Co-op seeking fresh alternatives for power generation

by Joseph Gresser

JEFFERSONVILLE — There were more smiling faces than usual at the 2007 Vermont Electric Co-operative (VEC) annual meeting.  Co-op finances were reported to be improving and there is even the possibility that sewer sludge could provide cheap energy in the future.

Last year’s meeting was a review of bad news:  widespread power outages caused by the snowstorm of October 2005, and rate increases.

On Saturday, May 12, the news was much more upbeat.  VEC Treasurer Bertrand LeGue announced that Standard and Poors, a major credit rating agency, recently lifted its rating of “credit watch with negative implications,” allowing the VEC to borrow at better rates.  He said the co-op took in nearly $4-million more than it spent last year.

VEC boosted its rates twice in 2006.  At this year’s annual meeting there was no suggestion that the co-op might need to raise more revenue. 

Both Mr. LeGue and David Hallquist, VEC’s chief executive officer, did say that rates would be adjusted to equalize the rates that old co-op members and former Citizens Utilities customers now pay.  No details of who would be affected by the rate restructuring were provided at the meeting, but Mr. LeGue and Mr. Hallquist said the changes would not raise or lower total revenues for VEC.

Mr. Hallquist said the co-op is moving forward on projects that should lower costs and raise reliability. These include doubling the budget for tree trimming in the co-op’s right-of-way and the start of a vegetation management program.

This, Mr. Hallquist said, could include spraying of herbicides, but, he added, “no will always remain no.”

The co-op, he said, already has automatic meter reading equipment in place over parts of its network.  Mr. Hallquist said VEC will continue to place the self-reading meters until its whole system is covered.

The meters can report electricity use at 15-minute intervals, he said, and allow the co-op to set time-of-day rates that could help drive down usage during peak periods of power consumption.

The new metering system will also let the co-op know of an outage even before the customer reports it.  It will also help repair crews pinpoint the location of a break in the power line.

Last year the co-op lost power contracts that made up approximately 30 percent of its needs. Now, Mr. Hallquist said, VEC has contracts that will keep the co-op powered through 2010.

He noted that the Hydro Quebec contract will expire in the next few years.  Hydro Quebec, he said, is likely to sign new contracts, but at much higher rates.

With that in mind Mr. Hallquist outlined some initiatives now being pursued by the cooperative.  These include such projects as the cogeneration plant at the Ethan Allen plant in Beecher Falls, which is scheduled to begin operation in June.

Other low-cost power options, he said, include an agreement to buy power from UPC Wind’s Sheffield wind turbines, if the project is actually built, and power from farm-based methane digesters.

The co-op is also involved in a three-way partnership to develop small generators based on gasifying sewage sludge and construction wastes.

The project, known as Renewable Energy Development of North America (REDONA), is based in the old Union Butterfield facility that sits across the border separating Derby Line from Stanstead, Quebec.  The partners are the co-op, Sealander Waterworks, a company based in Washington D.C., and ENERKEM of Montreal.

According to Mr. Hallquist, the goal of the project is to design and build an economical one-megawatt gasifier-generator-heat recovery unit.

The unit, unlike most power plants, would be sold as a complete ready-to-run package.  That, he said, would lower design and permitting costs for the user.

Mr. Hallquist said that development costs for the project will not come out of the pockets of ratepayers. Instead, he said, the co-op is seeking grant funding for the project.

The gasifier is the brain child of Esteban Chornet, a professor at the University of Sherbrooke in Quebec and the founder of ENERKEM.

Mr. Chornet was at the meeting and gave a half-hour-long presentation.  Gasification technology is not new, he said.  He recalled seeing it in use when he was a boy in Mallorca, Spain.

With the coming of cheap oil, Mr. Chornet said, the technology went into temporary eclipse.

Gasification transforms such carbon sources as wood, straw, municipal solid waste and sewage into gas by heating them at high temperature in an oxygen-starved chamber.

The resultant methane is cleaned and used to run an electricity-producing engine.  Mr. Chornet said his process is carbon-neutral and emissions-free.

The design is the basis of a ten-megawatt plant that is to be built in East London in the United Kingdom.

Mr. Chornet said the challenge for the one-megawatt units is to make them competitive with other sources of base-load power.  He said his target was to make electricity at a cost of no more than five cents a kilowatt hour.

He said when such a plant is located near a facility that can use the waste heat and steam for heating, it could operate at 80 percent efficiency.

Mr. Hallquist said the VEC network can accommodate up to 15 of the one-megawatt units.  By distributing them around the system, he said, the co-op can avoid the power losses that occur when electricity is transmitted over long distances. 

During the question period one co-op member asked Mr. Hallquist if the VEC stands to earn a lot of money from these units.

“We have an agreement,” he replied.  “If the project is successful all three parties will benefit.  But remember, we were going to make lots of money on nuclear plants.  This could drive rates down, but I don’t want to set any false expectations.”