VELCO urges lawmakers to plan for costly transmission upgrades

VELCO vice president Kerrick Johnson testified before the House Commerce and Economic Development Committee on Friday to discuss regional transmission development. Photo by John Herrick/VTDigger

VELCO vice president Kerrick Johnson testified before the House Commerce and Economic Development Committee on Friday to discuss regional transmission development. Photo by John Herrick/VTDigger

The state’s transmission utility told lawmakers to keep a close watch on the region’s costly electrical transmission build-out – a portion of which Vermont ratepayers are required to pay.

The Vermont Electric Power Co. (VELCO) said Vermont has improved much of its electrical infrastructure designed to increase reliability, but other states have not.

“And what we are seeing is a continuing rise of the regional transmission costs that Vermont will be required to pay a portion of,” VELCO Vice President Kerrick Johnson, told the House Commerce and Economic Development Committee on Friday.

Political and economic forces are replacing fossil fuel-powered generation units with smaller, renewable energy sources, a trend expected to accelerate over the next several years, according to the region’s grid operator, ISO New England. As a result, the region is expecting to invest $5 billion into projects designed to improve weaknesses in remote areas of the grid to ensure renewable power generators can quickly respond to changes in demand.

Because all six New England states benefit from a reliable power grid, the cost of these projects is shared. Vermont pays about 4 percent of the total cost, which would be about $200 million over the next four years, Johnson said.

“That’s just to keep the lights on,” he said.

Committee Chair Rep. Bill Botzow, D-Bennington, said he will consider whether any legislative action is needed “to make sure Vermont is in a favorable position.”

“Nobody is asking for legislation. I’m sure that the (Public Service) department would come to us if they thought something was needed and I’m sure industry would come to us if they thought something was needed,” Botzow said. “And if they did, we would respond.”

Department of Public Service Commissioner Chris Recchia, who is speaking regularly with regional stakeholders, said he will work to drive down the cost of these reliability projects in other states.

Over the past decade, he said Vermont has invested about $1 billion in similar projects. This cost was shared with other states.

“Now the other states are trying to do the same things that they need to do, but we need them to pay attention to costs,” he said. “We are still connected to the regional grid that is somewhat out of our control. And that makes me nervous.”

Through efficiency and distributed generation projects, for example, Vermont reduced the cost of its reliability projects by about $400 million, Recchia said. He wants to share these lessons with other states to shave costs.

But the region has other plans as well. Vermont is stuck between Canadian hydroelectric and wind power supplies in the north and growing demand for renewable energy in the south.

“The cheapest place between supply and demand is through Vermont, just in terms of line miles,” Johnson said. “We’re the shortest route.”

The six New England governors last year agreed to launch a bidding process to attract imports of Canadian renewable power and natural gas with a ratepayer-backed guaranteed return on investment. The bidding process could be opened as soon as this fall, Recchia said.

The states want to import up to 3,600 megawatts of electricity from Canada, but Johnson said the states have not agreed on the best way to share the cost of importing this power. And, he said it is unclear whether Canada can provide that amount of power.

Nonetheless, he said there is about a “60-40” chance that the plan goes through.

“How real is this? There’s six New England states, it’s an election year, there are large costs,” he said. “Having said that, there are three projects that are already in the queue.”

Anbaric, a Massachusetts-based developer, is proposing the Grand Isle Intertie, which would bring wind power from New York to a Burlington substation. The company has said it still needs state and federal approval but has filed for an interconnection feasibility study.

TDI New England, a branch of a New York financial firm, is proposing a project to bring hydroelectric power from Canada, under Lake Champlain, and to a substation in southern Vermont. The company has said it has the money for the project but still needs regulatory approval.

It is unclear how Vermont can best take advantage of these proposed projects, Johnson said.

“There is opportunity for Vermont here,” he said. “What do we get out of this? If we’re going to be some kind of green corridor, what’s the way to maximize the value?”

He said VELCO could invest in these lines, rent out right-of-ways, and sell environmental and cultural assessments for building projects in the state.

Johnson said Massachusetts is in the process of developing legislation that could require the state to import large amounts of renewable energy to meet proposed energy portfolio standards.

“There new legislation that’s being considered,” he said. “Massachusetts, one of the biggest players in New England, drives a lot of the regional debate,” he said.

John Herrick

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47 Comments on "VELCO urges lawmakers to plan for costly transmission upgrades"

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Willem Post
2 years 1 month ago

Any energy policy, such as heavily-subsidized, expensive, home-grown R.E. projects, that further increase New England electric rates, such as SPEED, must be avoided.

The more, low-cost, renewable, near-CO2- free, hydro energy New England gets from Canada, the better.

Recchia repeats his $400 million number without backup.

Senator Hartwell should ask for the backup.

Whose fantasy/back of the envelope numbers were added up to get to the Recchia number?

Faith-based, or imagination-based energy policy, will lead to bad outcomes.

Richard Ratico
2 years 1 month ago
Willem, My reply here was also just posted elsewhere on this forum. It responds to your oft repeated demand for MANDATED net zero new construction in lieu of any further development of renewable energy. Regarding your defensive posture on your belatedly insulated basement: In 1989 you installed the amount of insulation you felt was appropriate. Being an engineer, I’m sure you carefully considered the cost of the fiberglass and the labor to install it as well as the fuel it would save and the additional comfort it would provide. And, obviously compromises were made, because you also installed a 1200… Read more »
Willem Post
2 years 1 month ago
Richard, You misread my comment. I have 3 standard, above ground, side by side, propane tanks and buy 1200 gallons of propane under contract for the season, that is delivered on a monthly basis. Mandated? Is not the Efficiency Vermont charge on household electric bills a mandated charge, unless one gets a special exception? The US and other nations will eventually have to move to net zero energy buildings with PV solar and thermal solar systems. I think Vermont should be a leader in that area. One way to lead is with a net zero energy code for all NEW… Read more »
Richard Ratico
2 years 1 month ago
Apples and oranges, Willem. It is one thing to add a surcharge to everyone’s monthly electricity bill to support an award winning state energy efficiency program and an entirely different one to MANDATE that EVERYONE must build a Net Zero Energy home or not build at all. That would be like requiring Mr. Lorenzini only be able to buy a Prius when he trades in his pickup truck or Harley. By the way, VERMONT ALEADY IS A LEADER IN ENERGY EFFICIENT CONSTRUCTION. As I pointed out in my previous post, we have been building these homes for 30 years or… Read more »
Richard Ratico
2 years 1 month ago

….even after your evidence of such WAS DEMOLISHED by John Greenberg.

Willem Post
2 years 1 month ago
Richard, In Sweden, building codes are much stricter than in most other countries. R-40 walls, R-70 roofs and R-20 basements, are standard. Unless strict building codes exists that are enforced, many builders will do as they think is adequate. That was the case with my house in 1987 and with the house of a friend in 2011, regarding rim joist insulation. So little learning, despite the fact EV was holding shows in Burlington. Your house-car analogy is invalid/nonsense, because, whereas such strict building codes exist elsewhere, people are still buying the available cars to suit their needs. Building construction trade… Read more »
Richard Ratico
2 years 1 month ago
You’re slippery Willem. Got to give you that. It’s hard to know where to begin to rebut such spurious arguments. Good for Sweden. It’s a good code. I’m all for tighter standards. But you using it as support for your position is ridiculous, because WHAT YOU DEMANDED WAS NOT building codes. What you advocated, that I criticized, was not tighter standards, but a demand for a structures that are not only efficient, but that also produce energy. To do that they need RE. Yet you constantly object to that. So you contradict yourself. Sweden is a socialistic country. I have… Read more »
Willem Post
2 years 1 month ago

Richard,
Almost all housing in Vermont is energy hog housing, despite your claim, Vermont is a “leader in energy efficiency”.

The main reason is the lack of a strict building energy code that is enforced.

Such a code would require each NEW building be net zero energy, or even better surplus energy, so that when electric cars are used, their energy needs can be supplied by the energy systems of the buildings. That is what I call being a leader.

Richard Ratico
2 years 1 month ago

Willem,

If there were such a code you would have had to be arrested for violating it when you built your house. That is what I call being a hypocrite.

Willem Post
2 years 1 month ago
Richard, Ad hominem attacks detract from your arguments. In 1986, The Town of Hartford did not even have a building code, which astounded me then, and it still does not have building code, which is truly amazing. When I built my house in 1987, very few people, including most builders, were concerned with energy consumption, because energy was much less costly. My house has a concrete basement enclosed in 2″ blue board. Very few new houses in Vermont had such basements at that time. At that time, my builder told me I did not need it, but I insisted it… Read more »
Richard Ratico
2 years 1 month ago

Willem,

I apologize for anything I wrote that may have seemed to you “ad hominem”. You have engaged in the same and worse on this website.

Within the context of your relentless barrage of RE bashing which is demonstrably self contradictory, quite frankly, you invite it.

I won’t bother to repeat my critique of what you built versus what you might have built, particularly in consideration of your training, experience, wealth and the positions you take in this forum regarding energy efficiency.

John Greenberg
2 years 1 month ago
Willem, You write: “When I built my house in 1987, very few people, including most builders, were concerned with energy consumption, because energy was much less costly.” Actually, the price of electricity has gone down since then in inflation adjusted dollars. http://inflationdata.com/articles/inflation-adjusted-prices/electricity-price-inflation-rate/ Your statement: “Ad hominem attacks detract from your arguments” is more than a bit rich. You’ve not only said about me and others that we can’t understand or follow your arguments because we’re not engineers, but your repeated attacks on Tony Klein, the governor, the legislature, the PSB, and DPS are consistently ad hominem. At the same time,… Read more »
Kathy Nelson
2 years 1 month ago
There is no doubt that Efficiency Vermont is a bloated and inefficient ratepayer ripoff. Tony Klein doesn’t want to hear from the neighbors (he said that himself), and Pete Shumlin tries to swindle a disabled neighbor and hide data on a health care boondoggle that he promised to deliver. Shumlin’s own party has started a revolt against his absurd energy policy. Energy mandates in in other states, and other countries are falling by the wayside. The sun is the primary driver of climate change but since we have no control over that the IPCC gets bought off to keep the… Read more »
Richard Ratico
2 years 1 month ago

Kathy,

Whining won’t change a thing.

Paul Lorenzini
2 years 1 month ago

You are awesome Kathy! I did not sense any “whining”, only observation of the obvious.

David Schoales
2 years 1 month ago

More local generation capacity would go a long way toward limiting transmission costs… Duh.

joanie maclay
2 years 1 month ago

Whoa everyone.
Where is ALL this money coming from to finance this beyond huge project?
I am, also, a member of this state and often I hear, about by some media source, that there is another need for money to fund something. ….where are we going to find all this cash?
We have so much real need in our State. Somehow we have to prioritize our spending because , in my opinion, if we keep going at the pace we seem to be going we may find our fine State in a real financial mess! Okay…time to comment back..

Willem Post
2 years 1 month ago

Joanie,
May be Stenger and Shumlin will make another trip to China to round up multi-millionaires who each make $500,000 donations, aka, bribes, to get green cards, to get the project built, all as part of EB-5, Vermont’s new way to boost the stagnant economy.

Annette Smith
2 years 1 month ago

The energy sprawl gold rush is making a lot of money for a few people. It is yet more evidence of the need to look for ways to redistribute wealth for a more equitable society. At this point, we do not seem to be able to chip away at the edges of any of these systems that are robbing our communities and citizens of the ability to survive, let alone thrive.

Willem Post
2 years 1 month ago

John,
US inflation adjusted electricity prices decreased, as you say, but in 1990, oil prices were nominal 23.19, increased to 41.40 inflation adjusted. In 2013, both about 91.50.

Please, clarify why you brought up electricity prices, as they appear to be not relevant.

Richard Ratico
2 years 1 month ago
Willem, Warning. You’re inviting more “ad hominem” attacks as you call them. When I read baloney propaganda crowed by a puffed up chicken POSING as an owl, it’s nigh impossible to remain polite. I promise I’ll try. You wrote, “Please, clarify why you brought up electricity prices, as they appear to be not relevant.” Willem, you do realize it takes electricity to operate the boiler that heats YOUR ENERGY HOG HOME. I’m sure a jury of your peers would consider them relevant. They’re also relevant because you repeatedly cut and paste funny numbers about the cost of electricity in Vermont… Read more »
John Greenberg
2 years 1 month ago
Willem, Actually, I didn’t bring up electricity prices; you did. You wrote “energy was much less costly.” Last I knew, electricity is a form of energy. Richard Ratico explains in some detail electricity’s relevance for home heating in his response to you. Since you seem to want to pursue this, I’d argue that your thesis that “in 1987, very few people, including most builders, were concerned with energy consumption….” is flatly wrong. Actually, it was around 1987 (a bit earlier, if memory serves me, but I haven’t checked) that the Public Service Board first ordered Vermont utilities to pursue energy… Read more »
Willem Post
2 years 1 month ago
John, You wrote: Actually the price of electricity had gone down… My first reaction what does that have to with the price of propane or fuel oil, as both are rarely used to make electricity. The electricity cost of a standard propane or fuel oil heating system is a few percent of the total annual energy cost, hardly a significant issue. A few people means to me a small percent of the general public, and it seems to have been of no concern of my builder in 1987 and of the builder in 2011 who built the house of my… Read more »
John Greenberg
2 years 1 month ago

Willem,
There are over 350 members of the homebuilders association of Northern Vermont, so obviously a good many more builders than that in the state.

If I were to flip a coin twice and it came up heads both times, would you conclude that ” 2 out of 2 is more than a coincidence?”

Now that I think about it, perhaps you would.

Willem Post
2 years 1 month ago

John,
You ignore my statement about the foam insulation vendors who said most builders don’t bother to insulate the rim joists.

Add that statement to the two builders I mentioned, I would say the practice of not insulating rim joists is more prevalent than meets the eye.

But, according to other people’ reasoning, it may not be a 100% foolproof test, and be a sufficient basis for accusing someone of lying, etc.

John Greenberg
2 years 1 month ago

Willem,
“You ignore my statement about the foam insulation vendors who said most builders don’t bother to insulate the rim joists. ”

I ignore as many of your statements as I feel I possibly can, in good conscience. Rebutting just a portion of the remainder is already incredibly time-consuming.

You’re right about one thing though: it’s not “a 100% foolproof test.”

Richard Ratico
2 years 1 month ago
More baloney from Willem. At least you make me laugh. I’m an electrician and I work in LOTS of basements. Most retrofit electrical work begins at the service panel, located in the basement. You could not be more wrong about foam insulation in the rim joist area. I FREQUENTLY see retrofitted spray foam applied in that area and continued well down the foundation walls. The rim joist area is typically quite “leaky” and spray foam is the most effective way to seal and insulate it at the same time. Willem, I’m glad you finally got around to adding some insulation… Read more »
Richard Ratico
2 years 1 month ago

Willem,

It’s a good idea redo your rim joist quick fix. You can do it yourself and it’s still less expensive than a spray foam contractor. Just buy some 2″ foam board insulation and some cans of do it yourself spray foam at any building supply yard. Use a handsaw to cut pieces of foam to fit the boxes. Don’t be too fussy about fit. Leave about 1/4″ all around for a bead of the spray foam. Its air tight and therapeutic 🙂 I’ll waive my usual consultation fee.

Willem Post
2 years 1 month ago

John,

Also the US median household income index declined from 100 in 2000, to 92 in jun 2013.

Increasing real fuel prices and declining real median household incomes, an ideal combination for economic stagnation, as witnessed in the US.

Adding heavily-subsidized, expensive, such as SPEED energy at 3-4 times grid prices, variable, intermittent, wind and solar energy, i.e., junk energy, according to grid operators, to this mix will prolong economic stagnation.

It would be much less costly, AND remove CO2 at a lower cost/ Btu reduced to do energy efficiency first by renovating Vermont’s energy-hog housing stock .

Richard Ratico
2 years 1 month ago
Lets take a break in the Willem show for a reality check. In spite of his debunked purported support for energy efficiency first, his real agenda is promoting heavily subsidized, deadly nuclear power development, in lieu of clean and affordable, SAFE wind and solar. It’s fortunate Vermont Yankee has proven to be financially unsound because it is the same flawed design used at Fukushima. He would prefer to have it operate another 20 years. Coinciding with the 3 year anniversary of the TRIPLE REACTOR MELTDOWN, CBS news returned to see how the clean-up was progressing. Here’s an excerpt from the… Read more »
Glenn Thompson
2 years 1 month ago
Richard Ratico, “It’s fortunate Vermont Yankee has proven to be financially unsound because it is the same flawed design used at Fukushima. He would prefer to have it operate another 20 years.” What happens when VY is shutdown….and another source of power is required to replace it? What do you replace it with? Here is the latest ISO New England Dashboard showing NG producing 55% of the region’s electricity! Would you prefer burning more Natural Gas which presently is fairly cheap but historically NG has price volatility? http://isoexpress.iso-ne.com/guest-hub I would have preferred a new 3rd or 4th generation Nuclear Plant… Read more »
Richard Ratico
2 years 1 month ago
Glenn, You wrote: “With the advances in Nuclear technology, operating VY another 20 years efficiently and safely could easily be accomplished! Bottom line, we are left with few options! FYI, I’m vehemently opposed to filling Vermont with inefficient, unreliable, and unpredictable Industry wind and solar. Vermont is unique in it’s scenic beauty and must not be ruined by inefficient power sources that take up a great deal of space and produce little in the way of power.” Here’s my recent reply to Kathy Nelson who shares your misplaced faith in the nuclear industry: “Corners are ALWAYS cut to save money.… Read more »
Glenn Thompson
2 years 1 month ago
Richard Ratico, “Two of the cooling towers at Vermont Yankee COLLAPSED.” In case you didn’t know…..there are 22 (I counted them) Cooling towers at VY. If two go down, are you going to assume the other 20 will go down all at once like Domino’s? Again, IMHO the Boogieman theory! “In my informal survey of people I discuss it with, well more than half disagree with you about the aesthetics of large scale wind & solar in Vermont.” Have you bothered to interview people who currently live near Industry wind to receive input what their thoughts are? Or don’t those… Read more »
Wayne Andrews
2 years 1 month ago

Unnecessary million dollar verdits are becoming a part of the problem. In fact everyone has a problem with their hand turned upward.

Richard Ratico
2 years 1 month ago
Glenn, Your boogeyman theory didn’t work out so well at Fukushima. My POINT, which you seem to have missed, was that S___ happens. We were extremely fortunate the incident at VY only involved a cooling tower. To say it couldn’t happen to a more critical system is a refusal to face REALITY and what so recently happened in Japan. Is an accident likely to happen? I certainly hope not, though Entergy has repeatedly demonstrated it’s incompetence as an operator. The POINT is that the consequences of a serious nuclear accident are so OFF THE CHARTS that the risk, even if… Read more »
Glenn Thompson
2 years 1 month ago

Richard Ratico,

“Regarding the ISO-NE, been there, done that. What’s your point?”

78% of the power generated according to the latest ISO-NE dashboard is Fossil Fuels & Nuclear! Again….explain how your 3 statements of ‘Improved Transmission systems”, “Financial incentives”, and “smart meters’ is going to replace that?

You appear to be ‘stuck’ Fukushima gear! FYI, the advances in Nuclear technology is anything but ‘hogwash’!

Willem Post
2 years 1 month ago
Glenn, Four huge companies, TVA, B&W, GE and Bechtel have formed a consortium to produce modular nuclear reactor systems and steam generator systems that are built and assembled in the factory and shipped by rail or barge to the site. The capacity of these units is about 150 MW, multiple units can be arranged side by side to have power plants producing more than 1000 MW at a capacity factor of about 0.90 Lowell’s CF was 0.206 in 2013. Refueling is every 5 years vs about 500 days for existing reactors. The US has very significant and unique experience building… Read more »
Glenn Thompson
2 years 1 month ago

Willem,

One of the areas I follow is the technology being developed by Gen4 (formally Hyperion) of developing mini-reactors. Of course in the minds of some…this is all a ‘fantasy’ to be ignored so we can go down a different path of attempting to achieve Utopia without a mix of Fossil Fuels and Nuclear power and instead focus on a energy policy based on emotions and wishful thinking.

http://www.gen4energy.com/about/
http://www.valvemagazine.com/index.php/web-only/categories/end-user-industries/5213-the-future-of-nuclear-small-scale-nuclear-reactors

Willem Post
2 years 1 month ago

Glenn,
I think the future lies with modular units. The units can be built at about 40-50 per month, similar to Boeing building airplanes.

The G3/4 technology is a major step forward, but will prove to be too costly and too long to implement.

Modular units increase flexibility. Units can be refueled on a rotating basis. Units can be added while other units remain on line.

That is the reason for these big four entities to form their consortium. Success will be very profitable for many years.

Richard Ratico
2 years 1 month ago
Glenn, I’ll stay stuck as long as it takes. Thanks for the compliment. No one knows the location of Fukushima’s three melted reactor cores. Think on that awhi Regarding Gen IV nukes, one word. Vaporware. Check out http://fairewinds.org/ for the facts. Your link was about fantasies. Improved transmission systems, financial incentives, smart meters and renewable energy generation can replace fossil fuels and nukes. The Chinese went from nothing to producing more solar and wind hardware than anyone in the world in less than five years. “At the end of 2012, there were 76GW of electricity generating capacity installed in China,… Read more »
Glenn Thompson
2 years 1 month ago
Richard Ratico, “Improved transmission systems, financial incentives, smart meters and renewable energy generation can replace fossil fuels and nukes.” You call my links ‘fantansies’, then follow it up by stating the ultimate fantasy. You are not going to replace 80% of the current electric grid made up with Fossil Fuels and Nuclear by the methods you suggested! As for China, you failed to point out Coal makes up a large % of China’s power grid. China, FYI is a rapidly growing economy where they are constantly adding all types of power sources which you conveniently left out of your comments.… Read more »
Richard Ratico
2 years 1 month ago

Glenn,

Once again you miss my point. By now I understand that’s your intention.

China’s growth in renewables far outstrips it’s growth in nukes. You and Nukem advocate exactly the opposite. Don’t take my word for it.
Please watch this short interview with Amory Lovins. He’s one of the foremost energy experts on the planet:
http://fairewinds.org/road-less-taken-energy-choices-future/

Richard Ratico
2 years 1 month ago
Glenn & Willem, The U.S. Dept. of Energy has allocated $452 Million over 5 years, “to support the development of one or two US light water reactor designs”. http://www.world-nuclear.org/info/Nuclear-Fuel-Cycle/Power-Reactors/Small-Nuclear-Power-Reactors/ These are GRANTS, not guaranteed loans like those right wingers screamed about in the Solyndra case. Huge subsidies are always acceptable for nukes. Here are the final paragraphs from the same article (March 2014) by the World Nuclear Association. Needless to say, this is a pro nuke organization. “Some of the developments described in this paper are fascinating and exciting. Nevertheless it is salutary to keep in mind the words of… Read more »
Paul Lorenzini
2 years 1 month ago

What is your solution, Richard? The most compassionate one first please.

Richard Ratico
2 years 1 month ago

Talk to me Paul.

Richard Ratico
2 years 1 month ago

Compassion? How’s this, a link to the famous Apollo 17 photo:
http://earthobservatory.nasa.gov/IOTD/view.php?id=1133

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