Avram Patt will retire at the end of this month after serving more than 16 years as general manager of Washington Electric Cooperative and eight years on the utility’s board.
His successor, Patricia Richards, will take the reins of the rural utility July 1, leading the co-op’s 38 full-time employees and its more-than 10,500 members into a new era of energy transmission. Richards was the co-op’s contact point at La Capra Associates, consulting to the cooperative on issues such as planning, contracting, renewable energy analysis and rate design.
Patt, a staunch supporter of renewable energy and a sagacious voice in Vermont’s energy economy, sat down with VTDigger’s Andrew Stein on Wednesday to talk about the challenges, successes and innovations of Vermont’s energy past and future. The transcript has been edited.
VTD: What is the biggest challenge to running Washington Electric Cooperative?
Patt: As a small utility, we can only have a certain amount of staff. A larger utility can specialize. Over the last several years, utilities have greatly increased the amount of direct communication with their customers through social media and things like that. We’re not there yet, and the reason we’re not there is because we’re trying to figure out how to staff that.
VTD: Last year, the state’s two largest utilities merged under the banner of Green Mountain Power, which is owned by the Canadian energy company Gaz Metro. Has this merger affected smaller utilities?
Patt: Yes. Seven of our co-op’s eight substations are served by GMP’s sub-transmission lines, which operate below the voltage level of the state’s transmission utility, VELCO. When CVPS and GMP merged their tariff, it caused a whopping 80 percent increase, and we — with Vermont Electric Co. and Burlington Electric — intervened at the Federal Energy Regulatory Commission, and we’ve been in discussions about a settlement.
VTD: In the long term how will the merger affect you?
Patt: In a small state, having one utility that is 70 percent of the grid’s load, tends to dominate in the regulatory sphere. What they want to do, we have to do, and it’s a concern, but I can’t point to anything specific.
Also, now that the big gorilla is owned by a Canadian company that owns Vermont Gas, the question is: How does this affect the future? I can’t tell you what the next big issue is going to be or who will be the CEO of GMP, or the chair of the Public Service Board or the governor of Vermont. But what we lost control of now is any control over who calls the shots in the future on the issues we don’t even know about yet.
VTD: Isn’t there an advantage to having a larger utility like this with its economies of scale?
Patt: Certainly there are efficiencies of scale, but co-ops get economies of scale in a different way. Co-ops form what’s called second-tier service co-op. We, along with 600 other co-ops, are members of a cooperative financial institution that’s a highly rated, $24 billion lender that provides good financing and lots of free experts. Our entire IT system is designed and operated by the national information systems cooperative, which is comprised of several hundred co-ops.
VTD: Why, then, are Washington Electric’s rates higher than GMP’s?
Patt: The most significant reason is that we’re the most rural territory in the state. Two-thirds of our cost is the infrastructure, and we only have a residential meter per mile to pay for that. In Vermont, residential customers don’t use a lot of electricity, compared to the rest of the country.
I’m not disputing there might not be some benefits coming out of that merger for the customers of that utility. But no one is pounding on the co-op’s door to buy our territory because it would be a drag on the economics of anyone else for the very reason that the co-op was formed to begin with in 1939, which was to serve territory that no one else would.
VTD: What are the biggest transformations you’ve witnessed to the grid and utilities during your time with the Washington Electric Cooperative?
Patt: The VELCO Northwest Reliability Project in the mid-2000s was a major upgrade of transmission from Rutland to Chittenden County, and it raised a fundamental policy question, not just in terms of where the line is. When the Public Service Board approved the project, they basically said, ‘We should never have been put in the position of having to approve this project, and we have to because the need is there.’ The board was saying that the planning that should have happened never happened.
That whole process and the board order was a recognition on everyone’s part, including the utilities, that we can’t do business the way we did before.
What happened in Chittenden County was that someone would propose an office park, a shopping mall, a housing development, and the utility would say, ‘we can serve it,’ and then another one. But no one was adding it up. All of a sudden, it was: ‘Oh my God, we don’t have the transmission capacity to get the power here.’
That, more than any single thing, changed how VELCO operates for the better. They began saying, ‘Are there load management and conservation things we can do first? Maybe looking at transmission alternatives is something we should do.’ There is a much more holistic planning process now.
VTD: Are there more recent transformations that are throwing the energy industry for a loop?
In the long run, you could have a national grid structure that is direct current, instead of alternating current, and you could dispatch energy over huge distances. We don’t have the infrastructure to do that now, but you could get to the point of dispatching energy on a continental basis, rather than a regional one. The sun is shining in Arizona and the wind is blowing in Minnesota.
Patt: Utilities pretty much across the entire country are seeing a decline or flat sales growth. At first, utilities thought it was the recession, and that was part of it. But utilities are recognizing this is the new normal, until the next thing. Conservation and efficiency have become embedded in the system and have had their effect.
The latest is distributed (or regionalized) generation of net metering (of small scale renewable energy systems), and it’s showing up in measurable amounts. That whole trend is shaking the industry, just as we thought we knew where we were going.
VTD: Moving forward, how do you think the grid will evolve, and what transformations do you think are most necessary?
Patt: The grid will hopefully evolve, I hope, to adapt to constraints in renewable energy for both industrial scale — I’ve adopted that term — to teeny tiny solar panel net metering systems. We need to change where our energy comes from in a big way, and the grid has to adapt. The issues that have cropped up in the Northeast Kingdom surrounding large-scale wind are real, but it doesn’t mean they can’t be addressed.
We have to learn from a physical point of view how to accommodate large-scale intermittent generation. On a small scale, we need to figure out what’s the fairest, most equitable way for accrediting self-generation.
VTD: The intermittent nature of renewables appears to be the main obstacle for their proliferation as it relates to the grid. Will this continue to be an issue until a hypothetical storage solution is created?
Patt: Obviously storage is a very big part of it. But some of the constraints in the Northeast Kingdom could be accommodated with changes to the poles and wires, and ISO New England could make policy changes. ISO has historically dispatched based on the most economic generators.
You could, in theory, have different priorities and say it’s more of a priority to use the wind when the wind is blowing. But there is a cost to that. The economics are important, but there are other factors. This would need to be a policy decision made by ISO.
VTD: Who could make ISO implement such a policy?
Patt: Vermont could or any of the states in New England that have set policies where they have renewable targets.
VTD: You have butted heads at times with opponents of large wind developments in Vermont.
Patt: One thing I agree with wind opponents on is that up until now there’s been a focus almost completely exclusively on converting renewables for electricity, but we better start doing something about thermal and transportation.
VTD: Are there any new technologies that will have a large effect on the grid?
Patt: In the short term, I think the smart grid at the local level is going to change things, but it’s really hard to predict how much and when. I’ve always been skeptical in our area that it would benefit much from dynamic pricing, when you’d change what you’re doing based on rates.
We have smart meters for over 99 percent of our customers. From the public, there were two areas of concern: one was whether there were health and privacy issues associated with radio frequency smart meters. We avoided a large amount of concerns because we did not install a radio frequency system; we installed what’s called a power line carrier system. So, the communication between the meter and the co-op is actually transmitted over the existing power lines.
We can read our system now. When we’re having outages or voltage irregularities, our ability to diagnose problems is at a much higher level. We’re already saving money.
VTD: Is there a game-changer of technology that would completely revolutionize how power is delivered?
Patt: In the long run, you could have a national grid structure that is direct current, instead of alternating current, and you could dispatch energy over huge distances. We don’t have the infrastructure to do that now, but you could get to the point of dispatching energy on a continental basis, rather than a regional one. The sun is shining in Arizona and the wind is blowing in Minnesota.
VTD: Are you saying the technology is available to provide solar from Arizona or wind from Minnesota to Vermont on a cloudy, windless day?
Patt: From an engineering point of view, on my computer, it’s available. In the real world, is it available today? No. I’m not an engineer, so I just say, ‘Well, that would be great.’ Sometimes, 10 years later, one of these things actually becomes commercially viable.
