Vermont's Electric System

Vermont's Electric Utilities

Twenty-one electric distribution companies serve Vermonters, ranging in size from the Village of Readsboro Electric Department with about 400 customers, to Central Vermont Public Service (CVPS) with more than 144,000. Vermont's electric utilities are regulated monopolies that operate under a "certificate of public good" granted by the Vermont Public Service Board. As regulated monopolies, their rates and policies are subject to review by the Vermont Department of Public Service and approval by the Public Service Board.

Vermont has three types of electric utilities:

Investor-owned utilities (4)
Municipal electric departments (15)
Member-owned rural electric cooperatives (2)

Vermont is the only state in New England that, thus far, has chosen not to restructure its electric industry and adopt retail competition. Because Vermont utilities own few of their own generation resources and participate in the New England electric wholesale market, they share many characteristics with distribution companies in other New England states that have restructured.

Vermont's Power Supply, 2003

The following table shows how Vermont's instate electric demand was served in 2003. The Department of Public Service Biennial Report and the Vermont Electric Plan both contain a wealth of additional information about Vermont's electric supply.

Power Source	Percent of Total Demand	Gigawatt Hours Consumed
Vermont Yankee	35.5%	2,131
Hydro Quebec	28.2%	1,694
Other Purchase	20.4%	1,226
Instate Hydro	9.2%	554
McNeil Generator	4.9%	297
New York Power Authority	1.2%	73
Instate Thermal	.6%	34
TOTAL LOAD	100.0%	6,009

Vermont's Electric Industry -- Major Players and Forces

Vermont's Transmission Grid

Vermont's power grid is operated by the Vermont Electric Power Company (VELCO). VELCO was organized in 1956 to develop an integrated transmission system to interconnect the numerous electric utilities and provide them with access to power from the St. Lawrence River project. Currently its transmission system consists of 534 miles of transmission lines, 25 substations, and a 200-megawatt back-to-back High Voltage Direct Current Converter. VELCO is a regulated utility, owned and controlled in various percentages by 14 of the state's utilities, with CVPS and Green Mountain Power (GMP) owning 86.3 percent. VELCO operates Vermont's bulk transmission system and represents the utilities in power pool matters with the New England Independent System Operator. VELCO also performs and directs planning, design, and construction on the Vermont bulk power transmission system as part of the regional grid.

Efficiency Vermont

In 1999, the Vermont Public Service Board, based on recommendations of the Department of Public Service and a settlement with Vermont utilities, created the nation's first statewide efficiency utility (EEU). The EEU's purpose is to support targeted energy efficiency programs that reduce the electricity usage of businesses and individuals. The programs the EEU provides were formerly the responsibility of individual utilities. Following a competitive bid process, the contract to run the EEU was awarded to the Vermont Energy Investment Corporation in 2000, which operates the EEU under the name Efficiency Vermont. In 2002 an audit of Efficiency Vermont, required by Vermont law, verified the EEU annual energy and capacity savings estimates of the program and found the program to be highly cost effective.

Vermont Public Power Supply Authority (VPPSA)

To address the particular needs of Vermont's smaller publicly-owned utilities, the Vermont Public Power Supply (VPPSA) was created by Vermont law to pool resources and obtain economies of scale for operations, planning, financing, wholesale power transactions, and other aspects of the utility business. VPPSA also has authority to buy and sell wholesale power and to issue tax-free debt on behalf of municipal and cooperative utilities in Vermont.

Independent Power Generators and Qualifying Facilities

Vermont has a number of independently-owned wholesale generators who sell power, mostly from small hydro-electric dams and a large wood-fired facility at Ryegate. Currently independent power producers (IPPs) account for 6 to 8 percent of total generation and about seven percent of capacity. While IPPs have provided reliable power, they offer the service at relatively high prices, which have contributed to concerns about high electric rates.

ISO-NE, New England's Regional Transmission Organization

The New England Independent System Operator (ISO-NE) is designated by the Federal Energy Regulatory Commission as the Regional Transmission Organization that manages the New England region's bulk power generation and transmission system and the region's open access transmission tariff.