Burlington Electric Department And Mayor Propose Net Zero Energy Revenue Bond
September 3, 2021
by Paul Ciampoli
APPA News Director
September 3, 2021
Burlington, Vermont, Mayor Miro Weinberger and public power utility Burlington Electric Department (BED) have proposed a new, $20 million Net Zero Energy Revenue Bond that would accelerate progress toward Burlington’s climate goals, while reducing upward rate pressure for BED customers, BED reported on Sept. 2.
In addition, the mayor and BED announced that BED’s green stimulus program would continue and that Moody’s Investors Service affirmed BED’s A3 rating.
The Net Zero Energy Revenue Bond, combined with a portion of BED’s annual General Obligation (GO) Bond, would make numerous investments, including:
- $17.5 million to support projects that help advance progress toward the net zero energy goal;
- $7.8 million to fund grid upgrades that support reliability and manage new loads from strategic electrification;
- Renewable energy generation plant maintenance and upgrades;
- Investment in electric vehicle charging and demand response infrastructure; and
- Upgrades to technology systems to support new dynamic rates and load control
The Net Zero Energy Revenue Bond would reduce future rate pressure significantly for BED customers relative to a scenario where BED made these investments without the bond, BED noted.
Debt service on the revenue bond proposal and that portion of the GO bond used for strategic electrification would be supported by net revenue from strategic electrification projects between Fiscal Year 2023 and Fiscal Year 2025 that will contribute approximately 40 percent of BED’s obligation over the 20-year debt service life of the bonds and savings of $684,000 of BED’s debt service starting in Fiscal Year 2026, due to the maturity of existing bond debt.
Also, under a new Vermont Public Utility Commission (PUC) order approving a BED proposal, the utility will double funding at least through the end of Fiscal Year 2025 for strategic electrification, including continuing its green stimulus program.
The doubling of funding would be supported by approximately $5.3 million from BED’s annual GO Bond. This will reduce fossil fuel use through customer incentives for heat pumps, EVs, electric lawn care equipment, electric bikes, and more, as well as avoid over 47,000 tons emissions, equivalent to nearly 100,000 barrels of oil burned, compared to business as usual, BED said.
Meanwhile, Moody’s Investors Service affirmed BED’s A3 rating on outstanding revenue bonds on August 16, 2021, with a stable outlook. Moody’s cited BED’s 100 percent renewable power supply, the diverse local economy in Burlington, and recent action to adjust rates for the first time in 12 years as positive indicators.
Among the first of its kind nationwide, the Net Zero Energy Revenue Bond proposal was recommended by the Burlington Electric Commission by a 5-0 vote. The Burlington Board of Finance and City Council will consider the proposal for placement on the November ballot at their September 13 meetings.
In September 2019, Weinberger, joined by BED General Manager Darren Springer, City Director of Sustainability Jennifer Green, and other stakeholders, released the City’s Net Zero Energy Roadmap. More than a year in the making, the roadmap studies what it will take for Burlington to accomplish its goal to become a Net Zero Energy city by 2030, and identifies four key pathways to get there.
Springer discussed the roadmap in an episode of the American Public Power Association’s Public Power Now podcast.
Details On Green Stimulus Program
In the wake of the COVID-19 pandemic, Weinberger announced that a new green stimulus program would be launched using existing funds to support a range of expanded and new initiatives to help boost both the city’s economic recovery from the pandemic and its transition to becoming a Net Zero Energy city.
In response, BED worked quickly last year to implement the green stimulus, which launched on June 1, 2020 and offers incentives for technologies including heat pumps, heat pump water heaters, electric vehicles, and more.
The success in 2020 of the green stimulus led the mayor and BED to announce that the green stimulus program initiatives have been extended into 2021 and will remain available through year’s end or until funding is exhausted.