Semiconductor maker GlobalFoundries said on Monday that it plans to press on with plans to create its own electric utility, despite a ruling from regulators that the company would not be exempt from state renewable energy rules.
“To us, this is a key step forward,” said Ken McAvey, general manager of the massive Essex Junction factory known as "Fab 9." "We’re committed to following the renewable energy standards, and have already committed to set the bar even higher."
The Malta, N.Y.-based chip maker wants to better control its energy costs by running its 725-acre campus as a "self-managed utility" instead of buying its electricity from Green Mountain Power.
That effort seemed to suffer a setback last week when the Public Utility Commission ruled it didn’t have the authority to waive regulations that require utilities to sell increasingly cleaner, more renewable electricity to consumers. GlobalFoundries initially indicated it was "disappointed with the decision" and would figure out next steps.
On Monday, McAvey noted that the PUC also ruled that it does have the authority to let GlobalFoundries become its own power provider and purchase electricity on the wholesale power market. The company will inform the PUC soon of its decision to proceed with its application, McAvey said.
The company isn’t worried about meeting state renewable energy standards because it already has clean energy goals more aggressive than those required by the state, McAvey said.
If allowed to become its own utility, GlobalFoundries would do so using 100 percent carbon-neutral power. While McAvey didn’t name a supplier, it is expected the company — which uses 8 percent of the electricity in Vermont — would strike a deal with the massive Canadian power company HydroQuebec.
GlobalFoundries didn't ask for an exemption from Vermont's renewable energy standard because it wanted to buy dirty power, McAvey said, but rather because the rules seemed intended for utilities that sell power to retail customers.
“We don’t intend to be a power company,” McAvey said. “We’re not going to sell power. We’re in the semiconductor business. That’s what we’re passionate about.”
The company pays about twice as much for electricity in Vermont as it does at its factories in New York, which has a long history of power rates favorable to manufacturers.
Company officials have argued that in order to remain competitive and attract future investment in the former IBM facility in Vermont, they needed to rein in costs by closely controlling their power supply.
But the request to be exempted from renewable energy rules riled environmental groups and lawmakers who saw a wealthy corporation looking for a loophole.
Republican lawmakers responded to the PUC ruling last week by calling for lawmakers to pass a renewable energy exemption for the company, noting the important economic impact of the state's largest private employer.