 1,400  |     |   | 1,229    |   |     | 277    |   |   | 306 |   |
| Interest                        cost                                  |   |                                  | 2,479  |     |   | 2,371    |   |     | 991    |   |   | 1,013 |   |
| Participant                        contributions                      |   |                                  | -      |     |   | -        |   |     | 190    |   |   | 157 |   |
| Plan                        change                                    |   |                                  | 70     |     |   | 549      |   |     | -      |   |   | - |   |
| Change                        in actuarial assumptions                |   |                                  | -      |     |   | -        |   |     | -      |   |   | - |   |
| Actuarial                        (gain) loss                          |   |                                  | (2,242 | )        |   | 1,880    |   |     | (411   | ) |   | (287 | ) |
| Benefits                        paid                                  |   |                                  | (2,116 | )        |   | (1,964   | )      |     | (1,447 | ) |   | (1,156 | ) |
| Administrative                        expense                         |   |                                  | (112   | )        |   | (177     | )      |     | -      |   |   | - |   |
| Projected                        benefit obligation as of year end    |   | $                                     | 44,898 |     | $      | 45,419   |   | $        | 18,612 |   | $ | 19,012 |   |
| Accumulated                        benefit obligation                 |   | $                                     | 44,898 |     | $      | 45,419   |   | $        | 18,612 |   | $ | 19,012 |   |
| Change                        in plan assets:                         |   |                                  |        |     |   |          |   |     |        |   |   |  |   |
| Fair                        value of plan assets as of prior year end |   | $                                     | 32,217 |     | $      | 29,930   |   | $        | 12,306 |   | $ | 11,672 |   |
| Administrative                        expenses paid                   |   |                                  | (112   | )        |   | (177     | )      |     | -      |   |   | - |   |
| Participant                        contributions                      |   |                                  | -      |     |   | -        |   |     | -      |   |   | - |   |
| Employer                        contributions                         |   |                                  | 3,369  |     |   | 2,011    |   |     | -      |   |   | 250 |   |
| Actual                        return on plan assets                   |   |                                  | 4,113  |     |   | 2,417    |   |     | 1,491  |   |   | 508 |   |
| Benefits                        paid                                  |   |                                  | (2,116 | )        |   | (1,964   | )      |     | (191   | ) |   | (124 | ) |
| Fair                        value of plan assets as of year end       |   | $                                     | 37,471 |     | $      | 32,217   |   | $        | 13,606 |   | $ | 12,306 |   |
|                                                                  |   |                                  |        |     |   |          |   |     |        |   |   |  |   |
| Funded                        status as of year end                   |   | $                                     | (7,427 | )        | $      | (13,203  | )      | $        | (5,006 | ) | $ | (6,706 | ) |
| Unrecognized                        transition obligation             |   |                                  | -      |     |   | -        |   |     | 1,968  |   |   | 2,296 |   |
| Unrecognized                        prior service cost                |   |                                  | 1,426  |     |   | 1,566    |   |     | (1,500 | ) |   | (1,738 | ) |
| Unrecognized                        net actuarial loss                |   |                                  | 5,696  |     |   | 9,910    |   |     | 4,199  |   |   | 5,317 |   |
| Prepaid                        (accrued) benefits at year end         |   | $                                     | (305   | )        | $      | (1,727   | )      | $        | (339   | ) | $ | (831 | ) |

|                                                                 |   | **For                            the years ended December 31,** |   |
|----------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|
|                                                                 |   | **Pension                            Plans**                    |   | **Other                            Postretirement Benefits** |   |
|                                                                 |   | **2006**                                                        |   | **2005** |   | **2004** |   | **2006** |   | **2005** |   | **2004** |   |
|                                                                 |   | (In                            thousands)                       |   |
| Service                            cost                              |   | $                                                               | 1,400  |   | $ | 1,229 |   | $ | 1,123 |   | $ | 277 |   | $ | 306 |   | $ | 335 |   |
| Interest                            cost                             |   |                                                            | 2,479  |   |   | 2,371 |   |   | 2,290 |   |   | 991 |   |   | 1,013 |   |   | 1,165 |   |
| Expected                            return on plan assets            |   |                                                            | (2,621 | ) |   | (2,454 | ) |   | (2,285 | ) |   | (977 | ) |   | (967 | ) |   | (857 | ) |
| Amortization                            of transition asset          |   |                                                            | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Amortization                            of prior service cost        |   |                                                            | 210    |   |   | 227 |   |   | 205 |   |   | (239 | ) |   | (239 | ) |   | (239 | ) |
| Amortization                            of the transition obligation |   |                                                            | -      |   |   | - |   |   | - |   |   | 328 |   |   | 328 |   |   | 328 |   |
| Recognized                            net actuarial gain             |   |                                                            | 480    |   |   | 351 |   |   | 267 |   |   | 192 |   |   | 177 |   |   | 338 |   |
| Net                            periodic benefit cost                 |   | $                                                               | 1,948  |   | $ | 1,724 |   | $ | 1,600 |   | $ | 572 |   | $ | 618 |   | $ | 1,070 |   |

| **Assumptions                              used in**                      |       | **For                              the years ended December 31,** | ** ** |
|---------------------------------------------------------------------------|------------|-------------------------------------------------------------------|------------|
| **benefit                              obligation measurement**           | ** ** | **Pension                              Plans**                    | ** ** | **Other                              Postretirement Benefits** |   |
|                                                                      |       | **2006**                                                          |       | **2005** |   | **2006** |   | **2005** |   |
| Weighted                              average assumptions as of year end: |       |                                                              |       |   |   |   |   |   |   |
| Discount                              rate                                |       |                                                              | 6.00       | % |   | 5.50 | % |   | 6.00 | % |   | 5.50 | % |
| Expected                              return on plan assets               |       |                                                              | 8.00       | % |   | 8.25 | % |   | 8.00 | % |   | 8.25 | % |
| Rate                              of compensation increase                |       |                                                              | 4.00       | % |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |
| Medical                              inflation                            |       |                                                              | -          |   |   | - |   |   | 9.25 | % |   | 10.00 | % |
| Measurement                              date                             |       |                                                              | 12/31/2006 |   |   | 12/31/2005 |   |   | 12/31/2006 |   |   | 12/31/2005 |   |
| Census                              date                                  |       |                                                              | 1/1/2006   |   |   | 1/1/2005 |   |   | 1/1/2006 |   |   | 1/1/2005 |   |

| **Assumptions                                used in**                      |   | **For                                the years ended December 31,** |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
| **periodic                                cost measurement**                |   | **Pension                                Plans**                    |   | **Other                                Postretirement Benefits** |   |
|                                                                        |   | **2006**                                                            |   | **2005** |   | **2006** |   | **2005** |   |
| Weighted                                average assumptions as of year end: |   |                                                                |   |   |   |   |   |   |   |
| Discount                                rate                                |   |                                                                | 6.00   | % |   | 5.75 | % |   | 5.50 | % |   | 5.75 | % |
| Expected                                return on plan assets               |   |                                                                | 8.00   | % |   | 8.25 | % |   | 8.00 | % |   | 8.25 | % |
| Rate                                of compensation increase                |   |                                                                | 4.00   | % |   | 4.00 | % |   | 4.00 | % |   | 4.00 | % |
| Current                                year trend                           |   |                                                                | -      |   |   | - |   |   | 9.25 | % |   | 10.00 | % |
| Ultimate                                year trend                          |   |                                                                |        |   |   |  |   |   | 5.00 | % |   | 5.00 | % |
| Year                                of ultimate trend                       |   |                                                                |        |   |   |  |   |   | 2011 |   |   | 2011 |   |

| **Weighted                                  Average Asset Allocation** |   | **Pension                                  Plans' Assets**            |   | **Other                                  Postretirement Benefit Assets** |   |
|------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
| **Asset                                  Category**                    |   | **For                                  the years ended December 31,** |   |
|                                                                   |   | **2007                                  Target**                      |   | **2006**                                                                 |   | **2005** |   | **2007                                  Target** |   | **2006** |   | **2005** |   |
| Equity                                  Securities                     |   |                                                                  | 65.00  | %                                                                        |   | 53.06 | % |   | 66.60 | % |   | 65.00 | % |   | 68.00 | % |   | 65.00 | % |
| Debt                                  Securities                       |   |                                                                  | 23.00  | %                                                                        |   | 26.96 | % |   | 18.71 | % |   | 35.00 | % |   | 29.00 | % |   | 31.00 | % |
| Real                                  Estate                           |   |                                                                  | 0.00   | %                                                                        |   | 0.00 | % |   | 0.00 | % |   | 0.00 | % |   | 0.00 | % |   | 0.00 | % |
| Other                                                                  |   |                                                                  | 0.00   | %                                                                        |   | 11.69 | % |   | 6.31 | % |   | 0.00 | % |   | 3.00 | % |   | 4.00 | % |
| Alternative                                  investments               |   |                                                                  | 12.00  | %                                                                        |   | 8.29 | % |   | 8.38 | % |   | 0.00 | % |   | 0.00 | % |   | 0.00 | % |
| Total                                                                  |   |                                                                  | 100.00 | %                                                                        |   | 100.00 | % |   | 100.00 | % |   | 100.00 | % |   | 100.00 | % |   | 100.00 | % |

|                                                      |   |        |   | **Pension                                    Plans** |   | **Other                                    Postretirement Benefits** |   |
|-----------------------------------------------------------|--------|------------------|--------|------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
|                                                      |   | **  ** |   | **Projected**                                        |   | **Projected**                                                        |   |
|                                                      |   | **  ** |   |                                                 |   | **Benefit**                                                          |   |   |   | **Benefit** |   |
|                                                      |   | **  ** |   | **Contributions**                                    |   | **payments**                                                         |   | **Contributions** |   | **payments** |   |
|   In                                  Thousands |   |             |   |                                                 |   |                                                                 |   |   |   |
| 2007                                                      |   |             |   |                                                 | $      | 2,403                                                                |   | $ | 2,137 |   | $ | 963 |   | $ | 963 |   |
| 2008                                                      |   |             |   |                                                 |   | 2,700                                                                |   |   | 2,644 |   |   | 1,000 |   |   | 999 |   |
| 2009                                                      |   |             |   |                                                 |   | 2,400                                                                |   |   | 2,390 |   |   | 1,050 |   |   | 1,022 |   |
| 2010                                                      |   |             |   |                                                 |   | 2,300                                                                |   |   | 2,286 |   |   | 1,050 |   |   | 1,065 |   |
| 2011                                                      |   |             |   |                                                 |   | 2,800                                                                |   |   | 2,790 |   |   | 1,100 |   |   | 1,103 |   |
| 2012                                    through 2016      |   |             |   |                                                 |   | 15,500                                                               |   |   | 15,412 |   |   | 6,100 |   |   | 6,104 |   |

**H.                            COMMITMENTS AND CONTINGENCIES**

**Environmental                            Matters**

**Pine                            Street Barge Canal Superfund Site -**

**Clean                            Air Act**

**Jointly-Owned                            Facilities**

|                                                                                                                                                                                                      |   |                                            |   |                                              |   | **Share                                      of**       |   | **Share                                      of** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|---------------------------------------------------|--------|---------------------------------------------------------|--------|---------------------------------------------------|--------|
|                                                                                                                                                                                                      |   | **Ownership**                                   |   | **Share                                      of** |   | **Utility**                                             |   | **Accumulated**                                   |   |
|                                                                                                                                                                                                      |   | **Interest**                                    |   | **Capacity**                                      |   | **Plant**                                               |   | **Depreciation**                                  |   |
|                                                                                                                                                                                                      |   | **(In                                      %)** |   | **(In                                      MW)**  |   | **(In                                      thousands)** |   |
| Highgate                                                                                                                                                                                                  |   |                                            | 33.8   |                                              |   | 67.6                                                    |   | $                                                 | 10,482 |   | $ | 5,753 |   |
| McNeil                                                                                                                                                                                                    |   |                                            | 11.0   |                                              |   | 5.9                                                     |   |                                              | 9,111  |   |   | 6,282 |   |
| Stony                                      Brook (No. 1)                                                                                                                                                  |   |                                            | 8.8    |                                              |   | 31.0                                                    |   |                                              | 11,390 |   |   | 10,066 |   |
| Wyman                                      (No. 4)                                                                                                                                                        |   |                                            | 1.1    |                                              |   | 6.8                                                     |   |                                              | 1,980  |   |   | 1,568 |   |
| Metallic                                      Neutral Return                                                                                                                                              |   |                                            | 59.4   |                                              |   | -                                                       |   |                                              | 1,563  |   |   | 994 |   |
|                                                                                                                                                                                                      |   |                                            |   |                                              |   |                                                    |   |                                              |   |   |   |   |   |
| Metallic                                      Neutral Return is a neutral conductor for the                                      NEPOOL/Hydro-Quebec                                      Interconnection |   |

**Rate                              Matters**

**Retail                              Rate Case - 2007 Alternative Regulation Plan**

| ·   | A                                      power supply cost adjustment mechanism under                                      which the Company will                                      recover or credit to customers, on a quarterly                                      basis, 90 percent of power                                      supply costs that are $300,000 (per quarter)                                      higher or lower than power                                      supply costs included in rates. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | An                                      allowed rate of return on equity (“ROE”) of 10.25 percent for 2007. The                                      allowed ROE adjusts annually, up or down, in                                      the amount of one-half the                                      change in the ten-year Treasury bond                                      rate. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | An                                      annual earnings sharing mechanism under which                                      the Company has the                                      opportunity to earn up to 75 basis points above                                      its allowed ROE and to                                      recover earning shortfalls in excess of 100                                      basis points below the allowed                                      ROE. Under the plan, certain exclusions, commonly                                      made in setting rates,                                      are applied to determine the Company’s earnings and are expected to affect                                      adversely the Company’s ability to earn its allowed rate of return                                      on                                      equity for core utility operations. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | Base                                      rates will be adjusted annually, based on the                                      Company’s cost of service.                                      Non-power supply cost increases are capped                                      at no more than $1.25 million                                      in 2008 and $1.5 million in 2009, exclusive                                      of ROE adjustments and                                      extraordinary costs in excess of $600,000 per                                      year. Base rate adjustments                                      must be approved by the VPSB. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                                      VPSB retains the authority to investigate the                                      Company’s rates at any time                                      and to modify or terminate the plan. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Retail                              Rate Case - 2003 Rate Plan**

| ·   | Rates                                      were set at levels that recover the Company’s VJO Contract costs,                                      effectively ending the regulatory disallowances                                      experienced by the Company                                      from 1998 through 2000; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                                      Company and customers shall share equally any                                      premium above book value                                      realized by the Company’s shareholders in any future merger, acquisition                                      or asset sale, subject to an $8.0 million limit                                      on the customers' share,                                      adjusted for inflation; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | The                                      Company's further investment in non-utility                                      operations was restricted                                      until new rates went into effect, which occurred                                      in January 2005. Although                                      this restriction has expired, we have no plans                                      to make material                                      investments in non-utility operations. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Accounting                              Order**

**Other                              Legal Matters**

**I.                              OBLIGATIONS UNDER TRANSMISSION INTERCONNECTION SUPPORT                              AGREEMENT AND OTHER                              LEASES**

----

|                                                         |   | **For                                          the Years ending** |   |
|--------------------------------------------------------------|--------|-------------------------------------------------------------------|--------|
|                                                         |   | **December                                          31**          |   |
|                                                         |   | (In                                          thousands)           |   |
|                                                         |   |                                                              |   |
| 2007                                                         |   | $                                                                 | 354    |   |
| 2008                                                         |   |                                                              | 354    |   |
| 2009                                                         |   |                                                              | 354    |   |
| 2010                                                         |   |                                                              | 354    |   |
| 2011                                                         |   |                                                              | 354    |   |
| Total                                          for 2012-2015 |   |                                                              | 1,772  |   |
| Total                                                        |   | $                                                                 | 3,543  |   |

**J.                                  LONG-TERM POWER PURCHASES**

**Unit                                  Purchases.**

| Purchased                                            power expense by significant contract                                            supplier |   |                                                                               |   |     |   |     |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                                                                                                           |   | **for                                            the Years****ended December 31,** |   |
|                                                                                                                                           |   | **2006**                                                                           |   | **2005** |   | **2004** |   |
| In                                            thousands                                                                                        |   |                                                                               |   |     |   |     |   |
| Hydro                                            Quebec                                                                                        |   | $                                                                                  | 55,045 |     | $      | 50,112   |   | $ | 48,309 |   |
| Morgan                                            Stanley                                                                                      |   |                                                                               | 10,313 |     |   | 12,563   |   |   | 11,106 |   |
| VYNPC                                                                                                                                          |   |                                                                               | 40,357 |     |   | 32,409   |   |   | 33,331 |   |
| Small                                            Power Producers                                                                               |   |                                                                               | 19,674 |     |   | 16,486   |   |   | 15,832 |   |
| Stony                                            Brook                                                                                         |   |                                                                               | 1,947  |     |   | 1,667    |   |   | 1,696 |   |

|                                                                             |   | **Future                                              Payments Contractually Due by Period** |    |
|----------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|---------|
| **At                                              December 31, 2006**            |   |                                                                                         |    |   |   | **2008                                              and** |   | **2010                                              and** |   | **After** |   |
|                                                                             |   | **Total**                                                                                    |    | **2007** |   | **2009** |   | **2011** |   | **2011** |   |
|                                                                             |   | **(In                                              thousands)**                              |    |
| Hydro-Quebec                                              power supply contracts |   | $                                                                                            | 475,117 |   | $ | 52,376 |   | $ | 103,582 |   | $ | 105,676 |   | $ | 213,483 |   |
| JP                                              Morgan contract                  |   |                                                                                         | 75,680  |   |   | 17,029 |   |   | 36,973 |   |   | 21,678 |   |   | - |   |
| Independent                                              Power Producers         |   |                                                                                         | 120,610 |   |   | 17,145 |   |   | 31,332 |   |   | 29,619 |   |   | 42,514 |   |
| Stony                                              Brook contract                |   |                                                                                         | 23,573  |   |   | 3,858 |   |   | 7,844 |   |   | 7,878 |   |   | 3,994 |   |
| VYNPC                                              PPA                           |   |                                                                                         | 189,308 |   |   | 33,744 |   |   | 73,155 |   |   | 72,118 |   |   | 10,292 |   |
| Total                                                                            |   | $                                                                                            | 884,288 |   | $ | 124,151 |   | $ | 252,886 |   | $ | 236,968 |   | $ | 270,283 |   |

**Vermont                                      Yankee.**

|                                                                                 |   |   |      | **VYNPC**    |   |
|--------------------------------------------------------------------------------------|--------|--------|-----------|--------------|--------|
|                                                                                 |   |   |      | **Contract** |   |
| (Dollars                                                in thousands except per KWh) |   |   |      |         |   |
| Capacity                                                acquired                     |   |   |      |         |   | 106                                                MW |   |
| Contract                                                period expires               |   |   |      |         |   | 2012 |   |
| Company's                                                share of output             |   |   |      |         |   | 20 | % |
| Annual                                                energy charge                  |   |   | 2006      |         | $      | 40,357 |   |
| estimated                                                                            |   |   | 2007-2012 |         | $      | 36,318 |   |
| Average                                                cost per KWh                  |   |   | 2006      |         | $      | 0.042 |   |
| estimated                                                                            |   |   | 2007-2012 |         | $      | 0.043 |   |

**Hydro                                        Quebec.**

|                                                                     |   |   |      | **The                                                  VJO Contract**                  |   |
|--------------------------------------------------------------------------|--------|--------|-----------|----------------------------------------------------------------------------------------|--------|
|                                                                     |   |   |      | **Schedule                                                  B**                        |   | **Schedule                                                  C3** |   |
|                                                                     |   |   |      | (Dollars                                                  in thousands except per KWh) |   |
| Capacity                                                  acquired       |   |   |           |                                                                                   |   | 68                                                  MW |   |   |  |   |   | 46                                                  MW |   |   |  |   |
| Contract                                                  period         |   |   |           |                                                                                   |   | 1995-2015 |   |   |  |   |   | 1995-2015 |   |   |  |   |
| Minimum                                                  energy purchase |   |   |           |                                                                                   |   | 65%-75 | % |   |  |   |   | 65%-75 | % |   |  |   |
| (annual                                                  load factor)    |   |   |           |                                                                                   |   |  |   |   |  |   |   |  |   |   |  |   |
| Annual                                                  energy charge    |   |   | 2006      |                                                                                   | $      | 13,608 |   |   |  |   | $ | 9,380 |   |   |  |   |
| estimated                                                                |   |   | 2007-2015 |                                                                                   | $      | 14,514 |   |   | (1 | ) | $ | 10,015 |   |   | (1 | ) |
| Annual                                                  capacity charge  |   |   | 2006      |                                                                                   | $      | 16,774 |   |   |  |   | $ | 11,504 |   |   |  |   |
| estimated                                                                |   |   | 2007-2015 |                                                                                   | $      | 16,769 |   |   | (1 | ) | $ | 11,493 |   |   | (1 | ) |
| Average                                                  cost per KWh    |   |   | 2006      |                                                                                   | $      | 0.065 |   |   |  |   | $ | 0.065 |   |   |  |   |
| estimated                                                                |   |   | 2007-2015 |                                                                                   | $      | 0.072 |   |   | (2 | ) | $ | 0.072 |   |   | (2 | ) |

**Morgan      Stanley Contract.**

|                                     |   | **The                  Morgan Stanley** |                          |
|------------------------------------------|--------|-----------------------------------------|-------------------------------|
|                                     |   | **Contract**                            |                          |
|                                     |   |                                    |                          |
| Capacity                  acquired*      |   |                                    | 1-182                  MW     |   |
| Contract                  period expired |   |                                    | 2006                          |   |
| Annual                  energy charge :  |   |                                    |                               |   |
| 2004                                     |   | $                                       | 11.1                  million |   |
| 2005                                     |   | $                                       | 12.6                  million |   |
| 2006                                     |   | $                                       | 10.3                  million |   |

**Capacity      ranged between 0 and 182 MW over the contract life depending on the scheduled      hour.*

**The      JP Morgan Contract**

**Unit        Purchases.**

|                                               |                                          | **Stony** |                      |
|----------------------------------------------------|-----------------------------------------------|-----------|---------------------------|
|                                               |                                          | **Brook** |                      |
|                                               |  (Dollars                  in thousands) |
| Plant                  capacity                    |                                          |      | 352.0                  MW |   |
| Company's                  share of output         |                                          |      | 4.40                      | % |
| Company's                  annual share of:        |                                          |      |                      |   |
| Interest                                           |                                          | $         | 75                        |   |
| Other                  debt service                |                                          |      | 493                       |   |
| Other                  capacity                    |                                          |      | 511                       |   |
| Total                  annual capacity             |                                          | $         | 1,079                     |   |
| Company's                  share of long-term debt |                                          | $         | 759                       |   |

**Independent          Power Producers.**

**K.          QUARTERLY FINANCIAL INFORMATION (UNAUDITED)**

| Amounts                    in thousands except per share data    |   | **2006                    Quarter ended** |                                            |
|------------------------------------------------------------------|--------|-------------------------------------------|-------------------------------------------------|
|                                                             |   | **March**                                 |                                            | **June** |   | **September** |   | **December** |   | **Total** |   |
|                                                             |   |                                      |                                            |   |   |   |   |   |   |   |   |
| Operating                    revenues                            |   | $                                         | 60,976                                          |   | $ | 59,380 |   | $ | 61,433 |   | $ | 58,687 |   | $ | 240,476 |   |
| Operating                    income                              |   |                                      | 4,958                                           |   |   | 3,366 |   |   | 4,052 |   |   | 3,745 |   |   | 16,121 |   |
| Net                    income-continuing operations              |   |                                      | 3,536                                           |   |   | 2,026 |   |   | 2,831 |   |   | 1,538 |   |   | 9,931 |   |
| Net                    income-discontinued operations            |   |                                      | 76                                              |   |   | - |   |   | 53 |   |   | 63 |   |   | 192 |   |
| Net                    Income applicable to common stock         |   | $                                         | 3,612                                           |   | $ | 2,026 |   | $ | 2,884 |   | $ | 1,601 |   | $ | 10,123 |   |
| Basic                    earnings per share from:                |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                         |   | $                                         | 0.68                                            |   | $ | 0.39 |   | $ | 0.54 |   | $ | 0.28 |   | $ | 1.88 |   |
| Discontinued                    operations                       |   |                                      | 0.01                                            |   |   | - |   |   | 0.01 |   |   | 0.02 |   |   | 0.04 |   |
| Basic                    earnings per share                      |   | $                                         | 0.69                                            |   | $ | 0.39 |   | $ | 0.55 |   | $ | 0.29 |   | $ | 1.92 |   |
| Weighted                    average common shares outstanding    |   |                                      | 5,243                                           |   |   | 5,260 |   |   | 5,280 |   |   | 5,296 |   |   | 5,270 |   |
| Diluted                    earnings per share from:              |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                         |   | $                                         | 0.67                                            |   | $ | 0.38 |   | $ | 0.53 |   | $ | 0.26 |   | $ | 1.85 |   |
| Discontinued                    operations                       |   |                                      | 0.01                                            |   |   | - |   |   | 0.01 |   |   | 0.02 |   |   | 0.04 |   |
| Diluted                    earnings per share                    |   | $                                         | 0.68                                            |   | $ | 0.38 |   | $ | 0.54 |   | $ | 0.28 |   | $ | 1.89 |   |
| Weighted                    average common and common equivalent |   |                                      | 5,319                                           |   |   | 5,323 |   |   | 5,362 |   |   | 5,388 |   |   | 5,348 |   |
| shares                    outstanding                            |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Amounts                    in thousands except per share data    |   |                                      | **2005                    Quarter ended**       |   |
|                                                             |   |                                      | **March**                                  |   |   | **June** |   |   | **September** |   |   | **December** |   |   | **Total** |   |
|                                                             |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                    revenues                            |   | $                                         | 58,248                                          |   | $ | 54,888 |   | $ | 57,584 |   | $ | 75,140 |   | $ | 245,860 |   |
| Operating                    income                              |   |                                      | 4,326                                           |   |   | 3,647 |   |   | 3,839 |   |   | 4,269 |   |   | 16,081 |   |
| Net                    income-continuing operations              |   |                                      | 2,981                                           |   |   | 2,384 |   |   | 2,524 |   |   | 3,157 |   |   | 11,046 |   |
| Net                    income-discontinued operations            |   |                                      | (2                                              | ) |   | (3 | ) |   | 18 |   |   | 121 |   |   | 134 |   |
| Net                    Income applicable to common stock         |   | $                                         | 2,979                                           |   | $ | 2,381 |   | $ | 2,542 |   | $ | 3,278 |   | $ | 11,180 |   |
| Basic                    earnings per share from:                |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                         |   | $                                         | 0.58                                            |   | $ | 0.46 |   | $ | 0.49 |   | $ | 0.58 |   | $ | 2.12 |   |
| Discontinued                    operations                       |   |                                      | -                                               |   |   | - |   |   | - |   |   | 0.03 |   |   | 0.03 |   |
| Basic                    earnings per share                      |   | $                                         | 0.58                                            |   | $ | 0.46 |   | $ | 0.49 |   | $ | 0.61 |   | $ | 2.15 |   |
| Weighted                    average common shares outstanding    |   |                                      | 5,160                                           |   |   | 5,186 |   |   | 5,208 |   |   | 5,224 |   |   | 5,195 |   |
| Diluted                    earnings per share from:              |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                         |   | $                                         | 0.56                                            |   | $ | 0.45 |   | $ | 0.48 |   | $ | 0.60 |   | $ | 2.09 |   |
| Discontinued                    operations                       |   |                                      | -                                               |   |   | - |   |   | - |   |   | 0.03 |   |   | 0.03 |   |
| Diluted                    earnings per share                    |   | $                                         | 0.56                                            |   | $ | 0.45 |   | $ | 0.48 |   | $ | 0.63 |   | $ | 2.12 |   |
| Weighted                    average common and common equivalent |   |                                      | 5,301                                           |   |   | 5,271 |   |   | 5,301 |   |   | 5,318 |   |   | 5,284 |   |
| shares                    outstanding                            |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                             |   |                                      | **2004                    Quarter ended**  |   |
|                                                             |   |                                      | **March**                                  |   |   | **June** |   |   | **September** |   |   | **December** |   |   | **Total** |   |
|                                                             |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating                    revenues                            |   | $                                         | 63,123                                          |   | $ | 54,585 |   | $ | 54,926 |   | $ | 56,182 |   | $ | 228,816 |   |
| Operating                    income                              |   |                                      | 5,019                                           |   |   | 2,776 |   |   | 4,595 |   |   | 3,088 |   |   | 15,478 |   |
| Net                    income-continuing operations              |   |                                      | 3,740                                           |   |   | 1,783 |   |   | 3,392 |   |   | 2,144 |   |   | 11,059 |   |
| Net                    income-discontinued operations            |   |                                      | (6                                              | ) |   | (1 | ) |   | (2 | ) |   | 534 |   |   | 525 |   |
| Net                    Income applicable to common stock         |   | $                                         | 3,734                                           |   | $ | 1,782 |   | $ | 3,390 |   | $ | 2,678 |   | $ | 11,584 |   |
| Basic                    earnings per share from:                |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                         |   | $                                         | 0.74                                            |   | $ | 0.35 |   | $ | 0.67 |   | $ | 0.42 |   | $ | 2.18 |   |
| Discontinued                    operations                       |   |                                      | -                                               |   |   | - |   |   | - |   |   | 0.10 |   |   | 0.10 |   |
| Basic                    earnings per share                      |   | $                                         | 0.74                                            |   | $ | 0.35 |   | $ | 0.67 |   | $ | 0.52 |   | $ | 2.28 |   |
| Weighted                    average common shares outstanding    |   |                                      | 5,046                                           |   |   | 5,072 |   |   | 5,089 |   |   | 5,124 |   |   | 5,083 |   |
| Diluted                    earnings per share from:              |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing                    operations                         |   | $                                         | 0.72                                            |   | $ | 0.34 |   | $ | 0.65 |   | $ | 0.39 |   | $ | 2.10 |   |
| Discontinued                    operations                       |   |                                      | -                                               |   |   | - |   |   | - |   |   | 0.10 |   |   | 0.10 |   |
| Diluted                    earnings per share                    |   | $                                         | 0.72                                            |   | $ | 0.34 |   | $ | 0.65 |   | $ | 0.49 |   | $ | 2.20 |   |
| Weighted                    average common and common equivalent |   |                                      | 5,205                                           |   |   | 5,228 |   |   | 5,251 |   |   | 5,282 |   |   | 5,254 |   |
| shares                    outstanding                            |   |                                      |                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

*Employer's            Accounting for Defined Benefit Pension and Other Postretirement            Plans*

*Internal            Control—Integrated Framework *

----

**ITEM            9.**
**CHANGES            IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL            DISCLOSURE**

**ITEM            9A. CONTROLS AND PROCEDURES**

*Evaluation            of Disclosure Controls and Procedures*

*Management's            Report on Internal Control Over Financial Reporting*

*Changes            in Internal Controls*

----

*Management's            Report on Internal Control Over Financial Reporting*
*Internal            Control—Integrated Framework*

*Internal            Control—Integrated Framework*
*Internal            Control—Integrated Framework*

----

**ITEM            9B. OTHER INFORMATION**

**PART            III**

**ITEM            10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT**

**ITEMS            11, 12, 13 and 14**

**PART            IV**

**ITEM            15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES**

| (1) | Financial                      Statements. See the Index to the Company's financial statements                      set forth                      in Item 8 hereof. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Financial                      Statement Schedules. N/A. |
|-----|----------------------------------------------------------|

| (3) | Exhibits.                      See the Exhibit Index set forth at the end of this Form                      10-K. |
|-----|-------------------------------------------------------------------------------------------------------------------|

----

**SIGNATURES**

| Date:                      March 12, 2007 | GREEN                      MOUNTAIN POWER CORPORATION                                                 |
|-------------------------------------------|-------------------------------------------------------------------------------------------------------|
|                                      | By:                      /s/Christopher L. Dutton                                                     |
|                                      | Christopher                      L. Dutton, PresidentAnd                      Chief Executive Officer |

| **SIGNATURE**                                                                         | **TITLE**                                                                                                                            | **DATE**                                  |
|---------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|
|  /s/Christopher                      L. Dutton                                   |  President,                      Chief Executive                                                                                |  March                      12, 2007 |
| Christopher                      L. Dutton                                            | Officer,                      and Director(principal                      executive officer)                                         |                                      |
| /s/Mary                      G. Powell                                                | Chief                      Operating Officer,                                                                                        | March                      12, 2007       |
| Mary                      G. Powell                                                   | Senior                      Vice President                                                                                           |                                      |
| /s/Dawn                      D. Bugbee                                                | Chief                      Financial Officer,                                                                                        | March                      12, 2007       |
| Dawn                      D. Bugbee                                                   | Vice                      President and Treasurer(principal                      financial officer and principal accounting officer) |                                      |
| *Nordahl                      L. Brue )                                          | Chairman                      of the Board                                                                                           |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *Elizabeth                      A. Bankowski )                                   |                                                                                                                                 |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *William                      H. Bruett )                                        |                                                                                                                                 |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *Merrill                      O. Burns )                                         |                                                                                                                                 |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *David                      R. Coates )                                          | Directors                                                                                                                            |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *Kathleen                      C. Hoyt )                                         |                                                                                                                                 |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *Euclid                      A. Irving )                                         |                                                                                                                                 |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *Marc                      A. vanderHyeyden )                                    |                                                                                                                                 |                                      |
|                                                                                  |                                                                                                                                 |                                      |
| *By:                      /s/Christopher L. Dutton                                    |                                                                                                                                 | March                      12, 2007       |
| Christopher                      L. Dutton(Attorney                      - in - Fact) |                                                                                                                                 |                                      |

----

**ITEM            15(a) 3 and Item 15c. Exhibits**

|    ExhibitNumber |     Description                                                                                                                                                                                                                                                                                     |     Exhibit | SEC                        DocketIncorporatedBy                        referenceOr                        Page filedherewith |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|------------------------------------------------------------------------------------------------------------------------------|
| 3.1                             | Amended                        and Restated Articles of Incorporation dated May 27, 2004                                                                                                                                                                                                                                | 3A                              | Form                        10-QJune                        2004                                                             |
| 3.c                             | By-laws                        of the Company, as amended December 8, 2003                                                                                                                                                                                                                                              | 3                               | Form                        8-KDec.                        8 2003 (1-8291)                                                   |
| 4.b.1                           | Indentures                        of First Mortgage and Deed of Trust dated as of February                        1,                        1955                                                                                                                                                                        | 4.b                             | 2-27300                                                                                                                      |
| 4.b.2                           | First                        Supplemental Indentures dated as of April 1, 1961                                                                                                                                                                                                                                          | 4.b.2                           | 2-75293                                                                                                                      |
| 4.b.3                           | Second                        Supplement Indenture dated as of January 1, 1966                                                                                                                                                                                                                                          | 4.b.3                           | 2-75293                                                                                                                      |
| 4.b.4                           | Third                        Supplemental Indenture dated as of July 1, 1968                                                                                                                                                                                                                                            | 4.b.4                           | 2-75293                                                                                                                      |
| 4.b.5                           | Fourth                        Supplemental Indenture dated as of October 1, 1969                                                                                                                                                                                                                                        | 5.b.5                           | 2-75293                                                                                                                      |
| 4.b.6                           | Fifth                        Supplemental Indenture dated as of December 1, 1973                                                                                                                                                                                                                                        | 4.b.6                           | 2-75293                                                                                                                      |
| 4.b.7                           | Seventh                        Supplemental Indenture dated as of August 1, 1976                                                                                                                                                                                                                                        | 4.b.7                           | 2-99643                                                                                                                      |
| 4.b.8                           | Eighth                        Supplement Indentures dated as of December 1, 1979                                                                                                                                                                                                                                        | 4.b.8                           | 2-99643                                                                                                                      |
| 4.b.9                           | Ninth                        Supplemental Indenture dated as of July 15, 1985                                                                                                                                                                                                                                           | 4.b.9                           | 2-99643                                                                                                                      |
| 4.b.10                          | Tenth                        Supplemental Indenture dated as of June 15, 1989                                                                                                                                                                                                                                           | 4.b.10                          | Form                        10-K 1989 (1-8291)                                                                               |
| 4.b.11                          | Eleventh                        Supplemental Indenture dated as of September 1, 1990                                                                                                                                                                                                                                    | 4.b.11                          | Form                        10-Q Sept. 1990 (1-8291)                                                                         |
| 4.b.12                          | Twelfth                        Supplemental Indenture dated as of March 1, 1992                                                                                                                                                                                                                                         | 4.b.12                          | Form                        10-K 1991 (1-8291)                                                                               |
| 4.b.13                          | Thirteenth                        Supplemental Indenture dated as of March 1, 1992                                                                                                                                                                                                                                      | 4.b.13                          | Form                        10-K 1991 (1-8291)                                                                               |
| 4.b.14                          | Fourteenth                        Supplemental Indenture dated as of November 1, 1993                                                                                                                                                                                                                                   | 4.b.14                          | Form                        10-K 1993 (1-8291)                                                                               |
| 4.b.15                          | Fifteenth                        Supplemental Indenture dated as of November 1, 1993                                                                                                                                                                                                                                    | 4.b.15                          | Form                        10-K 1993 (1-8291)                                                                               |
| 4.b.16                          | Sixteenth                        Supplemental Indenture dated as of December 1, 1995                                                                                                                                                                                                                                    | 4.b.16                          | Form                        10-K 1995 (1-8291)                                                                               |
| 4.b.17                          | Revised                        form of Indenture as filed as an Exhibit to Registration                        Statement No.                        33-59383                                                                                                                                                            | 4.b.17                          | Form                        10-Q Sept. 1995 (1-8291)                                                                         |
| 4.b.18                          | Credit                        Agreement by and among Green Mountain Power, The Bank of                        Nova Scotia,                        State Street Bank and Trust Company, Fleet National Bank,                        and Fleet                        National Bank, as Agent                             | 4.b.18                          | Form                        10-K 1997(1-8291)                                                                                |
| 4.b.18(a)                       | Amendment                        to Exhibit 4.b.18                                                                                                                                                                                                                                                                      | 4.b.18(a)                       | Form                        10-Q Sept. 1998 (1-8291)                                                                         |
| 4.b.19                          | Seventeenth                        Supplemental Indenture dated as of December 1, 2002                                                                                                                                                                                                                                  | 4.b.19                          | Form                        10-K 2002 (1-8291)                                                                               |
| 4.b.20                          | Revolving                        Credit Agreement with Sovereign Bank, Keybank National Association                        and                        Sovereign Bank, as Agent                                                                                                                                          | 4.b.20                          | Form                        8-KJune                        19, 2006                                                          |
| 4.b.21                          | Eighteenth                        Supplemental Indenture dated as of July 1, 2006                                                                                                                                                                                                                                       | 4.b.21                          | Form                        8-KAugust                        3, 2006                                                         |
| 4.b.22                          | Bond                        Purchase Agreement dated as of July 27, 2006 between Green                        Mountain Power                        Corporation and CIGNA Investments, Inc. and Hartford Life                        Insurance                        Company, as purchasers.                           | 4.b.22                          | Form                        8-KAugust                        3, 2006                                                         |
| 10.a                            | Form                        of Insurance Policy issued by Pacific Insurance Company,                        with respect to                        indemnification of Directors and Officers.                                                                                                                           | 10.a                            | 33-8146                                                                                                                      |
| 10.b.1                          | Firm                        Power Contract dated September 16, 1958, between the Company                        and the State                        of Vermont and supplements thereto dated September 19, 1958;                        November 15,                        1958; October 1, 1960 and February 1, 1964 | 13.d                            | 2-27300                                                                                                                      |
| 10.b.2                          | Power                        Contract, dated February 1, 1968, between the Company and                        Vermont Yankee                        Nuclear Power Corporation                                                                                                                                           | 13.d                            | 2-34346                                                                                                                      |
| 10.b.3                          | Amendment,                        dated June 1, 1972, to Power Contract between the Company                        and Vermont                        Yankee Nuclear Power Corporation                                                                                                                                  | 13.f.1                          | 2-49697                                                                                                                      |
| 10.b.3(a)                       | Amendment,                        dated April 15, 1983, to Power Contract between the Company                        and Vermont                        Yankee Nuclear Power Corporation                                                                                                                                | 10.b.3(a)                       | 33-8164                                                                                                                      |
| 10.b.3(b)                       | Additional                        Power Contract, dated February 1, 1984, between the Company                        and Vermont                        Yankee Nuclear Power Corporation                                                                                                                                | 10.b.3(b)                       | 33-8164                                                                                                                      |
| 10.b.4                          | Capital                        Funds Agreement, dated February 1, 1968, between the Company                        and Vermont                        Yankee Nuclear Power Corporation                                                                                                                                  | 13.e                            | 2-34346                                                                                                                      |
| 10.b.5                          | Amendment,                        dated March 12, 1968, to Capital Funds Agreement between                        the Company and                        Vermont Yankee Nuclear Power Corporation                                                                                                                       | 13.f                            | 2-34346                                                                                                                      |
| 10.b.6                          | Guarantee                        Agreement, dated November 5, 1981, of the Company for its                        proportionate                        share of the obligations of Vermont Yankee Nuclear Power                        Corporation under                        a $40 million loan arrangement          | 10.b.6                          | 2-75293                                                                                                                      |
| 10.b.7                          | Three-Party                        Power Agreement among the Company, VELCO and Central Vermont                        Public                        Service Corporation dated November 19, 1969                                                                                                                        | 13.i                            | 2-49697                                                                                                                      |
| 10.b.8                          | Amendment                        to Exhibit 10.b.7, dated June 1, 1981                                                                                                                                                                                                                                                  | 10.b.8                          | 2-75293                                                                                                                      |

----

|    ExhibitNumber |     Description                                                                                                                                              |     Exhibit | SEC                DocketIncorporatedBy                referenceOr                Page filedHerewith |
|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|------------------------------------------------------------------------------------------------------|
| 10.b.9                          | Three-Party                Transmission Agreement among the Company, VELCO and Central Vermont                Public                Service Corporation, dated November 21, 1969 | 10.b.9                          | 2-49697                                                                                              |
| 10.b.10                         | Amendment                to Exhibit 10.b.9, dated June 1, 1981                                                                                                                   | 10.b.10                         | 2-75293                                                                                              |

| 10.b.14 | Agreement                with Central Maine Power Company et al, to enter into joint ownership                of                Wyman plant, dated November 1, 1974                                                                                                                                                                                                                                                                                               | 5.16    | 2-52900 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------|---------|
| 10.b.15 | New                England Power Pool Agreement as amended to November 1,                1975                                                                                                                                                                                                                                                                                                                                                                     | 4.8     | 2-55385 |
| 10.b.16 | Bulk                Power Transmission Contract between the Company and VELCO dated June                1,                1968                                                                                                                                                                                                                                                                                                                                    | 13.v    | 2-49697 |
| 10.b.17 | Amendment                to Exhibit 10.b.16, dated June 1, 1970                                                                                                                                                                                                                                                                                                                                                                                                   | 13.v.i  | 2-49697 |
| 10.b.20 | Power                Sales Agreement, dated August 2, 1976, as amended October 1, 1977,                and                related Transmission Agreement, with the Massachusetts Municipal                Wholesale                Electric Company                                                                                                                                                                                                               | 10.b.20 | 33-8164 |
| 10.b.21 | Agreement                dated October 1, 1977, for Joint Ownership, Construction and Operation                of                the MMWEC Phase I Intermediate Units, dated October 1,                1977                                                                                                                                                                                                                                                       | 10.b.21 | 33-8164 |
| 10.b.28 | Contract                dated February 1, 1980, providing for the sale of firm power and                energy by                the Power Authority of the State of New York to the Vermont Public                Service                Board                                                                                                                                                                                                                   | 10.b.28 | 33-8164 |
| 10.b.30 | Bulk                Power Purchase Contract dated April 7, 1976, between VELCO and the                Company                                                                                                                                                                                                                                                                                                                                                     | 10.b.32 | 2-75293 |
| 10.b.33 | Agreement                amending New England Power Pool Agreement dated as of December 1,                1981,                providing for use of transmission inter-connection between New England                and                Hydro Quebec                                                                                                                                                                                                              | 10.b.33 | 33-8164 |
| 10.b.34 | Phase                I Transmission Line Support Agreement dated as of December 1, 1981,                and                Amendment No. 1 dated as of June 1, 1982, between VETCO and participating                New England utilities for construction, use and support of Vermont                facilities of transmission interconnection between New England and                Hydro                Quebec                                               | 10.b.34 | 33-8164 |
| 10.b.35 | Phase                I Terminal Facility Support Agreement dated as of December 1, 1981,                and                Amendment No. 1 dated as of June 1, 1982, between New England Electric                Transmission Corporation and participating New England utilities                for                construction, use and support of New Hampshire facilities of transmission                interconnection between New England and Hydro Quebec | 10.b.35 | 33-8164 |
| 10.b.36 | Agreement                with respect to use of Quebec Interconnection dated as of December                1,                1981, among participating New England utilities for use of transmission                interconnection between New England and Hydro Quebec                                                                                                                                                                                          | 10.b.36 | 33-8164 |
| 10.b.39 | Vermont                Participation Agreement for Quebec Interconnection dated as of July                15,                1982, between VELCO and participating Vermont utilities for allocation                of                VELCO's rights and obligations as a participating New England utility                in                the transmission interconnection between New England and Hydro                Quebec.                                 | 10.b.39 | 33-8164 |
| 10.d.40 | Vermont                Electric Transmission Company, Inc. Capital Funds Agreement dated                as of                July 15, 1982, between VETCO and VELCO for VELCO to provide capital                to                VETCO for construction of the Vermont facilities of the transmission                interconnection between New England and Hydro Quebec                                                                                        | 10.b.40 | 33-8164 |
| 10.b.41 | VETCO                Capital Funds Support Agreement dated as of July 15, 1982, between                VELCO                and participating Vermont utilities for allocation of VELCO's obligation                to VETCO under the Capital Funds Agreement                                                                                                                                                                                                    | 10.b.41 | 33-8164 |
| 10.b.42 | Energy                Banking Agreement dated March 21, 1983, among Hydro Quebec, VELCO,                NEET                and participating New England utilities acting by and through the                NEPOOL                Management Committee for terms of energy banking between participating                New                England utilities and Hydro Quebec                                                                                    | 10.b.42 | 33-8164 |
| 10.b.43 | Interconnection                Agreement dated March 21, 1983, between Hydro Quebec and participating                New                England utilities acting by and through the NEPOOL Management Committee                for terms and conditions of energy transmission between New England                and                Hydro Quebec                                                                                                                 | 10.b.43 | 33-8164 |
| 10.b.44 | Energy                Contract dated March 21, 1983, between Hydro Quebec and participating                New                England utilities acting by and through the NEPOOL Management Committee                for purchase of surplus energy from Hydro Quebec                                                                                                                                                                                             | 10.b.44 | 33-8164 |
| 10.b.50 | Agreement                for Joint Ownership, Construction and Operation of the Highgate                Transmission Interconnection, dated August 1, 1984, between certain                electric distribution companies, including the Company                                                                                                                                                                                                                 | 10.b.50 | 33-8164 |

----

|    ExhibitNumber |     Description                                                                                                                                                                                                                                                                                                                                                                                                                                                        |     Exhibit | SEC                DocketIncorporatedBy                referenceOr                Page filedHerewith |
|---------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------|------------------------------------------------------------------------------------------------------|
| 10.b.51                         | Highgate                Operating and Management Agreement, dated as of August 1, 1984, among                VELCO and Vermont electric-utility companies, including the                Company                                                                                                                                                                                                                                                                                            | 10.b.51                         | 33-8164                                                                                              |
| 10.b.52                         | Allocation                Contract for Hydro Quebec Firm Power dated July 25, 1984, between                the                State of Vermont and various Vermont electric utilities, including                the                Company                                                                                                                                                                                                                                                 | 10.b.52                         | 33-8164                                                                                              |
| 10.b.53                         | Highgate                Transmission Agreement dated as of August 1, 1984, between the Owners                of                the Project and various Vermont electric distribution                companies                                                                                                                                                                                                                                                                              | 10.b.53                         | 33-8164                                                                                              |
| 10.b.61                         | Agreements                entered in connection with Phase II of the NEPOOL/Hydro Quebec +                450 KV                HVDC Transmission Interconnection                                                                                                                                                                                                                                                                                                                          | 10.b.61                         | 33-8164                                                                                              |
| 10.b.62                         | Agreement                between UNITIL Power Corp. and the Company to sell 23 MW capacity                and                energy from Stony Brook Intermediate Combined Cycle Unit                                                                                                                                                                                                                                                                                                      | 10.b.62                         | 33-8164                                                                                              |
| 10.b.68                         | Firm                Power and Energy Contract dated December 4, 1987, between Hydro Quebec                and                participating Vermont utilities, including the Company, for the purchase                of firm power for up to thirty years                                                                                                                                                                                                                                  | 10.b.68                         | Form                10-K 1992 (1-8291)                                                               |
| 10.b.69                         | Firm                Power Agreement dated as of October 26, 1987, between Ontario Hydro                and                Vermont Department of Public Service                                                                                                                                                                                                                                                                                                                             | 10.b.69                         | Form                10-K 1992 (1-8291)                                                               |
| 10.b.70                         | Firm                Power and Energy Contract dated as of February 23, 1987, between                the                Vermont Joint Owners of the Highgate facilities and Hydro Quebec                for up to                50 MW of capacity                                                                                                                                                                                                                                          | 10.b.70                         | Form                10-K 1992(1-8291)                                                                |
| 10.b.70(a)                      | Amendment                to 10.b.70                                                                                                                                                                                                                                                                                                                                                                                                                                                        | 10.b.70(a)                      | Form                10-K 1992(1-8291)                                                                |
| 10.b.71                         | Interconnection                Agreement dated as of February 23, 1987, between the Vermont Joint                Owners                of the Highgate facilities and Hydro Quebec                                                                                                                                                                                                                                                                                                         | 10.b.71                         | Form                10-K 1992(1-8291)                                                                |
| 10.b.72                         | Participation                Agreement dated as of April 1, 1988, between Hydro Quebec and                participating Vermont utilities, including the Company, implementing                the                purchase of firm power for up to 30 years under the Firm Power and                Energy                Contract dated December 4, 1987 (previously filed with the Company's                Annual Report on Form 10-K for 1987, Exhibit Number                10.b.68    | 10.b.72                         | Form                10-Q June 1988 (1-8291)                                                          |
| 10.b.72(a)                      | Restatement                of the Participation Agreement filed as Exhibit 10.b.72 on Form 10-Q                for                June 1988                                                                                                                                                                                                                                                                                                                                                | 10.b.72(a)                      | Form                10-K 1988(1-8291)                                                                |
| 10.b.77                         | Firm                Power and Energy Contract dated December 29, 1988 between Hydro Quebec                and                participating Vermont utilities, including the Company, for the purchase                of up to 54 MW of firm power and energy                                                                                                                                                                                                                               | 10.b.77                         | Form                10-K 1988(1-8291)                                                                |
| 10.b.78                         | Transmission                Agreement dated December 23, 1988, between the Company and Niagara                Mohawk                Power Corporation (Niagara Mohawk), for Niagara Mohawk to provide                electric                transmission to the Company from Rochester Gas and Electric and Central                Hudson Gas and Electric                                                                                                                                | 10.b.78                         | Form                10-K 1988(1-8291)                                                                |
| 10.b.81                         | Sales                Agreement dated May 24, 1989, between the Town of Hardwick, Hardwick                Electric Department and the Company for the Company to purchase all                of the                output of Hardwick's generation and transmission sources and to provide                Hardwick with all-requirements energy and capacity except for that                provided by the Vermont Department of Public Service or Federal Preference                Power | 10.b.81                         | Form                10-QJune                1989(1-8291)                                             |
| 10.b.82                         | Sales                Agreement dated July 14, 1989, between Northfield Electric Department                and                the Company for the Company to purchase all of the output of Northfield's                generation and transmission sources and to provide Northfield with                all-requirements energy and capacity except for that provided by                the                Vermont Department of Public Service or Federal Preference                Power | 10.b.82                         | Form                10-QJune                1989(1-8291)                                             |
| 10.b.85                         | Power                Purchase and Sale Agreement between Morgan Stanley Capital Group                Inc. and                the Company.                                                                                                                                                                                                                                                                                                                                                  | 10.b.85                         | Form                10-K 1998(1-8291)                                                                |
| 10.b.90                         | Power                Purchase Agreement between Entergy Nuclear Vermont Yankee LLC and                Vermont                Yankee Nuclear Power Corporation                                                                                                                                                                                                                                                                                                                              | 10.b.90                         | Form                10-Q June 2002 (1-8291)                                                          |
| 10.b.91                         | First                Amendment to Purchase Power Agreement listed as Exhibit Number 10.b.90,                between Entergy Nuclear Vermont Yankee LLC and Vermont Yankee Nuclear                Power Corporation                                                                                                                                                                                                                                                                         | 10.b.91                         | Form                10-Q June 2002 (1-8291)                                                          |
| 10.b.92                         | Amendment                to Power Purchase and Sale Agreement between Morgan Stanley Capital                Group,                Inc. and the Company                                                                                                                                                                                                                                                                                                                                     | 10.b.92                         | Form                10-K 2002 (1-8291)                                                               |
| 10.b.93                         | 2001                Amendatory Agreement - Power Supply Agreement between the Company                and                Vermont Yankee Nuclear Power Corporation                                                                                                                                                                                                                                                                                                                           | 10.b.93                         | Form                10-K 2004                                                                        |
| 10.b.94                         | Agreement                and Plan of Merger by and among Northern New England Energy Corporation,                Northstars Merger Subsidiary Corporation and Green Mountain Power                Corporation, dated as of June 21, 2006                                                                                                                                                                                                                                                   | 10.b.94                         | Form                8-KJune                22, 2006                                                  |
| 10.b.95                         | Amended                and Restated Three-Party Transmission Agreement between Vermont Electric                Power Company, Inc., Central Vermont Public Service Corporation,                Green                Mountain Power Corporation, and Vermont Transco LLC.                                                                                                                                                                                                                   | 10.b.95                         | Form                10-Q June 2006                                                                   |
| 10.b.96                         | Amended                and Restated Three-Party Agreement between Vermont Electric Power                Company,                Inc., Central Vermont Public Service Corporation, Green Mountain                Power                Corporation, and Vermont Transco LLC.                                                                                                                                                                                                                 | 10.b.96                         | Form                10-Q June 2006                                                                   |

----

|     | Management                contracts or compensatory plans or arrangements required to be filed                as                exhibits to this Form 10-K to Item 14(c)., all under SEC Docket                1-8291 |     |                                                |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|-----------------------------------------------------|
| 10.d.1b  | Green                Mountain Power Corporation Second Amended and Restated Deferred                Compensation Plan for Directors                                                                                   | 10.d.1b  | Form                10-K 1993                       |
| 10.d.1c  | Green                Mountain Power Corporation Second Amended and Restated Deferred                Compensation Plan for Officers                                                                                    | 10.d.1c  | Form                10-K 1993                       |
| 10.d.1d  | Amendment                No. 93.1 to the Amended and Restated Deferred Compensation Plan for                Officers                                                                                                  | 10.d.1d  | Form                10-K 1993                       |
| 10.d.1e  | Amendment                No. 94.1 to the Amended and Restated Deferred Compensation Plan for                Officers                                                                                                  | 10.d.1e  | Form                10-Q June 1994                  |
| 10.d.2   | Green                Mountain Power Corporation Medical Expense Reimbursement                Plan                                                                                                                     | 10.d.2   | Form                10-K 1991                       |
| 10.d.4   | Green                Mountain Power Corporation Officers’ Insurance Plan                                                                                                                                        | 10.d.4   | Form                10-K 1991                       |
| 10.d.4a  | Green                Mountain Power Corporation Officers' Insurance Plan as                amended                                                                                                                    | 10.d.4a  | Form                10-K 1990                       |
| 10.d.8   | Green                Mountain Power Corporation Officers' Supplemental Retirement                Plan                                                                                                                 | 10.d.8   | Form                10-K 1990                       |
| 10.d.15c | Green                Mountain Power 2000 Stock Incentive Plan                                                                                                                                                         | 10.d.15c | Form                10-K 2001                       |
| 10.d.40  | Change                in Control Agreement with C. L. Dutton                                                                                                                                                          | 10.d.40  | Form                10-K 2003                       |
| 10.d.41  | Change                in Control Agreement with D. J. Rendall, Jr.                                                                                                                                                    | 10.d.41  | Form                10-K 2003                       |
| 10.d.42  | Change                in Control Agreement with R. J. Griffin                                                                                                                                                         | 10.d.42  | Form                10-K 2003                       |
| 10.d.43  | Change                in Control Agreement with W. S. Oakes                                                                                                                                                           | 10.d.43  | Form                10-K 2003                       |
| 10.d.44  | Change                in Control Agreement with M. G. Powell                                                                                                                                                          | 10.d.44  | Form                10-K 2003                       |
| 10.d.45  | Change                in Control Agreement with R. E. Rogan                                                                                                                                                           | 10.d.45  | Form                10-K 2005                       |
| 10.d.46  | Deferred                Stock Unit Agreement with D. J. Rendall, Jr.                                                                                                                                                  | 10.d.46  | Form                10-K 2003                       |
| 10.d.47  | Deferred                Stock Unit Agreement with C. L. Dutton                                                                                                                                                        | 10.d.47  | Form                10-K 2003                       |
| 10.d.48  | Deferred                Stock Unit Agreement with S. C. Terry                                                                                                                                                         | 10.d.48  | Form                10-K 2003                       |
| 10.d.49  | Deferred                Stock Unit Agreement with R. J. Griffin                                                                                                                                                       | 10.d.49  | Form                10-K 2003                       |
| 10.d.50  | Deferred                Stock Unit Agreement with W. S. Oakes                                                                                                                                                         | 10.d.50  | Form                10-K 2003                       |
| 10.d.51  | Deferred                Stock Unit Agreement with M. G. Powell                                                                                                                                                        | 10.d.51  | Form                10-K 2003                       |
| 10.d.52  | Deferred                Stock Unit Agreement with E. A. Bankowski                                                                                                                                                     | 10.d.52  | Form                10-K 2003                       |
| 10.d.53  | Deferred                Stock Unit Agreement with N. L. Brue                                                                                                                                                          | 10.d.53  | Form                10-K 2003                       |
| 10.d.54  | Deferred                Stock Unit Agreement with W. H. Bruett                                                                                                                                                        | 10.d.54  | Form                10-K 2003                       |
| 10.d.55  | Deferred                Stock Unit Agreement with M. O. Burns                                                                                                                                                         | 10.d.55  | Form                10-K 2003                       |
| 10.d.56  | Deferred                Stock Unit Agreement with D. R. Coates                                                                                                                                                        | 10.d.56  | Form                10-K 2003                       |
| 10.d.57  | Deferred                Stock Unit Agreement with E. A. Irving                                                                                                                                                        | 10.d.57  | Form                10-K 2003                       |
| 10.d.58  | Director                Deferral Agreement with E. A. Bankowski                                                                                                                                                       | 10.d.58  | Form                10-K 2003                       |
| 10.d.59  | Director                Deferral Agreement with M. O. Burns                                                                                                                                                           | 10.d.59  | Form                10-K 2003                       |
| 10.d.60  | Director                Deferral Agreement with D. R. Coates                                                                                                                                                          | 10.d.60  | Form                10-K 2003                       |
| 10.d.61  | Director                Deferral Agreement with E. A. Irving                                                                                                                                                          | 10.d.61  | Form                10-K 2003                       |
| 10.d.62  | Deferred                Stock Unit Agreement with E. A. Bankowski                                                                                                                                                     | 10.d.62  | Form                10-Q June 2004                  |
| 10.d.63  | Deferred                Stock Unit Agreement with N. L. Brue                                                                                                                                                          | 10.d.63  | Form                10-Q June 2004                  |
| 10.d.64  | Deferred                Stock Unit Agreement with W. H. Bruett                                                                                                                                                        | 10.d.64  | Form                10-Q June 2004                  |
| 10.d.65  | Deferred                Stock Unit Agreement with M. O. Burns                                                                                                                                                         | 10.d.65  | Form                10-Q June 2004                  |
| 10.d.66  | Deferred                Stock Unit Agreement with D. R. Coates                                                                                                                                                        | 10.d.66  | Form                10-Q June 2004                  |
| 10.d.67  | Deferred                Stock Unit Agreement with K. C. Hoyt                                                                                                                                                          | 10.d.67  | Form                10-Q June 2004                  |
| 10.d.68  | Deferred                Stock Unit Agreement with E. A. Irving                                                                                                                                                        | 10.d.68  | Form                10-Q June 2004                  |
| 10.d.69  | Deferred                Stock Unit Agreement with M. A. vanderHeyden                                                                                                                                                  | 10.d.69  | Form                10-QJune                2004    |
| 10.d.70  | Director                Deferral Agreement with E. A. Bankowski                                                                                                                                                       | 10.d.70  | Form                8-KDec.                2, 2004  |
| 10.d.71  | Director                Deferral Agreement with M. O. Burns                                                                                                                                                           | 10.d.71  | Form                8-KDec.                2, 2004  |
| 10.d.72  | Director                Deferral Agreement with E. A. Irving                                                                                                                                                          | 10.d.72  | Form                8-KDec.                2, 2004  |
| 10.d.73  | Officer                Deferral Agreement with S. C. Terry                                                                                                                                                            | 10.d.73  | Form                8-KDec.                2, 2004  |
| 10.d.74  | Officer                Deferral Agreement with W. S. Oakes                                                                                                                                                            | 10.d.74  | Form                8-KDec.                2, 2004  |
| 10.d.75  | Board                of Directors' Resolutions Amending Deferred Compensation                Plan                                                                                                                     | 10.d.75  | Form                8-KDec.                30, 2004 |
| 10.d.76  | Officer                Compensation Table                                                                                                                                                                             | 10.d.76  | Form                10-K 2006                       |
| 10.d.77  | 2006                Management Compensation Plan Description                                                                                                                                                          | 10.d.77  | Form                10-K 2006                       |

----

|     | Management                contracts or compensatory plans or arrangements required to be filed                as                exhibits to this Form 10-K to Item 14(c)., all under SEC Docket                1-8291 |     |                                                |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|-----------------------------------------------------|
| 10.d.1b  | Green                Mountain Power Corporation Second Amended and Restated Deferred                Compensation Plan for Directors                                                                                   | 10.d.1b  | Form                10-K 1993                       |
| 10.d.1c  | Green                Mountain Power Corporation Second Amended and Restated Deferred                Compensation Plan for Officers                                                                                    | 10.d.1c  | Form                10-K 1993                       |
| 10.d.1d  | Amendment                No. 93.1 to the Amended and Restated Deferred Compensation Plan for                Officers                                                                                                  | 10.d.1d  | Form                10-K 1993                       |
| 10.d.1e  | Amendment                No. 94.1 to the Amended and Restated Deferred Compensation Plan for                Officers                                                                                                  | 10.d.1e  | Form                10-Q June 1994                  |
| 10.d.2   | Green                Mountain Power Corporation Medical Expense Reimbursement                Plan                                                                                                                     | 10.d.2   | Form                10-K 1991                       |
| 10.d.4   | Green                Mountain Power Corporation Officers’ Insurance Plan                                                                                                                                        | 10.d.4   | Form                10-K 1991                       |
| 10.d.4a  | Green                Mountain Power Corporation Officers' Insurance Plan as                amended                                                                                                                    | 10.d.4a  | Form                10-K 1990                       |
| 10.d.8   | Green                Mountain Power Corporation Officers' Supplemental Retirement                Plan                                                                                                                 | 10.d.8   | Form                10-K 1990                       |
| 10.d.15c | Green                Mountain Power 2000 Stock Incentive Plan                                                                                                                                                         | 10.d.15c | Form                10-K 2001                       |
| 10.d.40  | Change                in Control Agreement with C. L. Dutton                                                                                                                                                          | 10.d.40  | Form                10-K 2003                       |
| 10.d.41  | Change                in Control Agreement with D. J. Rendall, Jr.                                                                                                                                                    | 10.d.41  | Form                10-K 2003                       |
| 10.d.42  | Change                in Control Agreement with R. J. Griffin                                                                                                                                                         | 10.d.42  | Form                10-K 2003                       |
| 10.d.43  | Change                in Control Agreement with W. S. Oakes                                                                                                                                                           | 10.d.43  | Form                10-K 2003                       |
| 10.d.44  | Change                in Control Agreement with M. G. Powell                                                                                                                                                          | 10.d.44  | Form                10-K 2003                       |
| 10.d.45  | Change                in Control Agreement with R. E. Rogan                                                                                                                                                           | 10.d.45  | Form                10-K 2005                       |
| 10.d.46  | Deferred                Stock Unit Agreement with D. J. Rendall, Jr.                                                                                                                                                  | 10.d.46  | Form                10-K 2003                       |
| 10.d.47  | Deferred                Stock Unit Agreement with C. L. Dutton                                                                                                                                                        | 10.d.47  | Form                10-K 2003                       |
| 10.d.48  | Deferred                Stock Unit Agreement with S. C. Terry                                                                                                                                                         | 10.d.48  | Form                10-K 2003                       |
| 10.d.49  | Deferred                Stock Unit Agreement with R. J. Griffin                                                                                                                                                       | 10.d.49  | Form                10-K 2003                       |
| 10.d.50  | Deferred                Stock Unit Agreement with W. S. Oakes                                                                                                                                                         | 10.d.50  | Form                10-K 2003                       |
| 10.d.51  | Deferred                Stock Unit Agreement with M. G. Powell                                                                                                                                                        | 10.d.51  | Form                10-K 2003                       |
| 10.d.52  | Deferred                Stock Unit Agreement with E. A. Bankowski                                                                                                                                                     | 10.d.52  | Form                10-K 2003                       |
| 10.d.53  | Deferred                Stock Unit Agreement with N. L. Brue                                                                                                                                                          | 10.d.53  | Form                10-K 2003                       |
| 10.d.54  | Deferred                Stock Unit Agreement with W. H. Bruett                                                                                                                                                        | 10.d.54  | Form                10-K 2003                       |
| 10.d.55  | Deferred                Stock Unit Agreement with M. O. Burns                                                                                                                                                         | 10.d.55  | Form                10-K 2003                       |
| 10.d.56  | Deferred                Stock Unit Agreement with D. R. Coates                                                                                                                                                        | 10.d.56  | Form                10-K 2003                       |
| 10.d.57  | Deferred                Stock Unit Agreement with E. A. Irving                                                                                                                                                        | 10.d.57  | Form                10-K 2003                       |
| 10.d.58  | Director                Deferral Agreement with E. A. Bankowski                                                                                                                                                       | 10.d.58  | Form                10-K 2003                       |
| 10.d.59  | Director                Deferral Agreement with M. O. Burns                                                                                                                                                           | 10.d.59  | Form                10-K 2003                       |
| 10.d.60  | Director                Deferral Agreement with D. R. Coates                                                                                                                                                          | 10.d.60  | Form                10-K 2003                       |
| 10.d.61  | Director                Deferral Agreement with E. A. Irving                                                                                                                                                          | 10.d.61  | Form                10-K 2003                       |
| 10.d.62  | Deferred                Stock Unit Agreement with E. A. Bankowski                                                                                                                                                     | 10.d.62  | Form                10-Q June 2004                  |
| 10.d.63  | Deferred                Stock Unit Agreement with N. L. Brue                                                                                                                                                          | 10.d.63  | Form                10-Q June 2004                  |
| 10.d.64  | Deferred                Stock Unit Agreement with W. H. Bruett                                                                                                                                                        | 10.d.64  | Form                10-Q June 2004                  |
| 10.d.65  | Deferred                Stock Unit Agreement with M. O. Burns                                                                                                                                                         | 10.d.65  | Form                10-Q June 2004                  |
| 10.d.66  | Deferred                Stock Unit Agreement with D. R. Coates                                                                                                                                                        | 10.d.66  | Form                10-Q June 2004                  |
| 10.d.67  | Deferred                Stock Unit Agreement with K. C. Hoyt                                                                                                                                                          | 10.d.67  | Form                10-Q June 2004                  |
| 10.d.68  | Deferred                Stock Unit Agreement with E. A. Irving                                                                                                                                                        | 10.d.68  | Form                10-Q June 2004                  |
| 10.d.69  | Deferred                Stock Unit Agreement with M. A. vanderHeyden                                                                                                                                                  | 10.d.69  | Form                10-QJune                2004    |
| 10.d.70  | Director                Deferral Agreement with E. A. Bankowski                                                                                                                                                       | 10.d.70  | Form                8-KDec.                2, 2004  |
| 10.d.71  | Director                Deferral Agreement with M. O. Burns                                                                                                                                                           | 10.d.71  | Form                8-KDec.                2, 2004  |
| 10.d.72  | Director                Deferral Agreement with E. A. Irving                                                                                                                                                          | 10.d.72  | Form                8-KDec.                2, 2004  |
| 10.d.73  | Officer                Deferral Agreement with S. C. Terry                                                                                                                                                            | 10.d.73  | Form                8-KDec.                2, 2004  |
| 10.d.74  | Officer                Deferral Agreement with W. S. Oakes                                                                                                                                                            | 10.d.74  | Form                8-KDec.                2, 2004  |
| 10.d.75  | Board                of Directors' Resolutions Amending Deferred Compensation                Plan                                                                                                                     | 10.d.75  | Form                8-KDec.                30, 2004 |
| 10.d.76  | Officer                Compensation Table                                                                                                                                                                             | 10.d.76  | Form                10-K 2006                       |
| 10.d.77  | 2006                Management Compensation Plan Description                                                                                                                                                          | 10.d.77  | Form                10-K 2006                       |

----

|     | Management                contracts or compensatory plans or arrangements required to be filed                as                exhibits to this Form 10-K to Item 14(c)., all under SEC Docket                1-8291                                                                                                                                                                  |     |                                                     |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|----------------------------------------------------------|
| 10.d.79  | Green                Mountain Power Corporations New Supplemental Retirement Plan with                C. L.                Dutton                                                                                                                                                                                                                                                      | 10.d.79  | Form                8-K 2005July                29, 2005 |
| 10.d.80  | Green                Mountain Power Corporations New Supplemental Retirement Plan with                R. J.                Griffin                                                                                                                                                                                                                                                     | 10.d.80  | Form                8-K 2005July                29, 2005 |
| 10.d.81  | Green                Mountain Power Corporations New Supplemental Retirement Plan with                W. S.                Oakes                                                                                                                                                                                                                                                       | 10.d.81  | Form                8-K 2005July                29, 2005 |
| 10.d.82  | Green                Mountain Power Corporations New Supplemental Retirement Plan with                M. G.                Powell                                                                                                                                                                                                                                                      | 10.d.82  | Form                8-K 2005July                29, 2005 |
| 10.d.83  | Green                Mountain Power Corporations New Supplemental Retirement Plan with                D. J.                Rendall, Jr.                                                                                                                                                                                                                                                | 10.d.83  | Form                8-K 2005July                29, 2005 |
| 10.d.84  | Green                Mountain Power Corporations Officers' Supplemental Retirement Plan                with S.                C. Terry                                                                                                                                                                                                                                                 | 10.d.84  | Form                10-K 2004                            |
| 10.d.86  | Green                Mountain Power Corporation 2004 Stock Incentive Plan                                                                                                                                                                                                                                                                                                              | 10.d.86  | Form                10-K 2005                            |
| 10.d.87  | Green                Mountain Power Corporation Third Amended and Restated Deferred                Compensation Plan for Certain Officers                                                                                                                                                                                                                                              | 10.d.87  | Form                10-K 2004                            |
| 10.d.88  | 2005                Officer Deferred Stock Unit Agreement with Christopher L.                Dutton                                                                                                                                                                                                                                                                                    | 10.d.88  | Form                8-KMay                27, 2005       |
| 10.d.89  | 2005                Officer Deferred Stock Unit Agreement with Robert J.                Griffin                                                                                                                                                                                                                                                                                        | 10.d.89  | Form                8-KMay                27, 2005       |
| 10.d.90  | 2005                Officer Deferred Stock Unit Agreement with Walter S. Oakes                                                                                                                                                                                                                                                                                                         | 10.d.90  | Form                8-KMay                27, 2005       |
| 10.d.91  | 2005                Officer Deferred Stock Unit Agreement with Mary G. Powell                                                                                                                                                                                                                                                                                                          | 10.d.91  | Form                8-KMay                27, 2005       |
| 10.d.92  | 2005                Officer Deferred Stock Unit Agreement with Donald J. Rendall,                Jr.                                                                                                                                                                                                                                                                                   | 10.d.92  | Form                8-KMay                27, 2005       |
| 10.d.93  | 2005                Officer Deferred Stock Unit Agreement with Stephen C.                Terry                                                                                                                                                                                                                                                                                         | 10.d.93  | Form                8-KMay                27, 2005       |
| 10.d.94  | Officer                Deferred Stock Unit Agreement with Stephen C. Terry                                                                                                                                                                                                                                                                                                             | 10.d.94  | Form                8-KMay                27, 2005       |
| 10.d.95  | 2005                Supplemental Retirement Plan with Stephen C. Terry                                                                                                                                                                                                                                                                                                                 | 10.d.95  | Form                8-KMay                27, 2005       |
| 10.d.96  | 2005                Director Deferred Stock Unit Agreement with Elizabeth A.                Bankowski                                                                                                                                                                                                                                                                                  | 10.d.96  | Form                8-KJuly                26, 2005      |
| 10.d.97  | 2005                Director Deferred Stock Unit Agreement with Nordahl L.                Brue                                                                                                                                                                                                                                                                                         | 10.d.97  | Form                8-KJuly                26, 2005      |
| 10.d.98  | 2005                Director Deferred Stock Unit Agreement with William H.                Bruett                                                                                                                                                                                                                                                                                       | 10.d.98  | Form                8-KJuly                26, 2005      |
| 10.d.99  | 2005                Director Deferred Stock Unit Agreement with Merrill O.                Burns                                                                                                                                                                                                                                                                                        | 10.d.99  | Form                8-KJuly                26, 2005      |
| 10.d.100 | 2005                Director Deferred Stock Unit Agreement with David R.                Coates                                                                                                                                                                                                                                                                                         | 10.d.100 | Form                8-KJuly                26, 2005      |
| 10.d.101 | 2005                Director Deferred Stock Unit Agreement with Kathleen C.                Hoyt                                                                                                                                                                                                                                                                                        | 10.d.101 | Form                8-KJuly                26, 2005      |
| 10.d.102 | 2005                Director Deferred Stock Unit Agreement with Euclid A.                Irving                                                                                                                                                                                                                                                                                        | 10.d.102 | Form                8-KJuly                26, 2005      |
| 10.d.103 | 2005                Director Deferred Stock Unit Agreement with Marc A.                vanderHeyden                                                                                                                                                                                                                                                                                    | 10.d.103 | Form                8-KJuly                26, 2005      |
| 10.d.104 | Director                Deferral Agreement with David R. Coates                                                                                                                                                                                                                                                                                                                        | 10.d.104 | Form                8-KJanuary                4, 2006    |
| 10.d.105 | Change                in Control Agreement with D. D. Bugbee                                                                                                                                                                                                                                                                                                                           | 10.d.105 | Form                8-KMarch                7, 2006      |
| 10.d.106 | Green                Mountain Power Corporations Supplemental Retirement Plan with D.                D.                Bugbee                                                                                                                                                                                                                                                          | 10.d.106 | Form                8-KMarch                7, 2006      |
| 10.d.107 | Amendment                to Change in Control Agreement with R. J. Griffin                                                                                                                                                                                                                                                                                                             | 10.d.107 | Form                8-KMarch                7, 2006      |
| 10.d.108 | Form                of 2006 Officer Deferred Stock Unit Agreement with C. L. Dutton,                D. D.                Bugbee, R. J. Griffin, W. S. Oakes, M. G. Powell, D. J. Rendall,                Jr., and                R. E. Rogan                                                                                                                                           | 10.d.108 | Form                8-KMay                23, 2006       |
| 10.d.109 | Rights                Agreement, dated June 17, 1998, between Green Mountain Power Corporation                and Mellon Investor Services, LLC (f/k/a ChaseMellon Shareholders                Services, L.L.C.)(incorporated by reference from Exhibit 4.a.1 from                the                Company’s Current Report on Form 8-K filed on June 19,                1998) | 10.d.109 | Form                8-KJune                22, 2006      |
| 10.d.110 | Amendment                to Rights Agreement, Dated June 21, 2006, between Green Mountain                Power                Corporation and Mellon Investor Services LLC (f/k/a ChaseMellon                Shareholder Services, L.L.C.)                                                                                                                                             | 10.d.110 | Form                8-KJune                22, 2006      |
| 10.d.111 | Resolutions                of the Compensation Committee of the Board of Directors of the Company                adopted on June 21, 2006, approving certain actions under the 2000                and                2004 Stock Incentive Plans                                                                                                                                       | 10.d.111 | Form                8-KJune                22, 2006      |
| 10.d.112 | Form                of consent provided by the Company’s executive officers and directors in                connection with Awards issued under the 2000 and 2004 Stock Incentive                Plans                                                                                                                                                                           | 10.d.112 | Form                8-KJune                22, 2006      |
| 10.d.113 | Resolutions                of the Compensation Committee of the Board of Directors of the Company                adopted on June 21, 2006, amending certain executive Supplemental                Retirement Plans                                                                                                                                                                     | 10.d.113 | Form                8-KJune                22, 2006      |

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|     | Management                contracts or compensatory plans or arrangements required to be filed                as                exhibits to this Form 10-K to Item 14(c)., all under SEC Docket                1-8291                                                                                                                                     |     |                                                   |
|----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|--------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                                                                      |     |                                                   |
| 10.d.114 | Form                of consent provided by the Company’s executive officers in connection with                the Amendments to the Supplemental Retirement Plans                                                                                                                                                                                   | 10.d.114 | Form                8-KJune                22, 2006    |
| 10.d.115 | Form                of 2006 Director Deferred Stock Unit Agreement                                                                                                                                                                                                                                                                                        | 10.d.115 | Form                8-KJuly                25, 2006    |
| 10.d.116 | Resolutions                of the Compensation Committee of the Board of Directors of the Company                adopted on October 30, 2006, approving certain actions under the                Company’s                2004 Stock Incentive Plan                                                                                                 | 10.d.116 | Form                8-KNovember                1, 2006 |
| 10.d.117 | Form                of consent provided by the Company’s executive officers and directors in                connection with DSUs issued under the Company’s 2004 Stock Incentive                Plan                                                                                                                                          | 10.d.117 | Form                8-KNovember                1, 2006 |
| 10.d.118 | Resolutions                of the Board of Directors of Green Mountain Power Corporation adopted                on                December 4, 2006 amending (effective as of January 1, 2007) the Company’s                Deferred Compensation Plan for Certain Officers                                                                          | 10.d.118 | Form                8-KDecember                7, 2006 |
|     |                                                                                                                                                                                                                                                                                                                                                      |     |                                                   |
| 14       | Green                Mountain Power Corporation's Code of Ethics and Conduct dated October                6,                2003                                                                                                                                                                                                                          | 14       | Form                10-K 2004                          |
|     |                                                                                                                                                                                                                                                                                                                                                      |     |                                                   |
| 23.1     | Consent                of Deloitte and Touche LLP                                                                                                                                                                                                                                                                                                         | 23.1     |                                                   |
| 24       | Limited                Power of Attorney                                                                                                                                                                                                                                                                                                                  | 24       |                                                   |
|     |                                                                                                                                                                                                                                                                                                                                                      |     |                                                   |
| 31.1     | Certification                of Christopher L. Dutton, President and Chief Executive Officer,                pursuant                to Rules 13a-14(a) and Rule 15d-14(a) promulgated under the Securities                Act                of 1934, as Adopted pursuant to Section 302 of the Sarbanes-Oxley                Act of                2002 | 31.1     | Form                10-K 2006                          |
| 31.2     | Certification                of Dawn D. Bugbee, Chief Financial Officer, Vice President and Treasurer                pursuant to Rules 13a-14(a) and Rule 15d-14(a) promulgated under                the                Securities Act of 1934, as Adopted pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002                       | 31.2     | Form                10-K 2006                          |
| 32.1     | Certification                of Christopher L. Dutton, President and Chief Executive Officer,                Pursuant                to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of                the                Sarbanes-Oxley Act of 2002                                                                                        | 32.1     | Form                10-K 2006                          |
| 32.2     | Certification                of Dawn D. Bugbee, Chief Financial Officer, Vice President and Treasurer                Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002                                                                                               | 32.2     | Form                10-K 2006                          |

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