Interview with Logan Brown of Vermont Energy Investment Corporation
(VEIC)
Logan is the Director of Targeted Implementation
His job entails managing project strategy and business
objectives during the planning phase of potential contracts.
I headed down to the VEIC headquarters on Lakeside Ave to interview Logan Brown with a broad set
of questions pertaining to how VEIC operates as an energy saving utility. My questions ended up turning into an hour
long highly informative discussion of how business models and policy can be utilized
to serve a greater purpose such as responsible energy use through demand-side
management. Here’s what I got from the
interview:
VEIC’s initiation into the utility market
·
Before becoming a utility….
o
VEIC had to submit a request for proposal (RFP) over
efficiency program/contract every 6 six years.
o
Because of VEIC’s long term project management methods,
this 6 year evaluation phase became an obstacle.
o
Ex: If VEIC is working on a 10-year efficiency
contract with a business, the mandatory legislative RFP to operate process
makes it difficult to plan on a long term model with the business.
o
Eventually VEIC decided that it would be best to
assume a solution oriented policy to “be awarded a franchise like that of an
electric utility that would allow 12 years before having to go under review by
a regulating agency”(Brown, 2013).
·
VEIC operates under a performance based contract.
o
The corporation acquires revenue at fixed rate
for their services but to achieve full payment, VEIC must meet certain
performance metrics as stated in contract.
o
This makes VEIC different from most supply-side
utilities.
·
Supply utilities have to set a price on the
energy they are providing through avoided cost rates, cost of operation,
consumer demand, etc.
o
In Vermont, because there is no retail choice,
these utilities are regulated monopolies in the sense that they don’t have to
compete for a customer base, but must meet the guidelines of the Public Service
Board.
o
This restricts the amount of profit that can be
made. To make a rate change, the utility must go through a legislative process
with the PSB and the DPS.
·
Instead of selling electricity, VEIC sells
efficiency, or in other words, the cost saved by not using energy
o
Because VEIC is technically not selling physical
product, the revenue comes from a service charge on the customer’s electric
utility bill.
o
Where VEIC accumulates scrutiny is how effective
their programs are at making a return on investment on the rate payer’s funds
o
This return on investment can be extremely
difficult to measure based on the different applications of energy saving
projects.
§
kWh saved per dollar spent is the most common
energy metric
§
VEIC makes claims on energy saved which is
reviewed by a regulating agency.
o
The efficiency charge can be confusing for many
customers as to why they’re receiving it.
§
It may seem that it is adding onto the utility
bill, but by having the charge, utilities can afford to lower their rate. So in
effect, the efficiency charge is saving more money on utility bills than it is
asking for.
§
A common saying at VEIC is that “consumers don’t
pay rates; they pay bills,” so that while an efficiency rate may increase, the
overall total of the bill could go down (Brown, 2013).
·
Every customer paying an efficiency charge has
the right to access VEIC’s services:
o
Discounted light bulbs, rebates, custom projects,
etc.
§
Energy retrofits
·
VEIC’s impact on the electric market can be demonstrated
by Vermont’s negative electric load growth (which is extremely uncommon).
o
This means that even though population continues
to rise and more energy consumptive practices take place in the state,
efficiency measures have actually been able to decrease the amount of energy
consumed in Vermont.
Brown, L. (2013,
November 15). Interview by G.H. Rinebold [Burlington, VT]. Logan brown: Veic.
FAST TRACK FOR SMART GRID; BURLINGTON APPROVES $6.2 MILLION IN CONTRACTS
Despite privacy concerns, conversion to smart grid system is moving ahead in Burlington, Vermont.
This is a small overview of a proposed microgrid project on the University of Connecticut campus. The grid would provide economic and electrical stability. In the layout view, a couple facilities are targeted as sites where electric consumption is crucial (health care centers for instance). The micro grid creates a buffer from outages that may occur in the regional grid. It also provides a more efficient way of consuming energy in the fact that demand-side consumption can be managed with ease because of energy storage technology.