Lebanon
She’s a woman. And a breast cancer survivor. And a vocal proponent of solar, wind and other renewable energy sources.
And she has big ideas. Lots of them. Green Mountain Power, she says, is “creating an energy system that is community, home and business based, and moving the existing grid to be the backup system and have the primary system be one that is inherently more cost-effective, more resilient and environmentally more sound.”
One must step outside of the force field of enthusiasm that surrounded Powell during a one-hour interview with Valley News editors and writers last week to see the economic and political realities that Green Mountain Power faces as it pursues Powell’s green energy agenda.
Among those realities is the roughly $1 billion invested in what Powell describes as “this 130-year-old-plus system that delivers energy” to Vermont businesses and homes.
That’s GMP’s network of high-voltage transmission lines, substations like those in Wilder and White River Junction, and neighborhood transformers and wires that is common of almost all U.S. utilities.
And recent precipitous drops in the prices of fossil fuels have created a toxic economic environment for alternative energy businesses.
And an ownership structure — or, as Powell prefers, investors — that includes an old-line energy company with its own stake in the status quo that, in the eyes of some environmentalists, would have no place in a transformed energy world.
But such realities remain on the periphery of Powell’s vision. Instead, she spotlights her company’s support for the development of solar and wind power and new technologies to store energy from such renewable sources.
She cited a 2015 New Yorker article that focused on a couple who, with GMP’s help, “completely drove carbon out of their home” while making it more comfortable and cost-effective.
Altogether, about 130 houses have had what Powell termed “extreme energy makeovers.” That effort has helped earn Rutland the title, she said, of “solar capital of New England.”
Currently, about one-third of GMP’s power comes from owned or contracted hydroelectric plants, and another 9 percent from other renewable sources, according to the company’s website. That includes power that flows under a long-term deal with Hydro-Quebec, Powell said.
That’s greener than the New England-wide mix of power, which includes about 6 percent hydro and 8 percent other renewables, according to ISO New England, the operator of the regional power grid.
GMP’s rate structure is also, Powell said, “one of the lowest in New England.” That’s especially so for industrial users, whose average rate of 9.9 cents a kilowatt hour in 2013 was the lowest of any of the 14 investor-owned utilities in the region, according to GMP’s website.
Residential users didn’t fare as well. Their average rate of 17 cents a kilowatt hour ranked 10th among the 14, and was 18 percent higher than the regional leader Unitil, according to the GMP website. Unitil serves portions of Maine, New Hampshire and Massachusetts.
Powell envisions dramatic change for Green Mountain Power.
“We are creating a business model that is disrupting our existing business model,” she said. “I could never sit here today and tell you the path is so clear that we’re actually going to make all this money. It’s actually not clear. But what is clear is … if you’re going the way again where your customers want to go and you earn your way into a new value proposition with your customers you will find one.”
Some on Wall Street have a more conventional view of Green Mountain Power’s prospects.
In December, Standard and Poor’s analyst Matthew O’Neill upgraded GMP’s credit rating to A- from BBB+, citing its “focus on low-risk electric transmission and distribution operations and renewable generation, adequate cash flow measures, and continued limited support from Gaz Metro in the form of equity infusions.”
An A- rating puts the company in the lower range of those assessed as having a “strong capacity to meet financial commitments, but somewhat susceptible to adverse economic conditions and changes in circumstances.”
Gaz Metro is the Montreal natural gas distribution company that owns Green Mountain Power.
A majority stake in Gaz Metro belongs to a holding company controlled by some Canadian pension funds and Enbridge, a company with annual revenue of $35 billion that operates pipelines including some that move oil extracted from tar sands in western Canada.
That tar sands oil, which was the intended cargo of the controversial Keystone pipeline project, is anathema to environmentalists.
“Enbridge is one of the companies trying to bring tar sands into the Northeast states,” said Jim Murphy, author of the National Wildlife Foundation’s 2015 report, Tar Sands at Our Doorstep: The Threat to the Lake Champlain Region’s Waters, Wildlife and Climate. “Enbridge has not been a good actor.”
But Murphy did not extend his opprobrium to GMP. “You have to give credit to GMP regardless of their ownership structure for being one of the more forward-thinking utilities in the nation.”
Powell dismissed any misgivings about having a tar sands player as part of Green Mountain Power’s ownership.
“We’re not in the natural gas business at all,” she said. “Everything we’re doing is about radically embracing a completely different energy future. So the work we’re doing is about completely taking fossil fuel out of homes and businesses.”
Powell said GMP’s current owners had preserved “local governance and local control.”
She said that previously, as a publicly traded company, Green Mountain Power was “beholden to Wall Street” and saddled with a couple of million dollars a year in unnecessary costs.
Powell was circumspect about the pending sale of 13 Connecticut River watershed dams by Trans-Canada, another large pipeline company.
She said GMP had met with other Vermont utilities to “to talk about would we have portfolio interest in those units?”
The utilities are deferring to a work group examining a possible state takeover of the dams but could step forward to “complement the state’s effort or to provide a different alternative if the state’s not interested,” she said.
But Powell did not rule out a bid by GMP for some or all of the properties as an addition to the company’s current inventory of generation facilities and long-term contracts.
“We have enough room in the portfolio for where, if there were really good, strategic hydro assets we absolutely would look at them, whether or not they were the TransCanada ones or other ones.”
Powell declined to weigh in on the debate over how much say Vermont municipalities should have on large- and medium-scale wind and solar developments within their borders.
“I’m not going to sit here and prescribe what the state should do from a policy perspective,” she said.
But Green Mountain Power would not proceed on projects without the support of the community, she said. That’s why a no-vote by the Selectboard prompted the company to walk away from plans to develop a 4-megawatt solar array on state property in Windsor, according to Powell.
But that criteria wouldn’t prevent future developments from happening, she predicted: “We obviously don’t feel like it’s impossible to get projects built and work with communities.”
“Would I extrapolate that and say, ‘This is what the Legislature should and should not do?’ Absolutely not.”
Rick Jurgens can be reached at 603-727-3229 or rjurgens@vnews.com.