ESSEX, Vt. - Premier Jean Charest said he hopes a $2 billion power deal signed between Hydro-Quebec and Vermont will spur interest from other U.S. states looking to buy power from the provincial hydroelectric utility.

The deal announced Thursday will see Hydro-Quebec sell 225 megawatts to Vermont utilities between 2012 and 2038.

It's not a significant increase over what Quebec already sells to the Green Mountain State -- Hydro and Vermont signed a deal in 1987 which guaranteed the sale of 200 megawatts to Vermont until 2012.

Hydro-Quebec meets roughly one-quarter of the electricity needs for the small state.

Gov. James Douglas said the contract allowed Vermont to increase its purchases over the years.

The state has so far not renewed the license of the Vermont Yankee nuclear plant, which provides nearly three-quarters of the electricity that the state consumes.

The contract does not set a fixed price per kilowatt hour, but rather a price that will vary based on prices of electricity markets and inflation.

It is estimated that the starting price for delivery in 2012 is six cents per kilowatt hour, about the same price that Vermont currently pays to Hydro-Quebec. The exact rate for 2012 will be determined in December.

"The contract will follow market prices, but also protect consumers against Vermont's major annual fluctuations," said Thierry Vandal, Hydro's president.

"We think it's good for everyone -- the Vermont consumers and Hydro-Quebec."

Charest echoed that.

"It allows us to plan long-term and it is a contract that allows Quebecers to profit," said Charest.

The contract provides that Hydro-Quebec and Vermont utilities will share the revenue that could flow from recognition of the hydroelectric power as renewable energy.

Vermont passed legislation earlier this year deeming that large-scale hydroelectric power should be declared as a renewable resource.

Charest and Douglas are now encouraging Washington to pass similar legislation and Douglas has discussed the issue with U.S. President Barack Obama although the matter isn't a priority for Congress right now.

Charest says the recognition of hydroelectric power as a renewable resource would present more chances for Hydro-Quebec to enter into long-term contracts because it would not face the same legislative hurdles as fossil fuels.

The contract with Vermont is one of the few long-term agreements entered into by Hydro-Quebec. In the 1990s, the State of New York called off negotiations for a similar deal in the wake of the controversy surrounding the proposed Great Whale hydroelectric.

Hydro regularly exports power in the short-term. It is lucrative but income varies from month-to-month.

The Crown corporation is currently negotiating with two U.S. companies for the construction of a 1,200-megawatt transmission line that would pass through New Hampshire and increase exports in several states, including New York.

Vermont environmentalists denounced the description of Hydro-Quebec's power as a renewable resource, saying the utility operates a nuclear power station and has a spotty environmental record.

The deal announced Thursday was signed on a tentative basis last March but last-minute problems prevented the official signing until now. However, there have been no changes to the original agreement.

The contract, which involves Central Vermont Public Service and the Green Mountain Power utilities, still has to be approved by state regulatory authorities.