Grid Block: Vermont’s Aging Transmission Network Can’t Keep Pace With Green Power Projects 

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• Rob Donnelly

John Ovitt has a sticky problem. The Franklin Foods cream cheese plant he runs in Enosburg Falls makes more wastewater than the tiny village treatment plant can handle.

Eric Fitch has an innovative solution. The founder and CEO of New Hampshire-based renewable power company PurposeEnergy could transform that foul cheese water into a valued commodity: renewable electricity.

Their partnership seemed like a perfect match until the state's energy regulators recently raised an inconvenient truth: The power grid in the northern third of Vermont already has more renewable energy than it can handle.

Big wind and solar projects developed in recent years in rural parts of the region generate far more power than businesses and residents there consume. The surplus electricity is exported to more densely populated parts of the state over older transmission lines that, on sunny or windy days, can be pushed to their limit.

When that happens, regional grid managers must step in and tell power generators — usually the owners of the two large wind farms in Lowell and Sheffield — to cut back on their electricity production to keep the lines from overheating.

That costs a lot of money: $13 million in lost energy sales over the last several years, according to an estimate by Green Mountain Power, the state's dominant utility and owner of the Lowell wind farm. When utilities lose revenue, customers bear the cost by paying more for power.

So when Franklin Foods recently sought permission to fire up a modest new waste-to-energy plant in the heart of this overloaded zone, state energy officials winced.

In theory, such a project should be well received for its multiple economic and environmental benefits. It would diversify the state's portfolio of renewable energy beyond wind, solar and hydro. It would eliminate a waste stream that contributes to lake pollution. And it would help a major employer in an economically depressed area lower its costs, stay competitive and, potentially, expand.

It's just in the wrong place.

"Having excess renewable generation in an area means that maybe we shouldn't be prioritizing new renewable generation in that area," Ed McNamara, director of utility planning for the state Department of Public Service, told Seven Days.

These grid-related problems and their costs have led both McNamara's department and a local utility to oppose the Franklin Foods project. The maxed-out grid has already cost Vermont the loss of renewable energy projects. While some were of modest size, at least one, a 40- to 60-megawatt wind farm proposed near Island Pond, was industrial scale. Developers of Seneca Mountain Wind canceled their plans in 2012, in part because of the grid limitations.

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• Kevin Mccallum ©️ Seven Days
• Lineman Cody Crowe upgrading a Green Mountain Power line in Eden

Renewable energy advocates describe reluctance to add new sources as shortsighted at a time when Vermont's ambitious climate goals require a sweeping transformation of the state's energy sector. They say the persistent grid limitations underscore just how far the Green Mountain State remains from embracing a clean energy future. Vermont need look no further than the recent widespread, extended power outages in Texas to see the peril of delaying modernization of the electrical grid, said Chad Farrell, founder and CEO of Burlington-based solar developer Encore Renewable Energy.

Unlike Texas, Vermont has not deregulated its electric utilities. But no single entity is responsible for the management and operation of transmission lines and associated infrastructure that make up the state's electrical grid. Rather, a complex web of public and private entities import, generate and distribute electricity to homes and businesses in a marketplace tightly controlled by federal, regional and state regulators.

State and utility energy planners acknowledge that the grid would need significant investment to accommodate additional renewable sources. A recent report by Vermont Electric Power Company, better known as VELCO, the manager of the state's 738 miles of high-voltage transmission lines, estimates that tripling the amount of solar power statewide would require more than $500 million in transmission system upgrades alone.

But VELCO's mission is to build and maintain transmission capacity needed to reliably serve existing power demands, said Frank Ettori, its director of power accounting. VELCO's role is not to overbuild the grid to handle prospective future generation projects by for-profit energy developers.

"Unfortunately, in order to solve this problem, it takes a lot of money, and it comes down to who pays," Ettori said. It's up to renewable energy developers who want to tie in to the grid to fund any needed upgrades, he said.

McNamara, the utility planning official, is among those who contend that upgrading transmission lines solely to accommodate new projects is not the best way to achieve the state's renewable energy and carbon-reduction goals. It's just as important to keep electricity costs low so that consumers have an incentive to switch to cleaner electric heating and electric vehicles, McNamara said.

Green power developers counter that such policies impede their projects even as the climate crisis demands more of them. Allowing large swaths of Vermont to become no-go zones for significant new projects is unfair to the people and business owners there who want to be part of the clean energy future, Farrell said.

"The grid has been woefully underinvested in for years," Farrell said. "Grandpa's grid has got to go."

Waste Not

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• Kevin McCallum ©️ Seven Days
• Jeff Jewett preparing to haul excess cheese wastewater to a local dairy farm

On a frigid February morning, in an industrial park on the banks of the Missisquoi River, Jeff Jewett climbed atop his tanker truck, opened the hatch and peered into the darkness. Inside sloshed 4,500 gallons of milky white wastewater that had just been pumped into his truck from a reservoir in the bowels of the Franklin Foods plant.

The protein-rich slurry was a mixture of whey from the cheesemaking process and wastewater created when workers hosed down equipment between batches. The plant produces more than a dozen brands of cream cheese. Its biggest seller, Hahn's, is prized by bakers as a key ingredient in New York-style cheesecake.

Founded in 1899, the cheese plant is an economic driver in its corner of the state, purchasing tens of millions of gallons of milk and cream annually from more than a dozen dairies in northwestern Vermont. Owned by German food conglomerate Hochland SE, Franklin Foods, which also runs a cream cheese plant in Arizona, is the third-largest cream cheese producer in the United States. The Enosburg Falls plant produces about 45 million pounds of cheese annually and employs 80 full-time workers.

Making all that cheese, however, generates millions of gallons of waste, more than the modest Enosburg Falls village treatment plant can handle. So Franklin Foods pays Jewett to haul it away daily.

After closing the tank hatch, Jewett climbed down, hopped up into the cab and drove off, heading east out of town. Passing the Hannaford supermarket, Jewett soon crossed the Missisquoi Valley Rail Trail and arrived at the Choquette Dairy farm.

He backed up to one of the barns, hooked one end of a thick hose to a tanker valve and threaded the other beneath a row of cows mooing for breakfast.

Jewett pulled a lever, and milky swill inundated the cement floor and mixed with the manure and urine from dozens of cows. The whole fetid mess streamed into a nearby manure pit.

Dumping wastewater this way at local dairies is a convenient — though not inexpensive — way for Franklin Foods to manage what is often referred to as "high-strength" waste. Unlike wastewater from homes, the material has such a high organic content that it is too costly for many municipal wastewater treatment plants to handle — and impossible for smaller ones like Enosburg Falls'.

The cheese plant has its own pretreatment system to filter some of the wastewater, but it takes vigilance to ensure that the permitted volume and concentration levels are maintained. That can become especially difficult during the fall when holiday orders soar and the plant takes in a million pounds of milk a week, Ovitt, the plant manager, said.

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• Courtesy
• Franklin Foods in Enosburg Falls

Diverting the cheesy slop into an on-site digester would solve several problems, Ovitt said. It would reduce Franklin Foods' trucking costs. It would ensure the company didn't violate its existing wastewater permit. And it would position the plant for additional investment from its German owners, for whom sustainability is a core value, Ovitt said.

"We want to compete," Ovitt said. "We want to be the plant that is able to expand, but to do that we need not only the capacity but also the ability to handle the [waste] on the other end."

That's where Fitch comes in. The Massachusetts Institute of Technology-trained engineer started PurposeEnergy, which converts organic waste into renewable biogas.

The cheesemaker's waste could be captured in an oxygen-free vessel, called a reactor, where bacteria break down organic matter and create methane. Such biodigesters have been turning manure into "cow power" on Vermont farms for decades, but they produce only a tiny sliver of the total electricity supply.

Fitch was one of the first to take the technology beyond dairies when, in 2010, he helped Magic Hat Brewing in South Burlington build the nation's first brewery waste-to-electricity plant. In the fall of 2020, the Vanguard Renewables started work on a project at a large dairy farm in Salisbury to combine manure and food waste diverted from landfills to generate biogas to heat buildings at Middlebury College.

Fitch's plan was to convert the methane from Franklin Foods' wastewater into 710 kilowatts of electricity, enough to power roughly 800 homes. He was awarded a 20-year power contract through the state's Standard Offer Program, which encourages the development of renewable energy sources. Utilities are required to buy that power at fixed rates.

When he applied to the Public Utility Commission for a project permit late last year, however, both Vermont Electric Coop, the utility that serves the area around Enosburg Falls, and the Department of Public Service, which advocates for ratepayers, raised concerns. McNamara said his Department of Public Service flagged the project for the same reason it has others that were proposed in the area in recent years — the grid.

Power Squeeze

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• Kevin McCallum ©️ Seven Days
• Roger Jacobs showing Franklin Foods wastewater in the pretreatment system

This congested corner of the grid is known as the Sheffield-Highgate Export Interface, or SHEI for short. It stretches across parts of six northern counties — Grand Isle, Franklin, Lamoille, Orleans, Caledonia and Essex —  where the electricity supply far outstrips the demand.

Transmission lines in the region were never built to serve anything beyond the limited needs of the largely rural area, according to VELCO's Ettori. VELCO, collectively owned by the state and 17 private and public utilities, has been chipping away at the region's limitations for years, but comprehensive solutions remain elusive.

In 2004, for instance, VELCO built a new transmission line from Irasburg to Newport linking two separate dead-end lines into a loop, which improved system reliability in the region. But the project, a $24 million investment for VELCO, did not significantly expand the capacity of the grid to export power, Ettori said.

While the grid in northern Vermont is up to date in some places, in others it remains wanting. One of the transmission lines near Highgate is probably the smallest-capacity line in New England, Ettori acknowledged.

The SHEI region uses an average of 35 megawatts of electricity, but its transmission lines must carry more than 10 times that from green-power sources near and far: 225 megawatts imported from Hydro-Québec; 63 megawatts produced by Kingdom Community Wind's turbines in Lowell; 40 megawatts from Sheffield Wind Farm; 35 megawatts from hydro plants in Sheldon Springs and Highgate Falls; and 8 megawatts from the Coventry landfill, where gas is collected and turned into electricity.

The imbalance in the region is particularly acute in the spring and fall, when rivers are running high and the wind is blowing, but demand is low.

Northern Vermont is not the only place in New England where renewable energy has outstripped the capacity of rural wires. The grid in northern Maine has struggled to reliably export wind projects' power to where it is needed.

The nonprofit ISO New England, which runs the grid in the Northeast, works to keep the system in northern Vermont stable in several ways, one of which is to limit how much large producers, particularly the two wind projects, can generate.

For example, Kingdom Wind's 21 turbines can produce enough power for about 24,000 homes when the wind is strong enough. But grid managers occasionally issue "Do Not Exceed" orders to throttle down production at the farm, said Josh Castonguay, GMP's vice president and chief innovation officer.

These mandated power reductions take place about 9 percent of the time, according to the Department of Public Service. Building more renewable power projects in the area risks further stressing the grid and forcing generators to scale back production more often. A 2019 state report warned that allowing such projects could "impose uneconomic and unreasonable costs on ratepayers," in part because of the risk that new, higher-priced power would displace cheaper power already available.

The Public Utility Commission has in recent years denied new solar projects in the region for this reason. McNamara argues that it makes sense to steer solar developers to parts of the state where the grid can handle the load.

But that's not an option for Franklin Foods.

"We didn't choose this place arbitrarily because of the cheap land costs," Fitch said. "We chose it because there's a whole bunch of organic waste that originates there, and if we treat it on-site, we can make the world a better place."

Regulators supported Fitch's pioneering Magic Hat project, but much has changed since. A similar project he's proposing in St. Albans to convert waste from Ben & Jerry's and food scraps from Casella Waste Systems is also receiving far more scrutiny than expected, he said.

For an otherwise beneficial project to get tripped up by grid constraints is frustrating, McNamara said.

"When I first saw this [Franklin Foods proposal], I thought, What other job could I possibly do? Can I maybe make a living as a carpenter?" McNamara quipped. "This stuff just hurts my head."

The Public Utility Commission is considering a compromise with solar developers who still want to build in the area. It would charge them a "grid adjustor" fee meant to offset the economic harm to the ratepayers from new renewable solar projects.

But that won't help Franklin Foods, whose project remains in limbo. The commission has yet to rule on Fitch's request for a certificate of public good.

The company has options that don't involve generating electricity. Franklin Foods could, in theory, burn its waste-generated gas to heat its buildings, McNamara noted. Vermont Gas officials have inquired about purchasing the gas, too, but the economics don't seem to pencil out, Fitch said.

No new transmission improvement projects are coming to the rescue. VELCO has maintenance work in the pipeline, but it isn't planning any beefier lines in the near future. VELCO's member utilities recently nixed a plan for a $40 million line upgrade in the northwest corner of the state, contending that it was too expensive, Ettori said.

That doesn't mean utilities are powerless to fix the problem. Vermont Electric Coop is exploring installing more battery storage along its network in the region. And GMP has made a number of upgrades aimed at increasing the export capacity in the area, Castonguay said.

When GMP built Kingdom Wind in 2012, regulators knew it had the potential to destabilize the grid. GMP was required, over its objections, to add equipment to counterbalance those effects.

This included constructing an expensive device in Jay called a synchronous condenser, which helps maintain a stable voltage on the grid during isolated outages. More recently, GMP installed similar equipment at the Sheldon Springs hydroelectric dam; such upgrades are also planned for the Sheffield Wind Farm. These stabilization measures matter because they increase the capacity at which ISO New England is willing to operate the grid and, therefore, limit the need to scale back production, Castonguay explained.

GMP is also upgrading an 18-mile section of its own lines from Lowell to Johnson. A crew was working near Eden last week to install new, thicker-gauge aluminum wires that will double the line's ability to export power, Castonguay said.

"It's like another relief valve, another path for electricity to come out of the SHEI area," he said.

Renewable energy advocates are unimpressed. Farrell, the solar developer based in Burlington, calls the upgrades Band-Aids on a system that needs major investment, including grid-scale battery storage. Farrell's company is working with London-based Highview Power to develop a 50-megawatt, long-duration battery that would dwarf anything in the region. The project would store electricity by super-freezing air until it liquefies, and then generate electricity when needed by allowing the liquid to warm and expand to power a generator.

No site has been selected for the project, but Farrell said it's exactly what the northern reaches of the state need to ensure that existing renewables are captured and new sources can be added. Focusing primarily on the expense to ratepayers of improving the grid ignores other costs of declaring an entire region effectively off-limits to new clean energy generation, Farrell said.

"What do you say to the business owner, the homeowner, the school, the hospital up in the Northeast Kingdom when they want to participate in the clean energy economy, when they want to access all of the financial, economic and social benefits of participating in a distributed energy project, and are not able to?" he asked.

Who is conducting?

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• Kevin McCallum ©️ Seven Days
• Wastewater from Franklin Foods that could be turned into electricity instead being flushed into area manure pits

The need for a statewide approach gets more pressing as Vermont increasingly looks to meet its climate goals by steering people away from fueling their cars and heating their homes with fossil fuels and toward electric alternatives, said Jim Merriam, CEO of Norwich Solar Technologies.

"If we are to address climate change quickly and efficiently, we cannot approach grid modernization by project fees in lieu of a comprehensive plan and funding strategy," Merriam said.

Lawmakers know any hope of hitting the state's climate goals hinges on a rapid shift to "beneficial electrification" of cars and heating sources. Sen. Chris Pearson (P/D-Chittenden) pushed hard last year to expand from 10 to 20 percent the amount of power that utilities would be required to buy from small, locally based renewable sources. Utilities balked at infrastructure costs they estimated at up to $900 million, and the bill failed.

"There was basically a resistance from the utilities because they'd rather have their own generation projects as opposed to democratizing that a little bit," Pearson said.

Despite some progress, there remains "enormous potential for improvement" in how the grid is designed and managed, Pearson said. This includes more battery storage to soak up intermittent sources, such as solar and wind, and microgrids that make the system more resilient in the face of severe weather.

He acknowledges, however, that the complexities of energy policy and grid management make them challenging for a part-time citizen legislature to oversee effectively.

The Public Utility Commission is the three-member, quasi-judicial body most directly responsible for ensuring that the grid serves residents as intended. The commission's policy director, Tom Knauer, noted that the Vermont Supreme Court has upheld a 2019 commission decision denying a permit to a Derby solar project due to "undue adverse impacts" on ratepayers directly related to the grid's limitations. He declined to discuss the issue further, citing multiple cases pending before the commission.

Powering Down

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• Kevin McCallum ©️ Seven Days
• New, thicker aluminum high-voltage transmission lines that will double capacity to export power

Over time, congestion on the grid is expected to spread south, following green electric projects. That has huge implications for the state's climate goals, said Nils Behn, CEO of the Waitsfield-based Aegis Renewable Energy.

"When you eliminate large swaths of Vermont from participating in renewable energy solutions to climate change, you are hobbling the state from being able to truly and meaningfully offset its carbon emissions," Behn said.

He and other energy developers argue that the state needs to do a better job of encouraging more in-state renewable energy production. Reforming the way utilities are able to trade in renewable energy credits would be a good place to start, Behn said.

Such credits, known as RECs, are what qualify a utility to characterize its energy as green or renewable. By allowing Vermont utilities to meet their renewable energy goals on paper by purchasing inexpensive credits from Hydro-Québec, the state removes an important incentive to develop more local green energy sources, he said.

"It's not fixing anything that wasn't already fixed 40 years ago," Behn said.

Castonguay disagrees. Those credits play a role while utilities continue to upgrade the grid and expand the number and kind of renewable energy sources distributed around the state.

"We need to continue to build new renewables. Period. We need to continue to build them in Vermont and in the region," he said. But insisting on concentrating them all where land is cheap doesn't make economic sense because of the expense involved in the construction of new transmission lines, he said.

There are smarter, more cost-effective ways to keep the grid in balance while shifting it toward more renewable sources, Castonguay said. This change involves pairing intermittent power sources with batteries, such as GMP's Tesla Powerwall program, and shifting the demand for power. Some electric vehicles, for instance, automatically charge at night, when power is cheapest.

After decades focused primarily on ensuring that the state's electric grid was reliable and affordable, the Public Utility Commission has in recent years paid more attention to facilitating the shift to cleaner energy.

"The problem is that the clean energy future has lots of variations and flavors," McNamara said.

When the costs of all those options are laid before lawmakers in his department's upcoming revision to the state's annual Comprehensive Energy Plan, the choices will be stark. "We're going to really irritate a lot of people over the next year," McNamara said.

Fitch said he understands a small waste-to-energy project like the one at Franklin Foods needs to take into account cost to ratepayers, including whether it would force existing renewable projects in the area to reduce generation more often.

He's open to paying a reasonable grid-impact fee as long as it doesn't make the $10 million cheese-waste digester uneconomical.

"I think we could make that work," he said.

Ovitt, the cheese plant manager, said he understands the state's resistance to forcing ratepayers to pay more for power. He would hate to see the government do something that increased the price of milk and cream for his business, he said. At the same time, if it costs people more to do the right thing for the climate, he said, so be it.

"The State of Vermont can't have it both ways," Ovitt said. "There is a price to be paid for green energy."