2. GRI SUMMARY

2.1 REPORT SCOPE AND BOUNDARIES

Green Mountain Power elected to draft this annual sustainability report using the GRI 2006 Reporting Guidelines (G3). The sections and content of this report were based on the Economic, Environmental, Social, Labor Practices and Decent Work, Human Rights, Society, and Product Responsibility Indicators of GRI. The report also addresses the G3's Strategy and Profile Standard Disclosures. During report preparation, we considered GRI's Draft Electric Utility Sector Supplement. While we did not choose to include all of these in this year's report, next year's report may include more of these indicators. To facilitate comparison with the GRI indicators, this report references specific indicators throughout, as well as including a GRI index in Section 9, which explains why certain indicators are not applicable to us or are not addressed due to data deficiencies.

There is very little change in the scope and boundary of this report compared to last year's report. This year's report reports on the same locations, facilities, and operations of Green Mountain Power as last year's report. SD 3.6, 3.8, and 3.11

It is important to note that our report continues to evolve. This is the fourth year that we have prepared a sustainability report based on the GRI guidelines, and the past two years have been more of a challenge because we are determining the best ways to address the G3 guidelines, including some of the Electric Utility Sector Supplement Draft Indicators. SD 3.7

Questions on this report should be directed to: Dorothy Schnure, Manager of Corporate Communications, Green Mountain Power, Colchester, Vermont; (802) 655-8418, or schnure@greenmountainpower.biz. SD 3.4

2.2 REPORT CONTENT

The content of this year's report represents an update of the information in the 2006 report. Most of the updated information pertains to quantitative data, and many of the qualitative descriptions in this report have not been changed since last year's report. The prioritization of report topics was based on materiality and stakeholder feedback. In some instances, we have included more information on a particular topic (e.g., nuclear power) and less information on some of our programs that were described in detail in previous years' reports (e.g., our wellness program). In some instances, we encourage readers to refer to previous years' reports for more information. SD 3.5 There have only been a few very minor information corrections to the information in previous years' reports. These corrections are noted where they occur. SD 3.10

2.3 HOW THIS YEAR'S REPORT IS DIFFERENT

In order to address various stakeholder comments that have arisen from previous years' reports, as well as the G3 guidelines, this year's report focuses on material issues facing the Company, the Company's sustainability strategies, and how the Company's sustainability performance has changed over time. You will notice that the data contained in this year's report is provided as a comparison with previous years, which enables Green Mountain Power to consider where we are and what we want to achieve in the future. It also enhances the accuracy and transparency of our report for our stakeholders, so that everyone can see where we've succeeded and where we may fall short.

The data in this year's report update is up-to-date through the 2007 calendar year, although much of the data is compared to, and trended with, data from several previous years. Also, where appropriate, we have included information and updates from 2008 to add relevancy to report topics. Last year's report, which addressed 2006 and some of 2007, was published in November 2007. SD 3.1 - 3.3

2.4 STAKEHOLDER ENGAGEMENT

2.4.1 Process

Green Mountain Power considers stakeholder engagement to be a crucial component of the sustainability reporting process. Previous years' reports have benefited from extensive stakeholder review. Fortunately, we have access to a wide variety of feedback from various stakeholders. Ceres convenes stakeholder reviews each year to review the draft content of our sustainability reports. Stakeholders included in these reviews include other companies within our industry (i.e., utilities), Non-Governmental Organizations (NGOs), and representatives from socially responsible investment groups. We also benefit from a wealth of input, expertise, and critique from our partners at Ceres.

In 2007, we expanded our stakeholder engagement by convening several employee stakeholder groups. Diverse groups of employees were brought together to discuss various issues, including (but not limited to):

Sustainability.
Green Mountain Power's sustainability programs and reports.
Environmental impacts of different types of power generation.
Merger with Gaz Métro.
Overall employee happiness including workplace and benefits.
How Green Mountain Power interacts with the community.
SD 4.15 and 4.16; EU 18.

2.4.2 Results

The stakeholder groups included employees with less than 1 and up to 27 years with the Company. Some employees worked in Substation Operations, while others were members of Company Management, Credit, Call Center (customer service), Finance, IT, Engineering, Control Center, Field, and T&D/Operations.

The results of the stakeholder engagement sessions were very interesting and are reflected throughout this report. In some cases, Green Mountain Power was already aware of employee concerns and has created new programs (or revised existing programs) to address these concerns. However, in some cases, this year's report will serve as starting point for considering how to address specific employee concerns raised during the stakeholder engagement sessions. SD 4.17

The following are a few excerpts of issues/concerns raised and comments provided. Comments are organized by topic and although they represent the employees' statements, they are not direct quotes. SD 4.17

2.4.2.1 Environmental Footprint of Operations

Green Mountain Power is doing well with respect to environmental sustainability — we use biodiesel, own 9 hybrid vehicles, and employees are encouraged to carpool.
The company is good at conserving energy, but paper waste still exists in the offices.
We have solar panels installed at one of the substations, but they are inoperable. (Note — panel is a battery charger only.)
Remote district offices aren't as involved in sustainability and other initiatives as much as the Colchester headquarters.

2.4.2.2 Types of Power Generation

"Cow power" (i.e., methane digesters) should take off soon in Vermont — there are a lot of cows.
Green Mountain Power should encourage net metering as much as possible.
Hydro power is clean, but some people have problems with "big" hydro plants for environmental and social reasons.
There aren't enough nuclear facilities — there should be more, but they take so long to license and build.
It is hard when people push back about wind power, particularly people with 3,000 square foot houses who have views to protect. They shouldn't complain about it.
The waste produced by nuclear power is not worth it.
Everything has a risk, so you have to weigh the risks and balance the risks by reducing consumption.

2.4.2.3 Customers and Community

Some customers complain that they need more information on energy efficiency.
Green Mountain Power should be more vocal about community events like Green Up Day or cleaning the river. We always tell the community after we do it, but if we tell them before, maybe they'll participate.
Customers are happy with Green Mountain Power, particularly the line workers. This makes employees proud.
Employees like the fact that Green Mountain Power helps other power companies when they're in need, through mutual aid.

2.4.2.4 Employee Benefits

Green Mountain Power gives employees flex-time, which is really important. Also, the Company allows employees to accommodate volunteer work into their work schedule.
The healthy snacks in the office are greatly appreciated and make employees feel that the company cares for their health. There are no candy or junk-food vending machines in the offices.
Good vacation time and health benefits — eye care and dental, too.
There will be no defined benefit pension plan for new employees starting in 2008 — this is concerning to the longer-term employees. (Please note that employees hired on or after 1/1/08 were offered an enhanced Company contribution to their 401(k) in place of eligibility to participate in the defined benefit plan.)
Trust that Green Mountain Power will find a way to replace the employee stock options. But who knew when we got a stock option at $7, it would go to $35? (Please note that a revised plan was introduced in September 2007 whereby employees received a cash incentive designed to provide performance incentives similar to stock awards.)

2.4.2.5 Gaz Métro Merger

Some employees have a "wait and see" attitude about the Gaz Métro merger — what will happen if Gaz Métro purchases a competitor of Green Mountain Power's?
The merger really was a non-event and has been seamless. We're waiting for French lessons!

Please note that the employee stakeholder sessions are only one source of stakeholder data that Green Mountain Power relies on. Other stakeholder input comes from community energy forums, and Ceres- convened stakeholder interactions, as well as numerous other community and stakeholder events that occur throughout the year.

2.4.3 Report Audience

Our primary focus for this effort is to create accountability through an accurate, structured report that provides a transparent view of our successes, communicates our challenges, and identifies areas for improvement. This document is intended for a diverse audience that includes customers, shareholders, and anyone else interested in learning about Green Mountain Power.

We hope that this report is received by a wide variety of our stakeholders, including community members, concerned citizens, employees, and other groups. Part of the reason we have elected to publish most of this report on our website is so that readers can access individual sections easily and select the topics that interest them the most. We have also elicited stakeholder feedback, which helps us develop better ways of ensuring that the report remains accessible, readable, and interesting. SD 3.5

2.5 ASSURANCE

Woodard & Curran, an environmental consulting firm based in Portland, Maine, worked closely with Green Mountain Power to prepare this report. The report preparation process involved Woodard & Curran assisting Green Mountain Power with a materially determination, stakeholder engagement, gathering information and data, and serving as the repository for all of the data and information necessary to respond to the GRI indicators. Woodard & Curran also acted as the entity that convened the stakeholder engagement sessions, prompted discussion, and gleaned issues to add to the GRI report. Woodard & Curran analyzed the data and information closely to: compare it with the G3 guidelines; trend it with data from previous years' reports; challenge any inaccuracies or discrepancies; consider the input of stakeholders; critically analyze information in light of the materiality analysis; and assess the need for clarification of additional information from Green Mountain Power. In this way, Woodard & Curran was able to provide limited assurance services to Green Mountain Power. Assurance-type activities were performed based on several different protocols, including the GRI G3 Guidelines and AccountAbility's Assurance Standard AA1000. Woodard & Curran and Green Mountain Power recognize the limitations inherent in seeking assurance from a consultant who is primarily responsible for preparation of the sustainability report. Green Mountain Power is currently exploring ways to seek fully independent, impartial, third-party assurance for its Sustainability Report in accordance with established guidelines and criteria. Woodard & Curran has been assisting Green Mountain Power with strategic sustainability services since 2005 and is committed to ensuring that the sustainability reporting remains accurate, transparent, considerate of stakeholder needs, and a true reflection of Green Mountain Power's challenges and successes as it travels the path towards sustainability.

It should also be noted that certain data elements included in this report have already been audited/verified by external third parties. For example, the carbon emissions data that we report to the Chicago Climate Exchange (CCX) is audited by NASD (see Section 5.7.4 for more information). Also, our financial information is audited annually by KPMG.

SD 3.9 and 3.13