BED’s mistake cost other utilities about $860,000
By Guy Page
The Vermont Public Utility Commission on July 31 issued a stark warning to the Burlington Electric Department citing a “concerning pattern of regulatory errors, inconsistencies, and shortfalls”. The state’s utility oversight board says stronger oversight by the state’s largest municipal utility is necessary to ensure improved performance from the utility, particularly concerning its energy efficiency programs.
Public Service Commissioner Kerrick Johnson has since contacted BED with a letter expressing the PUC’s concerns.
The Commission’s letter observed repeated issues across various cases, impacting both BED’s role as an energy efficiency utility and a distribution utility. Key examples highlighted include:
• Ratepayer Impact: BED’s initial proposals for energy efficiency charge rates have been based on budgets larger than approved by the Commission, raising concerns about potential overpayments by ratepayers. Additionally, an error in net-metering tariffs led to 206 customers being under-compensated by $26,275.
• Financial Losses & Fund Issues: BED lost approximately $951,000 due to its failure to report output and fuel type for the McNeil Generating Station’s renewable energy credits. The same reporting error cost Green Mountain Power $600,000 and a consortium of other, smaller municipal utilities $260,000, the PUC said.
Compounded errors in calculations have also resulted in a significant negative balance in BED’s energy efficiency utility fund, prompting a Commission investigation. BED also acknowledged overspending its residential-sector resource-acquisition budget by 33% due to invoicing errors.
• District Energy System (DES) Spending: The Commission is investigating BED’s expenditure of roughly $2 million of ratepayer funds on the development of a district energy system (DES) without proper regulatory approval. The DES would use excess steam generated by McNeil to heat public buildings, including some at UVM and the UVM Medical Center.
BED also made errors in its 2024 rate case by unintentionally including DES expenses and failing to disclose this information, which led to the Commission making decisions based on erroneous data.
• Regulatory Compliance: Regulators have criticized BED for a history of inconsistent regulatory engagement, including “late, internally inconsistent, missing information, or other mistakes” in filings. The Commission previously found BED’s approach to proposals “unacceptable” when they were inconsistent with Commission orders and expected “marked improvement in BED’s regulatory diligence”.
The Commission believes these issues point to a lack of adequate quality-control measures or an identified root cause within BED. Rather than addressing each issue individually, the Commission is now seeking a “more holistic approach” to oversight and has requested recommendations from the Department of Public Service on how to facilitate effective regulatory engagement.
In published reports, BED General Manager Darren Springer promised to work with the state to improve on the areas addressed by Johnson and the PUC.