2010 Performance

Measures Report
585 Plne Street - 8urllngton, vT 0540l-489l - 802/658-0300 - PAX: 802/865-7500 - TT: 802/865-7386
www.burllngtonelectrlc.com
BurlingtonElectricDepartment
...successfullytransitioningtoapostcarboneconomy
Smart Grid
Building a platform for the future
Anemergingtechnology
isVehicletoGrid.In
thefuture,carsmaybe
abletopluginatnightto
fll up and return some
powertothegridduring
thedaysmartmeters
willtracktheusage.
Chargingstationssuchas
thisareanintegralpart
ofthistransition.
Anautomatic
temperature
controlsystem
willbetter
allow
customersto
saveenergy.
Renewableenergywillbebetter
integratedintothegrid.
BurlingtonElectricCommission
585PineStreet
Burlington,Vermont05401
SpencerNewman,Chair
PaulHines,ViceChair
RobertHerendeen
ScottMoody
JeanOSullivan
To: AllBEDratepayersandcitizensofBurlington
From: SpencerNewman
Date: March2011
Re: PerformanceMeasuresReport
WearepleasedtopresentBurlingtonElectricDepartmentsPerformanceMeasuresReportfor2010.We
have been preparing these reports since 1998 for the benefit of the Burlington City Council and our
ratepayers. Each year, BED conducts a comprehensive selfexamination and presents the findings in this
report. Performance measurement helps us achieve several important goals for the organization, involving
accountability,service,costs,strategicplanningandmanagement.
This year,we want to share our excitement as we begin the process of transitioning to a smart grid.
Thisprojectwillmovetheelectricitysectorintothe21
st
century, makingitmoreefficient,cleaner, andmore
reliable. We want to keep our customers informed as the process unfolds. The smart grid will further
strengthen the relationship BED has with its customers, and customer involvement will make all the
differenceinhowsuccessfulweare.
Unlike the way the grid has run for more than a century, a smart grid will provide twoway
communication between BED and its customers, which will help reduce peak loads, improve energy
efficiencyandreliability,andallowformorelocallyownedrenewableelectricitytoenterthegrid.Visitour
websiteatwww.burlingtonelectric.com toseethelatestupdatesonthismajorproject,whichwilltakeplace
overseveral years.Thisisthebeginningofanentirelynewwayofprovidingfortheelectricalneedsofour
customers,and willallowustoworkevenmorecloselywithBurlingtonsresidentsandbusinessestomake
themostefficientuseofournaturalresources.
AtBED,weareproudofour106yearhistoryasapubliclyownedutility.Weareproudtohaveled with
energyefficiencyandrenewableenergy,andwenowtake onthesmartgridwithenthusiasm.
INTRODUCTION
Burlington Electric is a department of City government and an essential part of Burlingtons
infrastructure. But BED is more than that. As a public utility, BED is an expression of the communitys
commitmenttonotforprofitrates,localcontrol,and sustainability.
In addition to notforprofit rates, BED offers customers the right to participate directly in the most
important decisions about the future of the utility. This illustrates the importance of communitybased
decisions about our energy future because they reflect local values such as renewable energy (residents
supported the construction of the McNeil Generating Station 27 years ago) energy efficiency (residents
approvedan $11.3 million bond to help reduceenergyconsumption in 1990) systemreliability (residents
approved a $36.6 million bond in 2009 for upgrades and other projects), and environmental protection
(reducedconsumptionmeanslesspollution).
Were proud to serve Burlington and will continue to be responsive to the community. This report is
intended to help explain what we do and to help us measure our progress over time. We invite your
commentsandsuggestions.
2 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
MARKET &REVENUES
BED provides electric service to more than 16,000 residential customers and 3,700 commercial
and industrial customers. For a variety of reasons, including a very large number of students, BEDs
turnover in residential accounts is more than
6,000 per year. This is a remarkable amount
of account management for a utility of this
size and contributes to somewhat higher than
averagecustomerservicecosts.
On the other hand, BED has two large
customers that represent 29% of total sales.
Not surprisingly, commercial and industrial
customers use much more electricity than
residentialcustomers and accountfor64% of
revenues.
All BED customers expect certain
fundamental services reliable and safe
electricity,professionalandcourteousservice,
andaffordablebills.Eachcustomergroup has
unique needs, however. Thats why we have
tailoredourprogramsandservicestomeettheneeds
ofeachgroup.
SERVICEQUALITY&CUSTOMERSATISFACTION
LikeallVermontutilities,BEDisrequiredtosubmitaquarterlyServiceQualityandReliabilityPlan
(SQRP) totheDepartment ofPublicService.TheSQRP establishes standards for avarietyof performance
criteria, including the number of incorrect bills, worker injuries, customer notification of outages, and the
time required to restore power following an unscheduled outage. Other categories are related to customer
serviceandpowerreliability.
Eachutilityisexpected tomeet these minimumperformancestandards.BEDperformedfarbetterinmost
categoriesthanrequired andhadnoviolationsatall insomeareas.In onlyoneareadidBEDexceedthestate
standard: lost time severity. The reason is because an injured employee was unable to schedule needed
surgeryfortwomonths(abacklogthatwasbeyondhiscontrol).Whilewaitingforthesurgery,heworkedin
arestrictedcapacity,which(oddly)isconsideredlosttime.Otherthanthat,onlytwo otheremployees lost
timefromworkrelatedinjuriesafterthedayofanincident.
BEDwillcontinuetoworkhardonservicequalityandreliability. Weknowourcustomersexpectnoless.
PerformanceArea Standard BED
%Billsfoundinaccurate 0.1% 0.0%
%Billsestimated 5% 0.3%
%Customerrequestedworkcompletedbypromiseddeliverydate 95% 100%
Average#ofcustomerinterruptionsperyear 2.1 0.7
Averagedurationofcustomerinterruption(hours) 1.2 1.0
Losttimeincidents/year(injuryleadingto lostworktime) <=3.5 2.8
Losttimeseverity(totalworkdaysmissedduetoinjury) <=71 76.1
Residential
25%
Commercial
49%
Industrial
15%
OtherSales
1%
Other
Revenues
10%
FY10OperatingRevenuesbySource
3 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
RATESANDBILLS
BED had a rate increase in 2009 it did not
haveonein2010,and expectsnoincrease forFY
2011 (which is more than half over) and as of
now isnotplanninganincreaseforFY2012.
Although rates are an important indicator,
they tell only part of the story. A customer's bill
reflects the rate times the amount of electricity
used.Thus,customerswhoaremoreefficientand
uselesspowerhavelowerbills.
RESIDENTIALCUSTOMERS
Even after recent rate increases, BEDs
residentialrateswereonly1%higher thanthe
statewideaveragein2009.
In addition to competitive rates, Burlington
residentshavemanaged theirelectricusethrough
energy efficiency (see p.5). The combination has
produced relatively stable bills for Burlington
residents.
Burlingtons averageresidential bills were
23%less thanthestatewideaveragein2009.
Avg.res.rate
(cents/kWh)
Avg.res.
Annualbill
Burlington 14.94 $785
Vermont 14.83 $1,024
In2009,anaverageBurlingtonresidential
customer paid $239 less per year than the
statewide average. Overall, this represented
aggregate savings of $3.9 million in 2009
money that could be saved or spent in the local
economy. These savings also help lower housing
costs, which is important in Burlington's tight
housingmarket.
Note: Some of the difference in usage and bills
reflects thenumberofsmallrentalunitsinBurlington.
Utilities have different rate designs that make
comparisonsdifficult.Theeasiestwaytomeasure
performance is to compare average revenues per
kilowatthour total revenue divided by kWh
sales. This is called average rates and is a
standardmeasureforthepriceofelectricitytothe
consumer.
0
2
4
6
8
10
12
14
16
C
e
n
t
s

k
W
h
BED'saverageoverallrateswere5.7%higher
thanthestatewideaveragein2009
Burlington Vermontavg.
0
2
4
6
8
10
12
14
16
C
e
n
t
s

k
W
h
Evenwithrecentincreases,residentialrates
wereonly1%higher thanthestatewide
averagein2009
Burlington Vermontavg.
$0
$200
$400
$600
$800
$1,000
$1,200
A
v
e
r
a
g
e

a
n
n
u
a
l

b
i
l
l
Burlington's2009averageresidentialbill
was$239lessthanthestatewideaverage
Burlington Vermontavg.
4 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
RATESANDBILLS
The 2009 inflationadjusted average
annual residential bill was still lower than in
1990. This is especially noteworthy in contrast
to the rising costs of other energy sources. For
example, according to the U.S. Department of
Energy, the inflationadjusted price of natural
gas for residential customers in 2009 was 82%
higher than in1990.
COMMERCIAL&INDUSTRIAL
CUSTOMERS
Average commercial and industrial rates
declined a bit in 2008 but rose in 2009.
Although BEDs rates remain higher than the
statewide average, the gap is expected to close
inthenextfewyears.
Recentrateincreases were drivenlargelyby
expiring power contracts at old prices and the
need to replace them with contracts at higher
market rates. Fortunately, the majority of
impacts from the deregulated markets are
alreadybuiltintoourrates.
CVPS and GMP have not yet absorbed as
much of the newmarket prices because of their
existing Hydro Quebec and Vermont Yankee
contracts. When the contracts expire in 2012,
those utilities will have to replace them,
probably athighercost.Atthatpoint,theirrates
(and the statewide average) will very likely
catchupwithBEDsincreases.
In addition, BED will make the final
payment on the majority of its outstanding
revenue bonds in 2014 (including those for the
McNeil Plant). This will reduce costs and help
stabilizerates goingforward.
The bottom graph shows a comparison of
BED's overall rates with other New England
states. To the extent electric rates are a real or
perceived issue for economic development,
Burlingtonisingood shapewithintheregion.
In any case, rates are still only half the
picture. Along with the efforts to reduce rates,
BEDs Energy Services staff have helped C&I
customers reduce their consumption through
energyefficiencyinitiatives(seepages5 and6).
Thecombinedeffectispowerful.
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
A
v
e
r
a
g
e

a
n
n
u
a
l

b
i
l
l
The2009inflationadjustedaverageresidential
billisstilllowerthanitwasin1990
Actual Inflationadjusted
0
2
4
6
8
10
12
14
C
e
n
t
s

k
W
h
BED'scommercial&industrialratesgrew6%
in2009butareonly10%higherthanin1995
Burlington Vermontavg.
12.75
13.09
13.34
14.23
15.13
15.45 15.52
18.06
0
2
4
6
8
10
12
14
16
18
20
VT ME BED RI NH MA NY CT
C
e
n
t
s

k
W
h
2009RetailPriceofElectricity
(averageforallsectors)
5 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
ENERGYEFFICIENCY
Burlington voters approved an $11.3
million energy efficiency bond in 1990.
BED invested those funds wisely and the
resultsaredescribedbelow.BEDcustomers
(like all others statewide) pay a small
monthlychargethatsupportsBEDs energy
efficiency efforts.
BEDpartnerswithEfficiencyVermont
on the retail products program. Customers
receive rebates for buying Energy Star
lighting and appliances at local retailers. In
2010, BED customerspurchased morethan
22,000 compact fluorescent bulbs, 239
washing machines, 225 air conditioners,
and285 refrigerators.
Altogether, BED has invested $15.6
million in energy efficiency and has
leveraged another $19.7 million in
private funds from our customers. Almost
all of these dollars recirculate in the local
economy.Theeffecthasbeendramatic.
Overall electricity use in 2010 was
only2%greaterthan in1989. Duringthe
same period, statewide use of electricity
increased by 17%. Thus, we are meeting
the needsof a growing localeconomywith
about the same amount of electricity as we
used 20 years ago. The efficiency
investments saved Burlington customers
$13.2 millionin2010 alone.
Furthermore, efficiency investments
helped Burlington avoid the release of
44,644 tons of CO
2
in 2010, equivalent to
removing11,656 carsfromthe highways.
All customers pay for efficiency
investments in their bills, so BED has
programs tailored for all rate classes. The
graphs at left and next page show the
distribution of resources and savings for
residential and commercial / industrial
customers.
BED's Energy Services staff worked
with dozens of customers in 2010 to
implement efficiency projects that save
energy, enhance facilities, and improve
competitiveness. Total customer savings
were$1,029,864.Forexample:
200,000
250,000
300,000
350,000
400,000
450,000
500,000
78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
M
W
H
TotalElectricEnergyUsefor
theCityofBurlington(MWh)
ActualEnergyUse ProjectedEnergyUsew/oEfficiency
Theareabetween thelinesrepresentsthe
amountofenergysavedbyconsumers
from1989to2010fromefficiency.
Withoutenergyefficiency,Burlington's
loadwouldhavebeen26%greaterin
2010thenin1989.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
A
n
n
u
a
l

k
W
h
Burlington'saverageannualresidentialelectric
usageis29%lowerthanitwasin1989
Burlington Vermontavg.
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
90 92 94 96 98 00 02 04 06 08 10
C
u
m
u
l
a
t
i
v
e

M
W
h

S
a
v
i
n
g
s
I
n
v
e
s
t
m
e
n
t

(
0
0
0
'
s
)
ResidentialEnergyEfficiencyInvestmentsand
CumulativeMWHSavings
BEDInvestment$ ParticipantInvestment$
CumulativeMWh
6 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
ENERGYEFFICIENCY
BEDs Energy Services staff
worked successfully with Fletcher
Allen Health Care on their new
Radiation Oncology wing. The
building is LEED certified and
includes high levels of energy
efficiency, especially with the
lightingandcontrolspackage.
BED also worked closely with
the Department of Public Works
WaterandWastewaterDivisions on
replacing aeration blowers with
more efficient motors, as well as
variable frequency drive controls.
The project resulted in substantial
energy savings and reduced
maintenancecosts.
RELIABILITY
Aninterruptionofpowerisconsideredanoutageifitexceedsfiveminutes.Outagesareeitherplanned
or unplanned.Planned outagesare generallyshorter in duration, affectasmaller numberof customers,and
arewarnedinadvancegivingcustomerstimetoprepare.PlannedoutagesallowBEDstaff tosafelyperform
routinemaintenanceandupgradefacilities.Unplannedoutagesusuallyimpactalargernumberofcustomers,
occurwithoutwarning,andaregenerallylongerinduration.Mostarecausedby weather, equipmentfailure,
andanimalortreecontact.
BEDsincreasedinvestments in
capital improvements are intended
to improve reliability and they are
payingoff. Unplannedoutageswere
downalmost16%lastyear.
BEDmoved alargetransformer
from the waterfront to the McNeil
Plant and installed a new circuit
between McNeil and the East
Avenue substations. These changes
have improved system reliability
significantly and have reduced
operatingcosts by eliminating GMP
transmissioncharges.
According to a report from the
Lawrence Berkeley National
Laboratory (using data from 2006),
BED ranked in the top 10% in the
nationforreliability.
84
96
90
110
102
109
97
88 86
96
81
15
11
7
32
56
151
184
86
65
80
75
0
50
100
150
200
250
300
00 01 02 03 04 05 06 07 08 09 10
N
u
m
b
e
r

o
f

o
u
t
a
g
e
s
DistributionSystem
Planned&UnplannedOutages
UnplannedOutages PlannedOutages
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
90 92 94 96 98 00 02 04 06 08 10
C
u
m
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l
a
t
i
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e

M
W
h

s
a
v
i
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g
s
I
n
v
e
s
t
m
e
m
t

(
0
0
0
'
s
)
Commercial&Industrial
EnergyEfficiencyInvestments
andCumulativeMWhSavings
BEDInvestment$ ParticipantInvestment$ CumulativeMWh
7 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
POWERSUPPLY
BEDs power supplyreflects a number of considerations including cost, renewability,reliability, diversity,
and other economic and environmental impacts. While cost is always critical, other factors influence
purchasedecisions.BEDhassucceededinmaintainingcomparativelylowandstablerates,whilecontinuing
our commitment to renewables and, to the extent possible, keeping money in Vermont by supporting
Vermontbasedrenewablegeneration.
Global Warming & Future Power Supply: Fossil fuel electric generation contributes to climate
change.BEDhasbeenaleaderinrenewableenergydevelopment,butmoreneedstobedone.Thegoalisto
meet100%ofBurlingtonsneedswithrenewableresources bytheendof2012.Butinstaterenewablesare
challenging. For example, wind energy is Vermonts most promising type of renewable power (and is cost
effective relative to other sources), but implementation is moving slowly. In order to replace a longterm
contract that expired at the end of 2009, BED contracted for 16 megawatts of wind power. The Vermont
Wind project was delayed somewhat but construction has begun and power should begin flowing late in
2011. In the last twelve months BED has contracted for 100% of the power from the recently permitted
Georgia Mountain Community Wind Project and is considering the possibility of pursuing an ownership
interestintheProjectinsteadofjust contractingforthepower.BEDhasalsorequestedregulatoryapproval
topurchasehydropowerfromQuebec,butany suchpurchasewillneedapprovalfromBurlingtonvoters.
IntegratedResourcePlan / Renewability: BEDs analysis of supplyoptions found that renewable
resources were the best course of action (see www.burlingtonelectric.com). However, such resources
generallycomeatapremiumprice.Inordertomaintainstablerates,BEDcanselltherightstotherenewable
aspects of the output from the McNeil Plant and other renewable resources (Renewable Energy Credits or
RECs).WhenRECsaresoldhowever,BEDlosestherighttoclaimtheoutputfromrenewable resources.
AfteraccountingforthesaleofMcNeilRECs, 14%ofBEDsneedsweremetwithrenewableenergyin
2010. Priortothesaleofthe RECs, BEDreceivedabout 50%ofitspowerfromrenewableresources
(therenewabilitypercentages arelowerthaninprior yearsduetotheexpirationofahydrorelatedcontract
coupledwiththedelayinthestartofthewindcontractintendedtoreplaceit).
TheRECsweresold torecoverthecostofstateoftheartemissioncontroltechnologyinstalledin2008
withoutputtingpressureonrates. AsofMarch2010, thevalueoftheRECs soldfromMcNeilpaid forthe
$12,000,000 cost of the emission controls. BED has committed to sell RECs only through 2011 and will
reviewtheeconomicsofsellingRECstocontrolratesversusretainingtheabilitytoclaimrenewability.
The McNeil Station: In 2010, 38% of
BED's power came from McNeil. Despite
recent reductions in oil and natural gas
prices, operating hours should remain high
in 2011 due to volatility in the wholesale
markets for electricity the relatively low
cost of wood and the competitive
advantage conferred by the new emissions
controls.Ifnecessary,theMcNeilPlantcan
burn fuel oil or natural gas in addition to
wood, althoughthatisunlikely.Asthechart
atleft shows,however,wholesalepricesfor
natural gas and fuel oil have grown
dramatically over the years while wood
priceshaveremainedrelativelystable.
171%
276%
57%
0%
50%
100%
150%
200%
250%
300%
FuelOil NaturalGas Wood
ComparisonoffuelpricesattheMcNeilPlant
changeinthreeyearaverageprices1989 1991to2008 2010
8 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
GENERATION THEMcNEIL PLANT
The McNeil Station is dispatched by ISO
New England, which controls all of the
regionspowerplants.Thedecisiontorun
a plant is based on regional demand,
reliability needs, and the bid price, which
reflectsfuelcostsateachplant.
ISOdoesnotconsiderthetotal costof
producingpower because it excludesmost
"externalities" (environmental and
secondary economic impacts). However,
ten statesnowrequire fossilfueledunitsto
purchase carbon credits in order to
operate. This incorporates environmental
costs into the economics of these units.
Because McNeil uses a renewable fuel
(biomass, considered carbon neutral), it
providesacompetitiveadvantage.
All power plants that burn fuel emit
certain substances into the air. Until we
areabletoswitchcompletelytopollution
free technologies like wind, solar, and
hydro, we must continue to reduce
demandwheneverpossible.
HARVESTING BIOMASS
McNeils wood harvesting standards
are comprehensive, fieldproven means to
harvestbiomassfuelsustainably,andhave
beenusedasamodelindevelopingforest
management certification criteria. In
2010, McNeil Station purchased 377,000
tons of wood 91% harvest residue, 7%
sawmill residue and 2% clean recycled
wood. McNeilforesters planand monitor
harvestsonmorethan5,000acresperyear
withina100mileradiusofBurlington. Harvestplansincludeprotectingcriticalhabitatsandwetlands. For
example:
! McNeilmakesavailableportableskidderbridgesforfree(onloan)tologgers.
! McNeilforestersencouragetheuseoflowimpactharvestingequipmentonsensitivesites.
! McNeilmanagesitswoodfuelinventorytominimizedeliverydisruptionsduringinclementweather
andtoavoidenvironmentalimpactsofharvestingduringsensitivetimesoftheyear.
McNeilcontinues to operatethe BurlingtonWaste Wood Depot, which provideslocalresidentswith a
central location to dispose of clean waste wood at no charge. In 2009, 4,867 tons of waste wood were
divertedfromlocallandfillstoMcNeilandprocessedintofuel, whichconservednearly 21,000 cubic yards
ofcriticallandfillspaceandreducedMcNeilfuelcostsby$58,400.
162,236
158,232
87,072
13,507
0
50,000
100,000
150,000
200,000
Coal Oil Gas
(combined
cycle)
McNeil
T
o
n
s

o
f

p
o
l
l
u
t
a
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t
s
Estimatedtotalemissionsfrom
alternativesourcesofelectricity
(tonsofCO
2
,SO
2
,NOxandparticulates)
Assumes50MW
powerplants
0%
10%
20%
30%
40%
50%
60%
70%
80%
94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
McNeilPlantCapacityFactor
actualvs.potentialgeneration
9 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
OPERATINGEFFICIENCY
Approximately 6,000 of our 16,000
residential customers change locations each
year, which is a primary driver of customer
service costs. BED has managed to lower
and stabilize these costs over the last ten
years. Adjusted for inflation, the cost per
customer has declined 23% since 2000.
Among other things, this reflects
considerable savings from consolidating job
functionsandtheproductivityofourstaff.
The average cost of maintaining BED's
distribution systemis about $1.4 million per
year. In addition, BED makes longterm
investmentstoimprovethesystem, toextend
its useful life, and to accommodate new
development. Capital projects include
equipmentupgrades,lineextensionsandnew
undergroundconduitsandcables.
These investments improve system
reliability and reduce unplanned outages.
Distribution system efficiency measures
include conversion from 4.16 KV to 13.8
KV, load balancing, installation of capacitor
banks, etc. These changes have reducedline
lossesfrom4%in1996to2.1%in2010and
are saving about $578,000annually.
Note: The spike in capital expenditures
in 2001 resulted from three major projects
occurringatthesametime.
The administrative costs of running
BED have declined significantly since the
late1990s from staffreductions (downfrom
164 employees in 1996 to 125 today) and
greater efficiencies. Since then, BED has
continued to work hard to control costs.
However, since the customer base is stable,
anycostincreases(e.g.,healthcare,salaries,
insurance, etc.) result in higher costs per
customer. Nevertheless, adjusted for
inflation, the administrative cost per
customerhasdeclined24%since2000.
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
01 02 03 04 05 06 07 08 09 10
DistributionSystemExpenditures
Maintenance&CapitalInvestment
(inflationadjusted)
Maintenance Capitalprojects
$0
$20
$40
$60
$80
$100
$120
$140
00 01 02 03 04 05 06 07 08 09 10
CustomerService
costpercustomer
(inflationadjusted)
$0
$50
$100
$150
$200
$250
00 01 02 03 04 05 06 07 08 09 10
Administration
costpercustomer
(inflationadjusted)
10 BurlingtonElectricDepartment 2010PerformanceMeasuresReport
ECONOMICIMPACTS
TAXESANDFEES
As a municipal entity, BED is not
required to pay property taxes. However,
BED makes an annual payment in lieu of
taxes (PILOT) that makes us the largest
property taxpayer in the City. BED also
collectsa3.5%franchisefeefortheCity.
This is significant because these
paymentscomefromall customers(andthe
joint owners of the McNeil Station),
including nonprofit entities such as UVM
and Fletcher Allen that dont pay property taxes. This is a more equitable distribution of the burden of
financingCityoperationsandisanimportantbenefitofpublicpower.
If notforBEDsPILOT and thefranchisefee,thecombinedpropertyand schooltaxratewould
be almost $0.09 higher than it is today. Thatmeans a family with a$200,000 homesaves about $170
peryearinpropertytaxes,whilepayingonly$27 infranchisefees,asavingsof$143 peryear.
JOBSANDTHEMULTIPLIEREFFECT
OneofthebenefitsofthedecisiontobuildtheMcNeilGeneratingStationisthataconsiderableamount
ofmoneyremainsinVermontandtheregion.Inadditiontoproviding40 jobsfor VermontersatthePlant,
BEDswoodfuelpurchasesalsocontributetotheVermonteconomy,supportingNorthCountrylandowners,
processors, and haulers. It is especially noteworthy that much of this activity has occurred in the
northernmostcountiesofVermont,wheremosteconomicindicatorslagbehindtherestofthestate.
In addition, sustainable harvesting of wood fuel results in environmental benefits and a reliable long
termfuelsource.AsustainedmarketforlowgradewoodatMcNeilallowslandownerstoimprovethefuture
value of their woodlands. This encourages residents to own and maintain undeveloped forestland, which
providesmanypublicbenefitssuchascleanwater,wildlifehabitat, andlandforrecreation.
The economic impact of BEDs operations includes payroll, local taxes, wood purchases, and other
power purchased within Vermont. BEDs
total direct contribution to the Vermont
economyoverthe past 10 yearswas $298
million.
The indirect benefits are significant as
well. For example, wood purchases have a
powerful "multiplier effect" as the money
circulates through the economy. Including
transportation costs, BED and the Joint
Owners spent $14.03 million for wood at
the McNeil Plant last year. This led to
$12.4 million in additional economic
activity, including $6.1 million in wages
for167 jobs (oneyearonly). Furthermore,
weestimatethattheseactivitiesproduced
$759,000 in state and local tax revenues
(not including the $3.15 million in PILOT
andfranchisefees forBurlington).
BEDPaymentsinLieuofTaxes
andFranchiseFeeTransfers
FiscalYear
Paymentin
LieuofTaxes
(PILOT)
City
Franchise
Fees
Totals
2006 $1,204,542 $1,306,525 $2,511,067
2007 $1,329,161 $1,561,087 $2,890,248
2008 $1,422,118 $1,555,177 $2,977,295
2009 $1,545,262 $1,581,818 $3,127,080
2010 $1,513,864 $1,640,653 $3,154,517
5Yr.Totals $7,014,947 $7,645,260 $14,660,207
Payroll&
Benefits,$102,
241,359
McNeilWood
Purchases,$1
18,928,748
Purchased
Powerin
VT,$40,369,0
37
Taxes&
Fees,$36,755,
669
BEDandtheMcNeilPlant
DirecteconomicimpactsinVermont,2001 2010
SmartGridsGuidingPrinciples
Overthenextseveralyears,aswemovetowardasmartgrid,BEDwantstoassure
ourcustomersthattheirinterestsandprivacyconcernsareparamount.Weare
workingwiththestatewideeEnergyVermontCommunicationsGroupandtogetherwe
havedevelopedGuidingPrinciplesthatwebelievealignwithfundamentalconsumer
interestsandexpectations.ThePrinciplesare:
1. Expectationofprivacy.Consumerbillingandusagedatawillnotbesharedwith
anythirdpartywithouttheconsumersconsentexceptasrequiredbylaw.
2. Expectationofeffectivecommunication.Consumerswillreceiveaccurate,timely,
clearcommunicationthatenablesthemtounderstandnewservices,technologiesand
ratestructuresandallowsthemtomakeinformedenergychoicessuitedtotheirlife
styles.
3. Expectationofsecurity.Theutilitywillsecureallconsumerdataandcomplywith
industrystandardcybersecurityprotocolsandpractices.
4. Expectationofchoice.Consumerswillhavechoicesamongratestructures,in
home devices and appliances that enable them to take advantage of smart grid benefts.
5. Expectationofsafety.Smartgridwillbeimplementedusingtechnologiesandma
terials that meet industry standards and have been demonstrated by scientifc research
nottoposehealthriskstopeopleandcommunitieswheretheyareinstalled.
6. Expectation of consumer beneft. The smart grid will be implemented in a manner
designedtomaximizevaluetoVermontconsumers.
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