Green Mountain Power suffered “several millions” of dollars of lost revenue over the past 18 months because northern Vermont’s electrical grid isn’t robust enough, the company’s director of power planning said Thursday.
Washington Electric Co-op experienced a similar setback for the same reason, with around $600,000 in lost revenue over the same period, said Patricia Richards, the utility’s general manager.
Executives made these remarks in Montpelier at a workshop to aid the Public Utility Commission’s investigation into what’s known in electrical utility parlance as the SHEI — the Sheffield-Highgate Electrical Interface.
Most of Vermont’s electrical utilities are feeling at least some revenue pinch because the SHEI — a series of electrical transmission cables encompassing Highgate, Newport, Lyndon and points in between — has reached its capacity, executives said.
Solving the problem could be expensive, but skeptics say the problem could also be a temporary one that might tend to resolve itself as Vermonters increasingly switch power sources from fossil fuels to dams, wind turbines and solar arrays.
The capacity problem relates in part to how much energy is consumed within the SHEI area: Residents within that area on average draw 35 megawatts. Within the same area are wind, solar, thermal and hydroelectric generators that can produce up to 200 megawatts, although they actually produce significantly less than this theoretical maximum.
Hydro-Quebec dumps 225 megawatts into the system as well, to feed long-term contracts with Vermont utilities. Unlike the Vermont-based generators, Hydro-Quebec puts that wattage into SHEI 24 hours a day at full power.
Because wind power can be throttled back to protect the grid when too much electricity is being generated at once, wind generators in the SHEI area sometimes suffer “curtailment,” when New England’s electrical grid authorities force the turbines to produce less power than they’re able.
Of the 105 megawatts of wind power that the region can produce, Green Mountain Power owns the largest contributor — Kingdom Community Wind, which generates up to 63 megawatts. This is also by a wide margin the largest in-state source of power in the SHEI region.
Curtailments on these and other generators meant that GMP has made several millions of dollars less than the company could have over the last 18 months, said Doug Smith, the utility’s director of power planning.
Most Vermont utilities are probably suffering at least some financial setback as a consequence of SHEI’s capacity being reached, Richards said.
The problem arises in part as a consequence of Vermonters’ choice to purchase energy from renewable generators, instead of from fossil fuel and nuclear plants.
Electricity previously came from the south, where the nuclear and fossil fuel plants were; it’s increasingly coming today from the north, where Quebec’s enormous dams are situated and where some of Vermont’s cheapest and most sparsely populated land is found.
Electricity also previously came from just a few utility-scale power plants in a region, and customers brought in only a single direction from those plants to their homes and businesses.
Today, thousands of Vermonters generate their own renewable electricity at their homes or elsewhere and sell it back to utilities, and utility-scale power production might be situated in any number of places where the fossil fuel and nuclear plants of yore could never be built.
In pursuit of renewable energy, the state has had to reverse the way its electrical grid operates, said Christopher Root, Vermont Electric Power Co. chief operating officer. Engineers — of which he is one — “hate when things are used differently than they were designed. It makes them nervous,” Root said.
The SHEI limits don’t just hurt utilities’ bottom line: The capacity shortfall prevents new renewable energy projects from going online in that area, which developers have favored as one of the most affordable places in the state for new electricity generation projects. Last year, utilities raised SHEI’s limits as an objection to a planned power cable that would carry electricity from Quebec to Massachusetts; the project’s backers withdrew soon after.
In fact, all Vermonters are likely to be affected by SHEI’s capacity limits, said James Gibbons, director of resource planning at Burlington Electric Department.
It’s not clear at all how to solve the problem, and it’s even less clear who might pay for the solution, Gibbons said.
“This is the most complicated thing I’ve seen in 27 years with a Vermont utility,” Gibbons told the Public Utility Commission. “This is not going to be simple to solve.”
Neither was the severity of the problem anticipated until recently, he said.
“I certainly did not foresee the magnitude of this,” he said. Smith said the same thing, almost verbatim.
At least one major player in Vermont’s energy industry expressed skepticism that the problem is as drastic as it’s portrayed.
David Blittersdorf, the driving force behind several in-state renewable energy companies, said a cheap solution that’s likely to become far more prevalent in coming years is to simply convert more machines and appliances in the area to run on electricity.
As things like cold-climate heat pumps and electric vehicles become more popular within the SHEI area, they’ll in time draw enough power to free up excess capacity in the power lines, Blittersdorf said. A massive upgrade effort could prove superfluous in that event, he said.
Analysts are currently putting together a long list of possible fixes, Root said. Within months they’ll have price estimates for those proposals. Whether to pursue a short-term fix or a long-term fix, and who pays for it, Root said, “These are the two big questions.”
Public Utility Commission Chairman Anthony Roisman said at the workshop’s conclusion Thursday afternoon that the sizable audience comprised some of the keenest minds in the state and expressed confidence they’d find some satisfactory outcome.