The Burlington Electric Department is entering negotiations to buy out the co-owners of the 40-year-old wood-fired McNeil Generating Station, which would make the city its sole owner, officials announced on Tuesday.
BED owns 50 percent of the plant, while Green Mountain Power, the state’s largest utility, owns 31 percent. The balance, 19 percent, is owned by the Vermont Public Power Supply Authority, which supports the state’s municipal and cooperative electric utilities.
BED General Manager Darren Springer said on Tuesday that buying out the McNeil partners would “give us control of our destiny” and allow the city to pursue an array of innovations at the site without the need to consult partners. “This is an exciting, tangible and creative way to try to reach some of the goals that we have from an environmental standpoint,” Springer said.
The parties will enter a six-month negotiation to see if they can reach an agreement to transfer the minority ownership stakes, which would be subject to regulatory approval.
The development comes as something of a surprise given Mayor Emma Mulvaney-Stanak’s pledge during last year’s campaign to “develop a responsible transition plan to close the McNeil plant.”
Mulvaney-Stanak said she still supports ending the burning of wood chips for electricity at McNeil — eventually. She has realized the site holds promise for innovative renewable energy projects that could be difficult to pull off with partners involved, she said.
“It takes two additional steps with two additional owners right now,” she said.
Springer said he wanted to make it “crystal clear” that the move is not a step toward plant closure. BED is considering other energy initiatives on the Intervale property, including adding battery storage and a wood chip dryer.
The city council last year required BED to explore whether using waste heat from the plant to dry the green wood chips before they are burned, much like seasoning firewood, would improve the plant’s efficiency.
Springer also noted that the council has called for the department to explore ways to reduce emissions from the plant by 25 percent in five years and 50 percent in 10 years, which will be challenging.
McNeil has come under significant criticism from environmental advocates for being the single largest source of carbon pollution in the state and its costly method of generating electricity. The plant burns hundreds of tons of wood chips each year, mostly from waste wood on logging jobs.
The plant has also operated at a loss for seven of the past nine years and was on track to lose about $8 million last year, according to the joint owners’ annual financial reports.
Springer took issue with those figures and claimed that when a host of other benefits and avoided costs are considered, the plant has made the department a total of between $7.4 million and $14.8 million from 2014 through 2023. He said he could not speak for the finances of GMP or VPPSA, or whether losses motivated them to consider selling their shares.
It’s unclear whether the ownership change would affect BED’s long-sought goal of using the waste heat from the plant to generate steam for heating buildings, most recently at the University of Vermont Medical Center. If the city moves forward with such a project, there are a number of approaches that don’t necessarily rely solely on McNeil’s waste heat, Springer said.
“We’re not locked into a specific way to do it,” he said.
One of McNeil’s sharpest critics, environmental lawyer Nick Persampieri, said it struck him as odd the city would want full ownership of such a money-losing enterprise.
“I’m concerned that they’re taking on more risk,” Persampieri said. “Because of the lack of profitability, now they’re going to bear 100 percent of the losses instead of 50 percent.”
Clarification, October 16, 2024: The original version of this story was updated to better reflect Springer’s comments about the finances of McNeil’s partners.
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This article appears in Oct 9-15, 2024.
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