- Luke Eastman
Public Utility Commission staff are recommending approval of a 15-year contract for Vermont Gas Systems to buy “renewable” natural gas from the Seneca Meadows landfill in Waterloo, a town in the Finger Lakes region.
The Canadian-owned utility serving 56,000 customers in northwestern Vermont says the contract will help it reduce its carbon footprint by replacing more of the fossil-fuel natural gas it sells with methane generated from decomposing garbage. Methane is a powerful greenhouse gas, so capturing it before it escapes from landfills and burning it instead of fossil fuels such as natural gas is considered a crucial emission-reduction strategy.
But critics have lambasted the deal as an elaborate and confusing form of "greenwashing" unlikely to significantly reduce emissions and carrying substantial financial risk for ratepayers.
She's a retired naturopath and climate activist from Burlington who took the lead in challenging the contract. She submitted filings to the PUC and cross-examined Vermont gas officials who testified.
- Stuart Blood
- The gas route from Seneca Meadows to Vermont
Renewable energy credit systems are meant to support new forms of renewable energy, Masland wrote. “What [Vermont Gas] is proposing will do nothing at all to stimulate new renewable energy,” Masland wrote. Several other lawmakers signed the letter. It's rare for legislators to insert themselves into PUC deliberations.
Such skepticism is legitimate, but not significant enough to override the possible good from the contract, Daniel Burke, a hearing officer for the PUC, found. After a nearly four-month investigation, Burke filed a proposed decision on Wednesday recommending that the commission approve the contract. The full commission, which is expected to rule in early November, rarely deviates from proposed decisions.
Critics made good points, Burke found, but it would be “premature to foreclose [Vermont Gas'] participation in a nascent marketplace that has the potential for satisfying Vermont’s broader energy policy.”
The contract is with a company called Archaea Energy, which was recently purchased by British energy giant BP. It would initially provide Vermont Gas with enough gas to meet about 4 percent of its current peak demand, rising to 13 percent by 2030.
It’s not clear how much the deal might increase rates. Adding all of the landfill gas to Vermont's supply might increase rates by 3.6 percent, but the company is not required to use all the gas itself. It can decide annually how much of the gas it wants to use or resell as truck fuel.
That would provide the utility with “flexibility to meaningfully confront how its core business practices contribute to greenhouse gas emissions,” Burke wrote.
If the contract were well managed and overseen by regulators, it could provide a cost-effective way to help Vermont Gas achieve its climate goals, Burke found.
The case has been closely watched and is unusual for several reasons.
It is the largest such contract the PUC has ever considered. Gas supply deals don’t require the approval of the regulators unless they are for five years or more than 10 percent of the company’s peak demand.
The Seneca Meadows contract is for 14.5 years with an optional 5-year extension. Vermont Gas officials have said the contract represents a key part of their long-term strategy to reduce emissions.
Vermont Gas officials repeatedly stressed that the contract was just one part of its overall emissions-reduction strategy. Others include aggressive weatherization of buildings; installation of electric heating equipment, such as cold-climate heat pumps; and exploration of other heating sources, such as geothermal and “green hydrogen” projects.
These efforts will reduce demand for the company’s core product, but company officials insist they need to add renewable gas to the mix from sources in and outside Vermont.
One high-profile in-state source is a large digester at the Goodrich farm in Salisbury that generates methane from cow waste and food scraps.
- Courtesy Of Vanguard Renewables
- Danielle Goodrich Gingras (left) leading a ceremonial turning of the spigot to start the flow of gas at her family farm's renewable energy facility
“Vermont is a small state,” he testified in September, “and we have a lot of challenges meeting our energy goals if we just look within our boundaries.”
Company officials had no comment on the propose ruling.
Annette Smith, executive director of Vermonters for a Clean Environment, said what concerns her most about the deal is the trading of the renewable energy “attributes.”
The company is angling for ways to make money two ways. One is to sell the attributes to other industries, like the transportation markets, if that’s most profitable.
The other is to earn credits under a future Clean Heat Standard if the company can show purchasing the gas lowers the carbon intensity of its current supply. The landfill gas is likely to have 26 to 43 percent lower emissions than fossil fuel gas.
“This is where the big bucks are to be made, which is why VGS is frothing at the mouth to get this contract,” Smith said.