Vermont Sees Influx of Funding for Broadband Rollout

WEC plans a third virtual Annual Meeting; transformer shortage affects PowerShift

President’s and General Manager’s Message

Broadband rollout

Steve: Vermont is experiencing an influx of funding related to high-speed internet. There are many more opportunities for federal funding for broadband through various forms: ARPA [the American Rescue Plan Act], NTIA [National Telecommunications and Information Administration], and the USDA ReConnect program, among others.

Louis: To be specific, Governor Scott proposed $200 million to be newly allocated for broadband.

Steve: Yes. So the good news is there’s significant money coming into the state for rural broadband. Any responsible organization willing to partner to benefit its members needs to look at the financial landscape to see what its posture should be. WEC has the joint role of improving the quality of life for its members if it can while providing them reliable, affordable electric power from a financially secure business operation. I think it’s prudent to remain flexible in our partnerships. It would be irresponsible to our members if we didn’t.

Louis: I’ll pick up on what Steve is saying to say that, in general, this overall project that Communication Union Districts [CUDs] and WEC are working towards – providing broadband fiber internet access – hugely benefits from additional grant money. That’s true for all organizations. The more that can be done with grants, and the less that can be done with loans – whatever the source of those loans – is good because it means no interest payments, and no need to pay back money at all. The news is positive for that reason. The likelihood of reasonably priced and reliable broadband high speed internet increases with every grant dollar put toward this project.

Steve: With broadband, our aim has been to find a way for all or most of our members can access high-speed internet in the near future, if they choose. While we would not be the actual broadband service provider, we would like it to be available at a cost that most people would consider affordable. High speed broadband is rapidly becoming a necessity for economic quality of life, business, education, and increasingly, medicine. 

Louis: Another thing is, newly allocated funding would reduce the cost of a smart grid system for WEC. We also plan to use additional fiber for improved metering schemes with the potential for consumer-friendly rate structures.

The additional money that goes into our shared project is indirectly beneficial – by reducing our overall cost, it reduces the cost of the smart grid part of the project as well. That’s a secondary goal, but the Co-op’s goal is to get a smart grid system built out faster and cheaper than we would be able to in the absence of the broadband project. That’s one of the reasons WEC got into the project, and it’s the arrangement that allows us to use federal electric utility loan money to support the project. So, building out our smart grid stands to benefit from broadband grant money as well. Which is great.

Steve: Once the situation gels and if the Board of Directors approves, we’ll still come to our fellow members for a vote of approval of the final plan. 

Louis: I agree. I don’t think it’s responsible for a member-owned organization to contemplate a significant increase in debt without hearing from members. The Board exists to ensure member interests are represented in the Co-op’s policy decisions, but a broader question to the membership before we collectively undertake a loan is wise, whether it’s technically required by law, or not.

Annual Meeting and bylaws

Louis: We’re going to have the Annual Meeting virtually in 2022. I’m particularly sad we can’t have a traditional meeting this year. As the new General Manager, it would frankly be a lot of fun, in addition to an opportunity for learning, and I would really like to meet people in person. So, I’m sorry about this, but it’s too likely we would plan the Annual Meeting and then need to cancel or go to virtual at the last minute, given the current COVID situation.

Steve: We’re all disappointed. The Annual Meeting is an integral part of belonging to the Co-op for those who like to attend. One of the things that makes public power a positive thing is the ability for member-customers to meet directly with their staff and their fellow members who serve on the Board of Directors and voice their opinions and ask questions. It’s a disappointment for all of us to lose that social gathering and forum for doing business, because it cuts at the heart of what the values of a cooperative are.

Louis: Hopefully we’ll have an event later on in the summer where we can gather our membership in person, maybe outside, and we can meet each other and have these conversations face to face. In fact, I’m counting on it.

Steve: The Board approved a change in bylaws to allow for electronic voting for decisions to be taken by the membership. That adds to the ability to vote by mail as well as in person. This recommended change in the bylaws will have to go before the membership. So: members will need to vote by mail in order to approve a bylaw change that would allow for electronic voting in the future.

Transformer shortage

Louis: Steve and I talked in the last issue about the looming transformer shortage and the difficulty and expense of getting transformers. That’s only gotten more severe, to the point where we’re looking at several months out before we get some sizes of transformers. We have enough inventory now for the foreseeable future to keep the system operational. But we’re going to need to slow down or halt installing new transformers for those things that are not essential to keep our distribution system going, and that includes transformer upgrades for electric vehicle supply equipment [EVSE] for fast charging and elements of the PowerShift program, and possibly for some small net metering setups as well. The basic story is, we need to keep enough transformers on hand so that if we lose transformers in a storm, we can replace them to keep the lights on. 

Many years ago, the Co-op and other utilities, at the urging of regulators, went to smaller transformers. The trend then was to use less electricity, and WEC installed a lot of five kilowatt transformers. In recent years, we’ve seen widespread recognition that beneficial electrification reduces our dependence on fossil fuels and lowers emissions. Electricity is a far lower greenhouse gas contributor than other sources, and of course WEC’s power portfolio is 100 percent renewable. So recently, we’ve seen lots of those five kilowatt transformers coming out of the field and going back to the warehouse, and 10 kilowatt transformers and other sizes going out. But right now, with our stock so limited, we need to pause. Our first obligation is to make sure we maintain the electric grid we use to serve our members with power, and that may mean slowing down on some of the other uses.

Steve: It’s difficult to do this at a time we’re offering incentives to our members to exchange their internal combustion engine vehicles for electric vehicles. For those saying “I just bought this EV, why can’t WEC be forward-looking and replace my transformer?” The answer is, running a utility requires constant maintenance and updates of the grid. At this point in the pandemic, it’s hard to get the industrial materials that are essential to running a modern electric utility. But, eventually we will.

Louis: A lot of the reason is that once supplies begin to be constrained for some reason, people start buying up the supply – more than they would normally. The transformer shortage is due to all the labor and material shortage factors, but we and other utilities are also trying to buy more than we normally would, because we can’t count on getting the supply we need. It’s a self-fulfilling prophecy. It’s interesting.

Steve: We’ve seen this particular human quirk many times over the years. I remember lines outside gas stations during the OPEC oil embargo in 1973. You see it in histories of financial panics, runs on the banks when there’s a perceived cash shortage.

Board elections and the environment

Steve: I’m pleased to see that we have numerous candidates in this year’s Board election. More members are contemplating volunteering their contribution to the Co-op. I have to say that being on WEC’s Board has been very educational for me in understanding Vermont’s energy landscape. I will value my education and experience here even after I leave the Board. It’s something I encourage members to think about, if they have the time and inclination and willingness – whether at WEC or another cooperative or community organization. Serve a couple of terms, do your community a service, become knowledgeable at the same time.

Louis: It’s impressive we’re seeing the number of people interested that we are. Boards from nonprofits to school boards and zoning boards are struggling to get applicants, and I’m glad to see that serving our electric cooperative is exciting and interesting to people. Board service does not require a huge time investment, but it can be significant. We’ve seen a number of people interested in or running for seats on WEC’s Board. It’s gratifying to see.

Steve: If I am being honest, I should not assume that I am sure why. But I can’t help but think that the mind-boggling rate of change in the energy industry and its consequences for the future are engaging people’s thoughts, and some are eager to have a role and play a part in a community organization dealing with practical issues. And voila! – here’s a 100 percent renewable public power utility run by its members who oversee it, and attempt to keep it financially secure while focused on its future challenges and opportunities. Energy shapes our quality of life; how we get and use power is important for future generations as our climate continues to change. I think people are generally becoming more aware of the impact of our systems on the natural world we live in, and I’d like to think that’s a positive recognition that drives an interest to serve one’s community. 

Louis: It’s a positive for sure. We also may very well have experienced in our lifetimes the period of time in which the environment has had the least impact on human beings. The rest of our lives and our kids’ lives may see a return to a time when the environment plays a greater role and has more of an impact on our lives, for good and bad. It’s entirely possible the 20th century saw the period of time in which humans were most divorced from the environment. Resource scarcity may return to that not being as true in the 21st century as it was in the 20th.

Steve: It’s a sea change. In the past, people didn’t vote on behalf of their great-grandkids, on behalf of people who hadn’t been born. It’s a new aspect of our society, trying making conscious decisions not only for ourselves but especially for people who are not yet born.

Appreciating Annie and Barry

Steve: I’d like to extend thanks and appreciation to my fellow Board members, Annie Reed and Barry Bernstein, who are not running for re-election after many years of serving our Co-op.I’ve enjoyed serving with them, and learning from them.

Louis: On a personal note, Barry leaving the Board hits me particularly. Growing up, my family was friends with Barry, and still is. Ever since I was fairly young, Barry was always synonymous with WEC. Coming in as General Manager at the same time Barry is leaving feels big. For that reason it’s interesting for me to reflect on him leaving the Board.

Steve: That’s a powerful sentiment. It speaks a lot for Barry and what he’s accomplished.

Louis: I think of it every time I look at the chart on my wall that shows WEC sources of power, 71 percent of which is Coventry. There were a lot of people involved in the work to source power from landfill gas, which would otherwise just be flared into the atmosphere, but Barry played a major role. It’s a constant reminder of where our members’ electricity comes from, and he was and is a substantial part of that.