by Nat Frothingham
Tom Dunn, president and chief executive officer of the Vermont Electric Power Company explains what Vermont Electric Power Company is, what it does, and how.
Across Vermont, there are 17 separate utilities that deliver power to consumers, and any of us who own a home or rent an apartment or run a business will know the name of our local power provider. Green Mountain Power Corporation is state’s largest utility. In addition to Green Mountain, there are a number of smaller utilities including Washington Electric Co-op and a host of smaller village and municipal utilities such as the Northfield Electric Department. We depend on these local power providers to keep our lights turned on, for electric heat during the winter, to keep appliances running, and stores, factories and offices humming. As power consumers, we know our local electricity supplier because we get a monthly bill in the mail. But we’re much less aware of another player in the mix – Vermont Electric Power Company.
When it was formed in 1956, Vermont Electric was the nation’s first “transmission only” company. As described by the company’s website, its job was “to create and maintain an interconnected grid capable of sharing access to clean hydro power.” In 1956, that “clean hydropower” anticipated the completion of the (Canadian-American) Moses-Saunders Power Dam, an immense, 10-football-fields-long dam across the St. Lawrence River between Massena, New York and Cornwall, Ontario — a dam that continues to generate and deliver electric power both to Canada and America’s Northeast.
Vermont Electric was organized more than 50 years ago to bring New York electric power into Vermont. Today, according its website, Vermont Electric continues to serve as the state’s “transmission-only” company with 738 miles of transmission lines, 13,000 acres of rights-of-way, and 55 substations, switching stations and terminal facilities. The company’s assets also include “equipment that enables interconnected operation with Hydro-Quebec and fiber optic communication networks that monitor and control the electric system and serve as a key link for Vermonters’ high-speed data internet.”
Tom Dunn compared the Vermont Electric Power Company system and the utilities it serves to Vermont’s road system. “Think of VELCO, as those superhighways, I-89 and I-91,” he said. These superhighways accommodate huge volumes of traffic (north and south) and these superhighways connect to smaller roads across the state. In the same way, Vermont Electric Power Company’s system transports large amounts of power into Vermont from outside the state. Once that power enters Vermont, said Dunn, “We deliver it to the subsystems (or individual power providers) who distribute it to the smaller roads.”
And here’s the critical advantage where Vermont has taken the lead. Let’s say that a very large supply of electricity becomes available from outside Vermont. Conceivably that utility could control and potentially block access to cheap electric power. As Dunn observed, in other jurisdictions the transmission system was owned by large utilities and there were fights with smaller utilities over access. But because of the existence of a statewide transmission company owned by all of our utilities, those fights didn’t materialize. And in 2012 when Green Mountain Power Corporation merged with Central Vermont Public Service Corporation, as part of that merger it was agreed that Green Mountain — now the state’s largest utility — would not take majority control of Vermont Electric Power Company’s board of directors. Instead, a portion of the company is now owned by a public benefits corporation.
Now, according to Dunn, changing circumstances are creating sweeping changes to the traditional energy systems. “Our entire industry is changing,” Dunn said.
In an introduction that Dunn wrote to Vermont Electric Power Company’s “2015 Long-Range Transmission Plan” filed with the Public Service Board on June 25, he wrote “A grid reformation is underway. How we generate, move and use power — and how we pay for it — are undergoing change not seen since Edison.” As part of this introduction, Dunn listed some of the major variables that are driving change. These variables include the retirement of the Vermont Yankee nuclear power plant; the concern about global climate change; and the push to replace coal and oil with renewable (low-carbon) sources of energy such as solar installations — replacing the current grid model dominated by centralized, large-scale, electric generators to one with an increasing number of smaller-scale generators located on the customer’s premises.
Again, even if modestly, Vermont is leading the way. Said Dunn, “Vermont utilities are embracing and even helping to direct this change.”
Dunn, an engineer by training with a master’s degree in business, has made a serious personal study of the climate change question. He has weighed the evidence and is impressed that the scientific community has overwhelmingly concluded that human activity is responsible for the serious climate change threat. “It’s not that we just get warm, ” he said. “We are seeing extreme weather events more often. The month of June is rainy. We had an extremely cold winter. We are seeing an increase in the number and strength of extreme weather events that damage the grid.” Dunn has consulted a Vermont Electric Power Company graph of extreme weather events over the past 10 years. That graph is producing evidence the Vermont is beginning to see the effects of climate change, he said.
Despite changes to the marketplace, not every utility across the country has embraced the changes. But if the marketplace changes and the sources of energy change, then the grid must change. Said Dunn “Think of the grid today as a platform with electricity coming from a variety of different places: wind, solar, water, biomass and natural gas.”
“I see the utilities doing a lot of small experiments,” Dunn said, referring among other things to holding back or deferring a $150 million transmission project, or using computers and research to predict the impact of weather events and small power generation, or using smart meters effectively or sharing what we learn in Vermont with the utility industry at large.
“I think we are on the cusp of a changing utility world,” Dunn said. “Utilities who said they are going to fight solar are beginning to change their policies.” In this maelstrom of change, Dunn isn’t claiming that Vermont can change the phenomenon of climate disruption and extreme weather events. But he sees Vermont as an “energy innovation workbench” and he said, “If we can share what we learn with the industry, that’s pretty exciting.”