2022 marked by major storm, broadband make-ready, rate increase
By Stephen Knowlton
Washington Electric Cooperative faced two major challenges in 2022. First, Winter Storm Elliott joined us all for Christmas like an unexpected relative, making the holidays more difficult and less comfortable for many WEC members and their actual relatives. As I write this, I find it pleasant to have snow finally arrive without all the drama. Second, like utilities around New England, the Co-op was obligated to increase its rates, mainly to cover sharply increased electricity costs over the previous year.
But let’s consider some cheerier news first.
Broadband
Until early 2021, WEC was working with Communications Union Districts (CUDs) to jointly bring broadband access by fiber to most WEC members. We have been aware for years that WEC’s territory is the most underserved by broadband of any utility in the state, and many WEC members have approached the Co-op to see if we could help provide a solution. While we began working towards that goal, federal grant funding became available to the CUDs, which enabled them to pursue fiber build-out on their own without WEC borrowing money to build the fiber network.
Nonetheless, WEC remains a key part of the “make-ready” process, preparing our utility poles for the stringing of fiber bundles in concert with the broadband provider.
The utility is reimbursed for the costs in labor and materials directly related to that make-ready work. WEC recognizes our cooperative role in the communities we serve and what good broadband access means to our members who don’t have it, and is speedily carrying out this work. We recognize that deploying broadband in rural parts of our state is similar to building out electrical lines more than 80 years ago.
Rate increase
Returning to WEC’s rate increase: Treasurer Donald Douglas’ report in this issue highlights the reasons for it. As the reader probably knows, cooperatives like WEC are not-for-profit, and revenues are collected to meet our operating expenses and loan requirements. WEC does not raise our members’ rates simply to increase income – the Board, which is composed entirely of members, wouldn’t allow that, and neither would state regulators.
Vermont energy planners have much to learn about the implementation of a modern, integrated grid, and further steps toward renewability with intermittent resources will need a systematic approach.
– Stephen Knowlton
WEC has long-term power-purchasing contracts for renewable power with most of our suppliers to meet our members’ needs. But when demand for electricity is high (as it is in winter months), and when power generators may not be able to deliver as much as expected (as was the case with the Coventry landfill gas-to-electricity plant last year), WEC purchases power at market rates to cover the shortfall despite our array of power contracts in hand.
Since last winter, WEC upgraded the processing of landfill gas at our Coventry plant, and landfill gas production is coming back toward normal levels. WEC is also taking steps to diversify our renewable power portfolio. The intent is to reduce the impact of something like this happening in the future. While the unplanned reduction of power from the landfill exacerbated the need for the rate increase, the hike in energy cost was not out of line with that at other Vermont utilities, and was less severe than at many other utilities in New England that rely more on natural gas for their baseload production.
Approaches to a renewable grid
The message here is broader than WEC’s generation from Coventry: most renewable resources, and even some non-renewable ones, may vary in what they are capable of delivering at any given time. Unpredictability can lead to increases in cost, depending on what we can replace the missing power with at the time we need it.
Some resources are far more variable than the landfill gas facility. Solar and wind energy resources, a minor but rapidly growing component of the world’s electric energy portfolio, are expected to ultimately displace most fossil fuels from the production of electricity. Nonetheless, solar power clearly varies with the time of day and the season, and both wind and solar production remain unpredictably dependent on local weather, giving rise to uncertain forecasts in what can be delivered to consumers at any specific time.
To address the issue of a majority of our electricity coming from intermittent renewable resources, most reputable engineering approaches that I’m aware of call for a combination of 1. very large amounts of battery storage to manage day-to-day variation of solar and wind, 2. delivery of power from distant renewable generators via new transmission lines from surrounding regions (the wind may be blowing in the Midwest or off-shore when it isn’t here, and vice versa), and 3. management of customer demand through voluntary or involuntary curtailment of power if necessary. These represent significant changes from the way today’s electric grid is typically operated.
Having 100% of Vermont’s electricity come entirely from a range of renewable sources is possible in principle. But the investment required and the challenges to the stability of the grid are likely to be substantial as more intermittent renewables are added to the mix. A successful approach will require forethought and design.
And when it comes to whether an approach is equitable, there is always the question of who wins and who loses. As a cooperative, WEC and our Board attempt to represent the interests of ALL member-ratepayers when we make decisions about our own operations and in response to state directives.
A renewable industry group has recently called for an accelerated transition to fully renewable electric power without regulatory review, with new facilities mostly required to be sited in Vermont. It’s legitimate and to be expected that a trade association will promote an ambitious course of action favorable to the business interests of its members, and their products are beneficial for expanding clean power production where it’s not already renewable. But we ratepayers should be aware of the expected cost, impact on reliability, the chance for success in achieving greater reduction of greenhouse gas emissions, and who will bear the financial burden, before we are requested to foot the bill. Vermont energy planners have much to learn about the successful implementation of a modern, integrated grid, and further steps toward renewability with intermittent resources will need a systematic approach.
Fortunately, Vermont’s electric energy supply is already in good shape regarding our environmental footprint, and is meeting the deadlines set by the state’s five-year-old Renewable Energy Standard. The 2022 Annual Energy Report of the Energy Action Network reports that Vermont’s electric energy sector as a whole is responsible for only about 2% of the greenhouse gas emissions from human activity in the state, compared to far higher proportions of emissions from heating buildings, our use of cars and trucks, and other areas. A few utilities, like WEC, are already fully renewable. Other utilities, such as Green Mountain Power and Vermont Electric Co-op, are largely carbon-free in their power portfolios and will likely be fully renewable by the end of this decade, and it’s expected that greenhouse gas emissions from Vermont’s electric sector will continue to trend downward without additional legislative action. Looking to the future, state policy is promoting increased use of renewable electricity for transportation and heating. One role of utilities like WEC is to deliver clean power reliably and at reasonable cost to encourage this anticipated increase in electric load.
As a rule, the Board tries to focus on issues of importance to WEC’s member-owners, who are also its ratepayers. First, the Board is an active steward of WEC’s finances. Second, we try to act on the environmental and social concerns of WEC members in such a way that all members are treated as equitably as possible. In carrying out WEC’s stated mission within the changing world of utility policy and expectations, our goal is to ensure that WEC continues to engage in a way that reflects the values of the people who live in this snowy rural corner of New England.