Addison Independent

VELCO powerline project underscores changing energy use in Vermont


MIDDLEBURY -?As one of Vermont's main thoroughfares, Route 7 is a natural magnet for development. Driving along the road from Burlington through Addison County, that development is plainly obvious: car dealerships and hi-tech companies line Shelburne Road, the part of Route 7 that links South Burlington to Shelburne. Further south, in towns such as Ferrisburgh and Middlebury, businesses have grown up alongside the highway, using it as a conduit to make and move goods or attract customers.

The view above street level tells an equally good story about growth along the part of the Route 7 corridor, a story about how growth in northwestern Vermont -?northern Addison County, and Chittenden and Franklin counties - is changing where and when energy is consumed in the state.

A proposed upgrade of the transmission lines that parallel Route 7 - the Northwest Reliability Project, which is being planned by the Vermont Electric Co., or VELCO - underscores, and is some ways a product of, these changes.

VELCO officials say the multi-million-dollar upgrade, which includes new, bigger towers spanning from West Rutland to Burlington, is designed to meet growing energy demand in northwestern Vermont, the fastest-growing region in the state, a demand that they claim is pushing the limits of supply and the capacity of the lines to carry it - and will continue to in the future.

New England regional and state power planners agree that increasing demand is diminishing the reliability of energy transmission in northwestern Vermont, a trend that has implications for ratepayers throughout the state.


The implications stem from when energy demand is peaking, and a new pricing mechanism for electricity instituted in March.

Every year since 2001, energy use in Vermont has peaked twice: once in the winter, and once again in the summer. Analysts say that summer peaks will soon exceed the winter ones, a shift driven primarily by new construction - residential and commercial - in northwestern Vermont. Summer peaks, experts say, consume more energy than ones that take place in the colder months, which means higher costs for ratepayers.

Power costs will likely be magnified by a new pricing system set by ISO-New England, an independent body that sets wholesale electricity rates for New England states. Until 2003 energy used at peak times was spread or "socialized" among New England ratepayers; the new system, however, concentrates the price of using energy during peak times among a single state's ratepayers. The resulting rate increase could figure in the tens of millions of dollars over the next decade just for Vermont, according to ISO-New England and VELCO officials.


"Anything that cools works harder in the hotter months," noted Public Service Department Commissioner David O'Brien of the machines driving energy demand to peak in the summer.

Of these machines, air conditioning units -?particularly central air conditioning installed in new residential or commercial space - seem to be pushing electricity consumption in the summer beyond the traditional winter peak.

As new construction boomed in Chittenden and Franklin counties and northern parts of Addison County during the 1990s, demand for air conditioners increased apace. Analysts with the Chittenden County Regional Planning Commission said that many units were likely installed in new housing built during the 1990s, which grew 13 percent between 1990 and 2000, about 5 percent above the state average.

The machines weren't limited to big homes, either: big box stores and hi-tech companies reliant upon large, energy-intensive Internet servers to store data, also made air conditioning a common fixture in offices and malls throughout the region.


According to Steve Allen, principal for the South Burlington-based real estate appraiser and research firm Allen & Brooks, retail space in Chittenden County grew by 1,332,000 square feet between 1994 and 2002; 1,422,000 square feet of office space was added in the same period, and industrial space increased by 3,024,000 square feet.

The resulting energy increase underscored a decades-old trend toward development in northwestern Vermont, according to O'Brien.

"The turn for Burlington started in the 1960s," O'Brien said, noting that population increases in Chittenden and adjacent counties marked a departure from growth in industrial hubs like Rutland or Springfield.

Something else was changing, too: In 2001 O'Brien and other state analysts noticed that summer energy use was at the same level as use during the winter, the product of a more than decade-long trend of rising electricity consumption in the warmer months. In the summer of 2002, a period that saw four heat waves sweep across New England, energy use in Vermont peaked slightly above the winter high of around 1,000 megawatts (mW).

It was around the second week of August last year that summer energy use topped out; milder temperatures this year, however, have meant that electricity demand hasn't quite reached the same level as last year - but that could change in the weeks before the fall, O'Brien said.


For VELCO planners, last summer's heat waves - and the consequent spike in energy demand - fueled their efforts to seek public and state approval to upgrade transmission lines from West Rutland to South Burlington.

The upgrade, if OK'd, would mean replacing 52-foot towers carrying 115 kilovolts (kV) of electricity with ones 27 feet taller with 345 kV lines in Leicester, Middlebury and Salisbury. For Ferrisburgh, New Haven, Waltham and Vergennes, 61-foot-tall towers carrying 115 kV would replace the older 34 kV, 35.6-foot towers.

The plan also calls for a multi-million dollar upgrade to the New Haven substation.

A major impetus for the upgrade, according to VELCO project manager Tom Dunn, is the diminishing reliability of existing power lines to deliver electricity at a rate equal with demand in northwestern Vermont, which ISO-New England officials predicted will continue to grow between 2 percent and 3 percent in the summer alone.

"Northwest Vermont has a serious reliability problem," Dunn said of the network, which, if demand keeps growing, could spark transmission problems that might "migrate" to other states in the New England grid.

"We have an obligation to not be the weak link," Dunn said.

Ellen Foley, a spokeswoman for ISO-New England, concurred with Dunn.

"(VELCO's) load is being delivered on low-voltage lines," explained Foley. "And 345 kV lines are the backbone of electricity delivery in New England."

ISO, which was created by the Federal Energy Regulatory Commission in the late 1990s, acts as a "wholesale electricity stock exchange" for the 200 utilities that are its members. VELCO, which itself is jointly owned by 16 Vermont power companies, is one of those members, and is therefore charged with ensuring reliable electricity delivery on its part of the New England power grid.


This raises alarm bells for Monkton resident Ken Wheeling, a member of Vermont Citizens for Safe Energy, an activist group that has been a longtime opponent of the VELCO upgrade, even though the upgrade line no long includes Monkton.

Wheeling contends that VELCO's main interest is the sale of electricity outside of Vermont.

"They've figured out if they make reliability an issue they'll get more support, but that's not the whole skinny," Wheeling said.

Wheeling explained that he not only wants more explanation of VELCO's obligation to state ratepayers, but also greater clarity of the potential health effects of the power lines it proposes to run across 34 miles of Addison County land.

"They (VELCO planners) are still stuck on page one," Wheeling said. "The more I look at it, the more I want solid evidence" that the power lines do not pose a health threat.


While Wheeling remains at odds with VELCO over the potential health risks associated with power lines - at a public meeting on the upgrade in Salisbury, Dunn referred to a 1999 report by the National Institute of Environmental Health Sciences that concluded such health risks were "small" or "weak" - the transmission company is bearing at least some of the cost of the new pricing system instituted in March.

The pricing mechanism, called a "marginal" or location-based system, divided New England states into eight "zones" - three in Massachusetts and five in the remaining states. Points within each of these zones monitor energy use to show when demand has peaked or electricity transmission is congested.

Created by ISO-New England, the pricing mechanism pits the cost of alleviating that congestion on the single zone, which, in Vermont's case, is the entire state. Regardless of which region within the zone is generating the greatest demand for energy, all ratepayers must foot the bill.

O'Brien confirmed that the new pricing mechanism would have the effect of driving electricity prices up, but added that it was too early to provide an exact figure of how much.

Whatever the cost, Dunn and Foley said, rates could change if the reliability of the transmission system is improved.

"With the load growing I would expect prices to go up," Dunn said. Costs will be higher if "we do nothing," he continued. ALTERNATIVES

The VELCO upgrade is still in its early days, however. Dunn said that the company hopes to receive a "certificate of public good," which is necessary for the project to proceed, from the state Public Service Board in late spring 2004.

"It's a long process," noted Dunn.

In the meantime, those active promoting energy efficiency and what's called demand-side management - reducing energy use at the consumer end - see an opportunity for state officials to consider the balance between electricity transmission and the sources of that power.

Deb Sachs, executive director of the Alliance for Climate Action, a consortium of state, regional and nonprofit environmental groups, believes that reliable energy transmission should be paired with rigorous efficiency measures and greater reliance on renewable energy sources.

"All three need to be healthy," Sachs explained