Vermont PUC denies request by GlobalFoundries to become independent utility

by Timothy McQuiston, Vermont Business Magazine The Vermont Public Utilities Commission on Thursday denied a request by GlobalFoundries to make its Essex Junction facility an independent energy utility.

Last April, GlobalFoundries filed a petition with the Public Utility Commission (PUC) to do just that, but yesterday, the PUC denied the request because it would require an exemption to the state's renewable energy requirements.

The PUC order stated that while it could approve creating a separate utility: "We do not have the statutory authority to exempt GlobalFoundries from the statutory requirements imposed on all utilities by Vermont’s Renewable Energy Standard."

Effectively, even as a separate utility, GF would still have to follow the same renewable energy standards. SEE FULL ORDER BELOW

GlobalFoundries, and previous owner IBM before it, has long complained about electric costs in Vermont. While it gets a wholesale rate from Green Mountaiin Power and is its biggest customer, GF maintains that its electric costs are 80 percent higher than what it pays at its two plants in New York State.

GF said the Vermont plant (Fab 9 in the GlobalFoundries worldwide system), consumes 8 percent of the state's total electricity usage. This is more than the entire city of Burlington.

As a separate utility, it could buy its own electricity. Its petition to the PUC did not commit itself to following the state's Vermont’s Renewable Energy Standard. Those standards have aggressive goals to reduce green house gas emissions (retail electric sales from renewable energy to reach 75% by 2032.)

The proposed Climate Action Plan would require utilities get 100 per of their electricity from renewable energy sources by 2030.

GF is the state's largest for-profit employer with about 2,000 employees.

The Conservation Law Foundation issued the following statement: “The PUC made the right call today,” said Chase Whiting, CLF Vermont staff attorney. “Allowing GlobalFoundries to skirt the state’s climate laws would set us back years in reaching our pollution reduction goals. This would be nothing more than an illegal loophole for a wealthy corporation, and officials saw right through it.”

GlobalFoundries could further petition the PUC to become a separate utility without requesting an exemption to the renewable energy standard.

GF issued this statement following the PUC order: “We are disappointed with the decision and are now in the process of assessing the impact and next step.”

The PUC's order effectively sends the issue to the Legislature to decide.

The Vermont House Republican Caucus wants the Legislature to do just that.

Saying that the future of the chip manufacturing plant is in peril, the Vermont House Republican Caucus Friday called on the Vermont Legislature to enact an exemption this session to ensure GlobalFoundries is allowed to make its Essex Junction facility an independent energy utility.

“Global Foundries paid $36 million for electricity in 2020,” said Minority Leader, Pattie McCoy (R-Poultney). “Their annual electricity bills in Vermont are nearly twice as much as those in New York where they have facilities in Malta and Fishkill. Global Foundries made clear in their petition that controlling these costs is absolutely critical to its ability to stay competitive in a very competitive chip market. The Legislature must help.”

“The writing is on the wall for us,” added Representative Patrick Brennan (R-Colchester). “A top manager of the facility made it clear last year. If the facility does not remain competitive, Global Foundries will not invest at the site anymore. It will be a slow death, he said.”

“Global Foundries has spent millions of dollars in recent years on energy efficiency measures, and continues to cut its carbon emissions” said McCoy. “They have been incredible partners of the state and community members in Chittenden County and they are simply asking to be given the ability to control better their power costs, so that they are competitive in this market, and will continue to invest here in Vermont.”

In its statement, the House Republican Caucus said will be doing all it can through this session to put into law the exemption needed by Global Foundries so that the facility can become an independent energy utility.

Vermont's electric costs are 6.4 percent higher than New York state overall.

But because of how rates are shifted between residential, commercial and industrial customers, industrial rates are 74.2 percent higher in Vermont.

Residential rates, meanwhile, are nearly the same (Vermont 20.15 cents per kilowatt hour, versus 20.04 cents/kwh in New York), according to the US Energy Information Administration, November 2021.