Vermont Electric Cooperative

Source: Energy Digital

Date :9/17/2007 6:50:57 AM

Sourcing Clean Power

Vermont Electric Cooperative is providing a rural customers with electric power that is both clean, and affordable.

Written by James Buchanan & Produced by Melissa Abbott

It may come as something of a surprise to find out that the vast majority of the landmass in the United States is not served by large, investor owned electric utilities.

Rather, 75 percent of the landmass is served by smaller electric cooperatives that came into being during the 1930s in an effort to bring electricity to rural America.

For 70 years or more these small cooperatives have been the heart and soul of how those living in the vast stretches of America’s rugged and rural lands have gone from the days of kerosene lanterns to electric lights, and now compact fluorescent light bulbs and even broadband Internet.

In fact, these cooperatives are in many ways taking a lead in developing renewable sources of power, as well as in encouraging their members (in a cooperative a customer is a member/owner rather than simply a customer) to be more mindful of how they use electricity.

The Vermont Electric Cooperative (VEC) — just one of more than 900 that exist in the U.S. — serves approximately 38,000 members in northern Vermont. Further, the WEC is taking some innovative steps to provide its customers with sustainable, clean, and stable electric power in an ever changing electric generating environment.

According to David Hallquist, VP and CEO of the VEC, the territory served by the cooperative is rural and mountainous, with 50 percent of its lines running through woods.

This removed and rugged landscape alone presents challenges to the cooperative when it comes to maintaining its infrastructure, but the cooperative faces a number of other issues common to cooperatives and large utilities alike.

In particular, managing volatility within the energy market, while also taking into account the need to reduce the cooperative’s carbon footprint to mitigate its impact on global warming, has become a front burner issue for the VEC.

Like other cooperatives, says Hallquist, the VEC has largely been reliant on purchasing electricity from the broader market, which is subject to wide price variations due to the fluctuating cost of fossil fuels. In 2003 the cost for a kilowatt hour of electricity was 3.9 cents. A year later that price had more than doubled to more than 8 cents per kilowatt hour.

“We don’t believe that these prices will likely go back to their 2003 level,” he says. “Our big challenge is the same that electric utilities face nationwide — which is how to manage global warming without putting everybody out of business.”

He goes on to add that the VEC’s members — according to research done by the cooperative — tend to prefer price stability to cost.

“Spot buying can be brutal in its swings,” says Hallquist.

Therefore, finding a means to generate electricity would go a long way toward stabilizing prices for the cooperatives customers. Finding a carbon neutral means to do this is a bonus.

According to Hallquist, Vermont is unique in that traditional power generating fuels or systems are not readily available, especially when considering the removed local of the VEC’s members. For example, hydro power has been essentially tapped out in the state; there is no gas infrastructure to speak of; and there are few railroads to bring coal or other fuels.

The answer the cooperative has hit upon is gasification electric generation.

Gasification is a highly efficient process for extracting energy from biomass (organic matter) by exposing it to high temperatures that cause the biomass to emit synthesis gas (syngas), which is a fuel that can be used to power turbines. Further, syngas is a very clean burning substance that emits water vapor and the same amount of carbon dioxide as if the biomass were to decompose naturally.

The waste heat from this process can also be used to heat nearby buildings or for process heat within the facility, says Hallquist.

The cooperative has made the decision to build 15 one megawatt gasification generating facilities, which Hallquist says will provide 20 percent to 25 percent of the VEC’s base electric load requirements.

He adds that the plants will be distributed throughout the VEC’s service territory, “Wherever there is a place that could use the residual heat.”

To build the plants the VEC has entered into a rather unique three-way partnership arrangement. Enerkem Technologies, based in Sherbrooke, Quebec, will provide the technical expertise to build the plants, while Sealander Waterworks of Stanstead, Quebec, will provide the facility to construct the components for the plant.

The first plant is expected to be installed near a manufacturing facility in Derby Line, Vt., which is expected to take advantage of the excess heat produced by the gasification process.

Further, Hallquist says the facility in Stanstead literally straddles the U.S./Canada border allowing workers from both countries to participate in the project.

“This is rather unique because we have been given permission to have American workers enter one side and Canadian workers enter on the other without having to pass through customs,” he says.

According to Hallquist, gasification plants are able to use a number of fuels such as wood, straw grass, and municipal solid waste and sewage.

Since most of Vermont is forested, wood could work well and is under consideration for future use by the VEC. However, Hallquist says the cooperative is focused on municipal waste and sewage to fire at least its first plant. He also says that due to a number of factors, there would be a net negative (to the cooperative’s benefit) cost for this fuel source.

“This is what we look to for the future as far as being able to generate our own electricity, because the reality is that we don’t really have an alternative,” he says.

The plants are expected to cost $2 million each, and are being funded primarily through grants. The Canadian government is also working wit the VEC to help fund the plants.

Stepping into the role of electric generator isn’t the only change coming to the VEC.

“Our members are pushing hard for broadband, which hasn’t quite reached all of the rural areas of the country,” says Hallquist. “The lack of broadband in rural America is similar to electric coverage in the U.S. during the 1930s. Sixty percent of our customers rely on phone lines for their Internet.”

To bring broadband to its members, the VEC has entered into a unique partnership with Northern Enterprises Inc., a 501(c)3 non-profit created by the Economic Development Council of Northern Vermont to expand economic development, education and social levels of the area, to put fiber lines in what Hallquist describes as the electric space.

Northern Enterprises is designing and installing an approximately 400 mile network of fiber lines on the VEC’s infrastructure.

“By using the electrical space we have been able to drive costs down for the project,” says Hallquist.

The fiber network will also provide the cooperative with a free fiber backbone for its IT communications systems.

Looking to the future, Hallquist says he expects there will be continued consolidation within the Vermont municipal electric utilities — which are utilities serving specific municipalities.

The VEC has been approached by a few of these asking if the cooperative would be interested in purchasing the municipal utility. However, after a recent acquisition, which more than doubled its membership, the VEC needs to do a substantial amount of work on the newly gained infrastructure.

Until that is completed, new acquisitions have been put on hold