Form 11-K 401(k) Employee Savings and Investment Plan and Trust
 




 

United States
Securities and Exchange Commission
Washington, D.C. 20549

FORM 11-K

x Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended December 31, 2005

or

o Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934

For the transition period from ___________ to ___________

Commission file number 1-8291

GREEN MOUNTAIN POWER CORPORATION
Employee Savings and Investment Plan and Trust
(Full Title of the Plan)


GREEN MOUNTAIN POWER CORPORATION
163 Acorn Lane
Colchester VT 05446
(802) 864-5731
(Name of issuer of the securities held pursuant to the Plan and the address of its principal executive office)



163 Acorn Lane
Colchester, VT 05446
(Address of principal executive office)

 

Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
Financial Statements And Schedule





INDEX
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
FINANCIAL STATEMENTS
 
SUPPLEMENTAL SCHEDULE

EXHIBITS



Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
Financial Statements And Schedule
TABLE OF CONTENTS
December 31, 2005 and 2004




Page

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM                      4


FINANCIAL STATEMENTS

  Statements of Net Assets Available for Plan Benefits                                  5

  Statements of Changes in Net Assets Available for Plan Benefits                               6

  Notes to Financial Statements                                             7-10


SUPPLEMENTAL SCHEDULE

  Schedule H, line 4i - Schedule of Assets (Held at End of Year)                                11

SIGNATURES                                                            12

EXHIBIT INDEX                                                           13
Exhibits:

23.1 Independent Auditors’ Consent                                       14

 
Report of Independent Registered Public Accounting Firm
 


To the Retirement Board
Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
Colchester, Vermont

We have audited the accompanying statements of net assets available for plan benefits of the Green Mountain Power Corporation Employee Savings and Investment Plan and Trust (the “Plan”) as of December 31, 2005 and 2004, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
 

 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Green Mountain Power Corporation Employee Savings and Investment Plan and Trust at December 31, 2005 and 2004, and the changes in its net assets available for plan benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audit was made for the purpose of forming an opinion on the 2005 basic financial statements taken as a whole. The 2005 information included in the supplemental schedule is presented for purposes of additional analysis and is not a required part of the 2005 basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The information in the supplemental schedule has been subjected to the auditing procedures applied in the audit of the 2005 basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the 2005 basic financial statements taken as a whole.
 

/s/McSoley, McCoy & Co.
May 16, 2006
VT Reg. No. 92-349


GREEN MOUNTAIN POWER CORPORATION
          
Employee Savings and Investment Plan and Trust
          
           
Statements of Net Assets Available for Plan Benefits
          
           
December 31, 2005 and 2004
          
           
   
2005
  
2004
  
           
Assets:
              
Participant directed investments:
              
Interest bearing cash
  
$
-
  
$
34,083
  
               
Green Mountain Power Corporation, common stock,
             
at fair value
    
4,235,546
   
4,193,863
 
               
Registered investment companies, at fair value
    
6,063,900
   
5,457,871
 
               
Value of interest in pooled separate accounts,
              
at contract value
    
16,841,364
   
14,816,270
 
 
              
Value of funds held in insurance company general
              
account, at contract value
    
2,786,035
   
2,765,672
 
               
Participants' loans
    
468,546
   
461,047
 
               
Net assets available for Plan benefits
  
$
30,395,391
  
$
27,728,806
  
               
The accompanying notes are an integral part of these financial statements.
              
 
 


GREEN MOUNTAIN POWER CORPORATION
          
Employee Savings and Investment Plan and Trust
          
           
Statements of Changes in Net Assets Available for Plan Benefits
          
           
For the Years ended December 31, 2005 and 2004
          
           
   
2005
  
2004
  
               
Investment income:
              
Interest
  
$
90,841
  
$
90,552
  
Dividends and capital gains
   
500,277
   
257,448
 
Net investment gain from pooled separate
              
accounts, at contract value
    
1,295,445
   
1,706,940
 
Net appreciation in fair value of investments
    
38,999
   
1,217,499
 
     
1,925,562
   
3,272,439
 
               
Contributions:
              
Employer
    
512,586
   
485,307
 
Participant
    
1,288,736
   
1,282,162
 
               
     
1,801,322
   
1,767,469
 
               
Total additions
    
3,726,884
   
5,039,908
 
               
Administrative expenses
    
10,744
   
6,370
 
               
Participants' withdrawals and distributions
    
1,049,555
   
1,349,385
 
               
               
Total deductions
    
1,060,299
   
1,355,755
 
               
               
Net increase
   
2,666,585
   
3,684,153
 
               
               
Net assets available for Plan benefits:
              
Beginning of year
    
27,728,806
   
24,044,653
 
               
               
End of year
  
$
30,395,391
  
$
27,728,806
  
               
The accompanying notes are an integral part of these financial statements.
              
               


Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004


NOTE 1
PLAN DESCRIPTION

 
The following description of the Green Mountain Power Corporation Employee Savings and Investment Plan and Trust (the Plan) is provided for general information only. Participants should refer to the Plan document for a more complete description of the Plan’s provisions.

 
General
 
The Plan is a defined contribution plan established by Green Mountain Power Corporation. The Plan covers substantially all full-time employees of Green Mountain Power Corporation (the Company).

 
The Company’s Retirement Board is the Plan Administrator with the authority to control and manage the operation and administration of the Plan. The Plan’s assets are held by Prudential Financial (the Trustee) of the Plan, which invests cash received, including interest and dividend income, and makes distributions to participants. The Plan is subject to the provision of the Employee Retirement Income Security Act of 1974 (ERISA).

 
Contributions
 
Each year, participants may contribute any amount of pretax annual compensation, as defined by the Plan, subject to IRS limitations. For each pay period the Company contributes a matching contribution of 100% of participants’ contribution up to 4% of Compensation.

 
Effective January 1, 2004, an employer non-matching contribution shall accumulate on behalf of each participant on a monthly basis. Such contribution shall be in an amount equal to one half percent of the participant’s compensation and shall be known as employer non-matching contribution and shall be contributed to the employer non-matching contribution account of each participant employed at the end of the month.

 
Participant Accounts
 
Each participant’s account is credited with the participant’s contributions, allocations of the Company’s contributions, and plan earnings, and charged with participant’s withdrawals, distributions and an allocation of administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account, net of applicable Federal tax.

 
Participants allocate contributions among various investment choices, including mutual funds, pooled separate accounts, a guaranteed income fund and common stock, including Green Mountain Power Corporation Common Stock. Company contributions are automatically invested in accordance with the participant's investment direction for his or her account.

 
Vesting
 
Participants are immediately vested in their voluntary contributions as well as the employer’s contribution and any earnings thereon.


Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
 
NOTE 1
PLAN DESCRIPTION (continued)

 
Participants’ Loans
 
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loan transactions are treated as a transfer between the investment fund and the participant loan fund. Loan terms range from 1 - 5 years or up to 30 years for the purchase of a principal residence. The loans are secured by the balance in the participant’s account and bear interest at the Trustee’s prime rate. Principal and interest is paid ratably through monthly payroll deductions.

Payment of Benefits
 
On termination of service due to death, disability or retirement, a participant may elect to receive either a lump-sum amount or to purchase an annuity equal to the value of the participant’s vested interest in his or her account. For termination of service due to other reasons, a participant may receive the value of the vested interest in his or her account as a lump-sum distribution.


NOTE 2
SUMMARY OF ACCOUNTING POLICIES

 
Basis of Accounting
 
The financial statements of the Plan are prepared in accordance with accounting principles generally accepted in the United States of America.

 
Use of Estimates
 
The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan Administrator to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Risks and Uncertainties 
 
The Plan utilizes various investment instruments, including mutual funds and investment contracts. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

 
Investment Valuation and Income Recognition
 
The Plan has certain investments stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the Plan at year-end. The Company stock is valued at its quoted market price. Participant loans are stated at face amount which approximates fair value. Investments in the pooled separate and guaranteed income accounts are recorded at their contract value, which approximates fair value.

 
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on an accrual basis. Dividends are recorded on the ex-dividend date.



Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
NOTES TO FINANCIAL STATEMENTS
December 31, 2005 and 2004
 
NOTE 2
SUMMARY OF ACCOUNTING POLICIES (continued)

 
Management fees and operating expenses charged to the Plan for investments in the mutual funds are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.

 
Payment of Benefits
 
Benefit payments are recorded when paid.

 
Administrative Expenses
 
Administrative expenses of the Plan are paid by the Plan as provided in the Plan document.
 
Impact of Recently Issued Accounting Standards
Plan management believes that there are no recently issued accounting standards that would have a material impact on the accompanying financial statements.


NOTE 3
RELATED PARTY TRANSACTIONS

At December 31, 2005 and 2004, participant directed investments included $4,235,546 and $4,193,863, respectively, of common stock of the Plan sponsor, Green Mountain Power Corporation. These amounts represent 14% and 15% of the net assets available for plan benefits at December 31, 2005 and 2004, respectively. Participants whose accounts are invested in Green Mountain Power Corporation are exposed to additional risk due to the concentration of investment in one company.


NOTE 4
PLAN TERMINATION

 
Although it has not expressed any intention to do so, the Company has the right under the Plan to discontinue contributions or terminate the Plan at any time, subject to provisions of ERISA.


NOTE 5
INVESTMENTS

 
Investments that represent 5% or more of the Plan’s net assets available for benefits at December 31, 2005 and 2004 are as follows:
 
2005          2004 

Mid Cap Growth/Artisan Partners             $ 2,106,316           $1,709,913
 
(188,425 units in 2005 and 166,448 units in 2004)
Green Mountain Power Common Stock             4,235,546               4,193,893
 
(147,221 shares in 2005 and 145,469 shares in 2004)
Large Cap Value Fund/Wellington Mgmt           4,068,590              3,645,369
 
(314,346 units in 2005 and 306,592 units in 2004)
International Growth/Artisan Partners            3,573,554              3,192,489
 
(294,198 units in 2005 and 303,148 units in 2004)
American Century Moderate Investor            2,865,522              2,584,023
 
(425,152 shares in 2005 and 381,687 shares in 2004)
American Century Aggressive Investor           3,198,379                2,827,028
 
(406,401 shares in 2005 and 366,670 units in 2004)
Guaranteed Income Fund                2,786,035               2,765,672
 
(103,034 units in 2005 and 104,449 units in 2004)
Dryden S&P 500 Index Fund               3,513,374            3,236,760
(47,945 units in 2005 and 46,189 units in 2004)
 
        Net appreciation (depreciation) in the fair value of investments during the years ended December 31, 2005 and 2004 are as follows:

                                              2005         2004 
 
Corporate stock                                     $ (7,166)             $ 782,654
Mutual Funds                                     46,602             428,149
Self-brokerage accounts                                     (437)                6,696
 
          $ 38,999            $ 1,217,499


NOTE 6
TAX STATUS

 
The Plan obtained its latest determination letter dated October 8, 2002, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with applicable requirements of the Internal Revenue Code. The Plan has been amended since receiving the determination letter. However, the Plan Administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, no provisions for income taxes have been included in the Plan’s financial statements.


NOTE 7
RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500

          The following is a reconciliation of net assets available for plan benefits per the financial statements to Form 5500 at December 31, 2004: 
                                                   2004 
          Net assets available for plan benefits per
the financial statements                        $27,728,806
Less: Variance in participant loans                        8,868   
         Net assets available for plan benefits
           per the Form 5500                           $27,719,938


 
The following is a reconciliation of distributions per the financial statements to Form 5500 at December 31, 2005:
          2005   
           Distributions per the
    financial statements                      $ 1,049,555
Less: Adjustment to participant loans                     8,868 
Distributions per the Form 5500                               $1,040,687 



Green Mountain Power Corporation
Employee Savings and Investment Plan and Trust
Schedule H, Line 4i- Schedule of Assets (Held at End of Year)
December 31, 2005
 
Plan Sponsor: Green Mountain Power Corporation
                  
                   
Administrator's EIN: 03-0127430
                  
Plan number: 003
                  
                           
(a)        (b)
    
 
   
  
(c) 
 
  
(d)
    
  
(e)
 
        Identity of issue, borrower, lessor, or similar party
          
Description of investment
including maturity date, rate of interest, collateral, par, or maturity value 
    
Cost
    
Current Value
  
                           
* Green Mountain Power Corporation common stock
    
147,221 units
        
$
4,235,546
  
* Guaranteed Income Fund
    
103,034 units
          
2,786,035
 
American Century Ultra Account
    
3,511 units
          
121,640
 
Large Cap Value Fund / Wellington Mgmt
          
314,346 units
          
4,068,590
 
Dryden S&P 500 Index Fund
          
47,945 units
          
3,513,374
 
American Century Equity Index Fund
          
27,101 units
          
262,050
 
Mid Cap Growth/Artisan Partners
          
188,425 units
          
2,106,316
 
T. Rowe Price Small-Cap Stock Fund
          
19,280 units
          
711,596
 
International Growth/Artisan Partners
          
294,198 units
          
3,573,554
 
American Century Aggressive Investor
          
406,401 shares
          
3,198,379
 
American Century Moderate Investor
          
425,152 shares
          
2,865,522
 
Core Bond / BSAM Fund
          
31,482 units
          
452,843
 
Templeton Foreign Account
          
20,739 units
          
438,503
 
Munder Small Cap Fund
          
64,251 units
          
703,315
 
Granahan Small Cap Growth Fund
          
13,476 units
          
167,256
 
Lifetime 60 Fund
          
47,959 units
          
722,326
 
* Participant loans
    
4.00% to 9.50
%
  
-
    
468,546
 
                     
$
30,395,391
  
* Party in interest
                    


SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
 

                Green Mountain Power Corporation
                Employee Savings and Investment
                Plan and Trust
 

Date June 27, 2006                                                 By /s/Dawn D. Bugbee    
                                                        Dawn D. Bugbee    
                                             Chief Financial Officer



EXHIBIT INDEX
Exhibit     Description
23.1   Independent Auditors’ Consent