 Good morning, everybody. I'm Tim Brighlin and this is the Thursday morning January 21st edition of the House Energy and Technology Committee. We've got a great group of guests with us this morning that I'd like to introduce and I've really been looking forward to this discussion. The guests we have with us this morning are folks that have all testified in this committee before and been having a conversation with over the last probably nine months, both in committee and outside of committee about the discussion we're going to get into today, which generally speaking I would refer to as convergence and in telecom land I think we've talked about convergence in the last 10 years, kind of in the context of more specifically about internet connectivity and I was thinking this morning that 10 years ago, I had all these different lines coming into my house I had a copper line from Fairpoint that I would, you know, pay 75 bucks, 75 bucks a month for for copper line service phone service and I had a satellite dish from direct TV 80 bucks a month for for television. And I had a little dish on my house for blue wave, which was an internet satellite service for whatever 50 bucks a month. I had one line coming into my house from EC fiber. And I have voice over internet protocol phone service through that obviously I get fast internet through that. I've got internet TV service all through that one line, you know, for whatever it is 105 bucks a month and plus whatever I pay to YouTube for for television. You know it's that type of telecom convergence we've talked about a lot in this committee in recent years. But this morning's hearing is about a different type of convergence but equally important I think and it's going to be extraordinarily transformative over the next decade, which is kind of the convergence of the ubiquity of broadband internet and our electrical power sector. And Brian Otley, who is the chief operating officer for Green Mountain Power is going to be our first first witness this morning and Brian's going to, I think talk a little bit about this topic. But my expectation is and Brian has guided me through some of this in recent months is that, you know what we've focused quite a bit in this committee in recent months about the inequities caused by the lack of internet service for some Vermonters for for some obvious reasons remote education, economic opportunities, health care opportunities. There's also inequities caused by lack of broadband service and some of the energy opportunities, particularly energy, electrical energy opportunities, and you know the massive changes that we see in power technologies coming down the road in the near future, related to resiliency benefits, carbon reduction, and importantly cost benefits for Vermonters. If you have a broadband connection, you are going to have access to those benefits from an electrical standpoint. You know, the other thing that I'm really interested to hear from our guests on this morning is the role that distribution utilities are going to play and are playing in helping accelerate the expansion of broadband service in our state, working with CUDs and in some cases, for profit entities around the state in pushing broadband farther into the rural areas in the back roads of the state. Distribution utilities are going to have a very important role to play there. So our first witness this morning, Brian Otley, as I said, COO of Green Mountain Power, we also have with us. Patty Richards, who's the general manager for, for WEC, Washington Electric Co-op and Barry Bernstein, who's the president of the Board of Directors for WEC, and then also Derek Johnson, who is the Vice President for Strategic Innovation for Velco for months, one transmission utility. And I'd like to welcome you all. As I said, I've been really looking forward to hearing your testimony this morning. And Brian, I believe you have co-hosting ability. And if you want to bring up a presentation that you're going to share with the committee, you're welcome to do that. So, anyway, welcome everybody. Thanks for being here. Okay, working on it now. Hopefully, you'll let me know if I'm successful. Not seeing it yet. Okay, hold on just a second. And if we need to in a pinch, I'm guessing Matthew could could pull it up and control it for you from our end. Yeah, I'm struggling to be perfectly honest. I'm getting a bunch of security things. And if you could pop that up, that would be great. And for, for members and folks in the public, this is something that's on our website that you can pull up as well. So yeah, but just perfect. Thank you, Matthew. So thanks, folks. Good morning. And thank you for allowing me to join you. I'm Brian Otley on the COO of Green Mountain Power. I'm sorry, Mr. Chair. Great kickoff could not have asked a better stage to be set. So thank you for that. Matthew, if you could go down one. So I'd be remiss without doing our little paid advertisement. Just for the new members who may not know exactly who GMP is this is just a quick overview. This is a distribution electric utility, which means, you know, we're responsible for serving customers directly off of the poles and wires you see typically roadside. We serve about 266,000 customers in almost all of the towns in Vermont, and we distribute about 75% of Vermont's electric load on an annual basis. Spread out. We operated out of 15 district offices around Vermont. So we're in most of the communities that you all represent. We're a workforce of about five little over 500 employees with about 285 of those union members in the in the local 300 of the IBW. We are one of the things we're most proud of is our energy supply. So today we're 95% carbon free in the power mix that we distribute through in our electricity and 63% of that is renewable we do have a commitment by 2025 to getting to 100% carbon free or carbon free and, and by 2030 to be 100% renewable you know Vermont is blessed with having across all of its utilities a very, very clean power supply that powers its electric grid. And that is one of the things we'll talk about today as to why we need to take more advantage of that. You know, and then I'll wrap with GMP is a little bit of a weird utility frankly we were the first utility in the world to attain be corpse certification status be corp is a corporate certification for social conscious and environmental good. And so we worked with the be corp organization, which had never interacted with the utility frankly when we engage with them and we were able to achieve a certification on our first year of eligibility. And that has provided us access to a community and a set of guidelines that continue to drive the way we think about the business, and the way we think about setting our annual goals to become. More and more year after year, compliant with the be corp model as it as it relates to being a good corporate citizen. Matthew if you could go down one please. Thank you. So, just as chair Briegel and said, you know, convergence is what we're here to talk about. And so we have spent the last decade or so, learning that the energy opportunities in Vermont are expanded and accelerated when energy and telecommunications are paired, and you can take advantage of the latest clean energy technologies, oftentimes located at the customer site to deliver on a higher order of goals and objectives. On behalf of the customer that that that has the device at their home or at their business, as well as the goals of all of our customers as they tell us, which is mostly around keeping our power supply or keeping our electric supply low cost, low carbon and very very reliable. So as I said, Vermont has very aggressive clean energy goals, we have the we have the cleanest power supply in the country which is a huge advantage from an electric standpoint. I think it's no, no shock to any of you. You know, over the last several years, it's been quantified that the transportation sector, basically cars and trucks moving around the state, and the thermal heating and cooling sector, where we heat and cool our systems produce the largest share of Vermont's carbon emissions every year. Okay. In other states in the country, the electric system is often a significant emitter of carbon emissions, because their power supplies rely have more heavily on fossil fuel sources to create the electricity. Vermont is not in that situation. We've got a very clean electric sector and transportation and thermal heating cooling are the things that we hope to clean up to continue to reduce Vermont's impact on global carbon emissions. There is a set of aggressive legislation in Vermont that allows Vermont distribution utilities to help our customers transition off of fossil fuels and onto our clean electric system. We're able to provide them incentives, and we're able to engage them in what we call energy service programs that allow them to fuel switch some of their carbon based activities over to clean electric. So an example of this would be if a residential customer has a fuel oil furnace in their basement and they want to begin to transition off of that as their primary heating supply. We have incentives to enable them to put in cold climate heat pumps, which is a technology that is powered by electricity, clean electricity, and will allow them to rely less and less on their fuel oil furnace and more on the heat pump to do the heating and cooling within their building. So that's just one example of the ways that Vermont distribution utilities are engaging in energy services programs to help customers offset fossil fuel use. We are seeing and we've seen over the last decade, more and more what I call clean energy technologies coming onto the market that are allowing customers to make these fuel choices so battery storage systems, electric vehicle chargers called climate heat pumps, heat pump water heaters, and a variety of others. These are the new technologies that are arriving on the market clean energy technologies that GMP and other distribution utilities are incorporating into their energy services programs to provide to our customers with the option of switching off of the traditional fossil fuel sources that they have used over the years and transitioning those same functions whether it's powering a car, heating or cooling a home, heating domestic hot water, allowing them to switch over to the clean electric source that allows them to lower their carbon emissions. With respect in the decade ahead, we'll see more and more of these types of technologies emerge onto the market. We, you know, we may not know what they are today, but we know what they we they're every day working on these on new technologies that will allow more and more of whether it's the business community or the residential community to run their lives on electrically sourced technologies. And as we found over the last decade, last decade that these technologies can deliver the most benefits to the grid and to our customers when they are aggregated in choreographed through broadband connectivity. In other words, today, GMP has access to, I think it's roughly 15 megawatts of battery storage systems that are disaggregated out among our residential customers in the form of power walls. Power walls are a Tesla battery home battery storage system. And we've got, I think we're coming up on almost 1000 installed units that allow that we can access through broadband, we can access those units and, and, and use them to help us with peak planning efforts. We can use those to help us with planning ahead of major storms from a reliability standpoint, we can use those on heavy solar days in the summer in the spring, when we want to when we may have a circuit that has is being has a lot of solar attached to it. And we want to absorb a lot of that solar at a time when when we can use the batteries to do that. Other things. Same thing for smart EV chargers we've got almost we're coming up on almost 1000 electric vehicle chargers that are connected to our management systems. So that on a peak day at the peak time of day, we have agreements with our customers that allow us to call off the physical charging of their electric vehicles in their garage with their permission. So that we can ride through a peak with with lower, lower generation that can save money both for the customer who allows that and all customers in the form of power supply savings. So to the point that chair Brigham said earlier, we do not have equity and equitable access to these types of programs for all of our customers and the limiting factor to that is oftentimes the availability of broadband. So the way I think about it. All of our customers all of GMP operations are funded through the dollars of our customers. Okay, we're a public service entity and our operations and the services we deliver get funded through customers. We have a subset of our customers who lack adequate broadband, who cannot participate in the energy services programs that we offer. So they're, they're helping to pay for these programs but they are not able to participate in them. That's an inequity that has been that has only come to light in the last, I'd say, you know, less than 10 years. As GMP has started to push energy services programs to the other side of a customer meter and, and use the technologies that the market is offering to create programs that can deliver power supply costs reductions carbon emissions reductions reliability improvements and a host of other energy system benefits, but those customers that lack adequate broadband can't participate in those because we're not able to connect to those devices at their locations to incorporate those into our grid operation mechanisms. Okay, so broadband energy the convergence of those things has become very clear for us and we think it will only be it will only become more and more important in the future. Matthew if you could go down one please. And so, connecting underserved broadband locations has a direct benefit for for electric customers okay. We've talked a lot, you know, since the pandemic hit that customers without adequate broadband or suffering because of telehealth, remote education remote working and a variety of other things but there are direct energy system or electric system benefits that are enhanced because of broadband access. We just talked about energy services equity. I think that is a concept that from GMP's perspective, we believe we have a obligation, we have an obligation to try to address energy services equity within our service territory. And at those locations where customers do not have adequate broadband in order to bring equitable access to our energy services programs now and ongoing. So broadband as I talked about it can help reduce carbon emissions, which is a big energy system objective. The technologies we're able to use an aggregate allow us to manage through peak events and other events that allow us to reduce the carbon emissions that occur as a result of the activity in our grid. And also help us lower power supply and regional peaking costs, when we can use our energy services programs and the devices that are enrolled in them to manage peak days and other distributed generation, you know, solar type peaking events where we're able to absorb more renewable generation than we otherwise would have because of the presence of batteries and other things we lower power supply costs and we lower regional peaking costs. And then finally, in a world where all of our customer locations have adequate broadband, there are certain operating costs that GMP incurs that that could be improved one example of this. And that could be almost 10 years ago put in what is known as an advanced metering system or more informally a smart meter system. That system today operates off of a telecommunication a series of telecommunication telecommunications technologies to take the information that is measured at the meter and and basically hop it back to GMP so that we can use it for all of the things we need meter for. In several years will be up to do to do a renewal of that system, those systems typically have about a 15 year life. In a world where adequate broadband exists at almost all if not all of our customer locations. The technologies we would look at for that next generation metering system are going to be very different than if the situation was as it is today, where we have roughly 20% of our customer locations suffering from inadequate broadband. We can, we can invest in systems that are more reliable we can, we can invest in systems that are likely to be the lower cost. Again broadband also has some operational advantages. If it can be ubiquitous if it can be ubiquitous within our service territory. And then, you know, ancillary benefits but no less important there are some public good benefit polls through that are not directly related to the electricity electric system which we've talked about right. The pandemic has made it clear that, you know, locations that lack adequate broadband can't can't participate in telehealth effectively. It makes remote education real challenge and anybody trying to do a remote working environment. Without adequate broadband and I know I've personally spoken to dozens and dozens of these reminders and been on zoom calls with them where they've had to go to the local library or some other place during the pandemic to try to get adequate broadband. It can be a real challenge. So broadband has clear and measurable benefits for electric customers. Matthew, you could go down one more. So what are we looking at from a gap standpoint. Hopefully, you all are familiar that DPS has done some very good work in base in quantifying what the gap is in terms of the number of locations in Vermont that lack adequate broadband the FCC standard for broadband is defined right now as 25 megabits per second. Download speeds three megabits per second upload speeds. There are based on the on the most recent DPS study about 69,000 locations in Vermont that lack that there have been some public funding opportunities to close that gap. The state of Vermont put through the cares act put out connectivity connectivity initiative grants in the latter part of last year, and the Federal Communications Commission did. What was known as their art off auction at the end of the year as well, which provide on paper anyway funding for some of those 69,000 locations. And after those two funding opportunities today. Best information we have there's about 46,500 Vermont locations that do not have a clear path to funding to be connected at the FCC standard. We estimate based on our look at the data about 54% of those locations exist in GMP territory. Over 25,000, and a little more than 75 hundred of those about 30% of those locations have current connectivity speeds below 41 megabits per second, which is just awful. That's it's it's essentially unusable for anything that you would want to do from a telehealth from a, you know, telecommuting teleeducation whatever. These are the locations today that do not have access to GMP's energy services programs, because the lack of reliable bandwidth prevents them from participating in those programs so that's, that's at the worst edges of our service territory those 7500 or so locations. Those are the ones we're talking about really suffer from what we call the the energy services and equity. Matthew if you go down one please. So how do we think we can help. You know you'll hear from Patty Richards right, right after me, and you may hear from some other distribution utilities. We all have may have a slightly different view of how we think our organizations can help that those views are generally informed by the unique differences that exist in our service territories the demographics of our customers. The graphic locations we serve and the, the broadband footprint that exists in our service territory today. So from a GMP perspective, what we've been working on and we think the focus of our work in the short term is on what we call figure what we call addressing the make ready obstacle to broadband expansion. The key is a term we use to describe construction work that needs to be done on our polls in order for a new attachment to be made to those polls so if you think about it. You know we've got polls all over our service territory, and there are both on many of those polls most of those polls there are electric wires, and then there are these other wires that you see those other wires are almost always communication wires they may be copper wires carrying voice, they may be coaxial cable wires take care carrying data and other things they may be fiber fiber fiber optic cables carrying voice data or or any or any other, any other telecommunications in order for for new attachments to be made against those polls, those companies need to make an application to the poll owner in this in our service territory GMP. And then we go out do a survey make sure the polls from an engineering standpoint are appropriately tall or appropriately structurally structurally sound, and there's enough spacing on the poll for that attachment to happen where there could be changes to polls. We make those changes to accommodate that new attachment. That's expensive work, and it's very variable work so one of the things we've learned, actually, Matthew if you'd go down one slide I think I have more detail here. So, in in, we've been talking to broadband companies for the last six months trying to figure out how we can be most helpful to them. The make ready cost is this, it can be anywhere from 10 to 25% of total project capital cost depending upon the nature of their expansion project. It's also very variable from one project it can be, you know, less than 10% in the most extreme projects, it can be up to 40%. So, it's one of the most difficult things to forecast and to estimate until you actually go out in the field and do the engineering survey survey to do that. Make ready has been identified for us as a as a significant obstacle, both because of the, the amount of the capital and the variation which makes it very difficult for these broadband companies to estimate that, and then have credible data to go out when they raise capital to be able to characterize what the project economics are going to be when that make ready variable is hard to pin down. So, we're really focused on on figuring out a way to do that we have a notion that we've been running around talking to broadband providers distribution utilities and some of the telecommunications leaders in the state of GMP, offering sort of a cost relief or cost incentive against make ready costs for telecommunications projects that will bring acceptable broadband connectivity to those unserved locations in our service territory. And with the department on how we can, you know, construct a program within the current regulatory and statutory framework that would be acceptable to regulatory precedent but also be constructive and helpful to broadband companies to to accelerate and expand their their basically their infrastructure build out in our territory to reach those worst of the worst less than four one locations. We think that in reaching those less than four one locations about 7500 of them, you will probably pass many of the other locations that are considered underserved. They may be a little better than four one or they may be four one but but they not up to the 25 three FCC standard. So we're hoping by offering some sort of a cost incentive program out to those worst of the worst locations we can jump start more deployment into those rural areas that have been hard to reach so far. We're working actively on that and we hope to have something in front of folks. And certainly that would be a what we would consider a well vetted strong proposal to have some sort of a make ready cost incentive available to telecommunication providers. So, I'm going to stop there and open it up for questions if folks want to discuss discuss this further I yield back to chair Brighlin. Great question Brian just kind of a clarification in terms of the make ready work that you talk about. And, and, you know, potentially partnering with internet service providers and working with regulators and cost recovery and things like that, but the make ready work itself. Is there anything that would be done in a highly planned way with ISPs would it be done. I don't know what the, almost preemptively, if you will, can you know kind of opening the space that make ready work has been done here who wants to come in. So the choreographed would that be ahead of time versus kind of laying the groundwork if you will for whoever is going to, you know, come in. Yep. So the, there's, it depends on on there's no right answer to that you can do it any way you want there is a challenge in doing it ahead of a telecommunication providers expressed expression of interest to go to a location. Because you, you may get into a situation where it's build it and they will come. And if they don't come. That's a challenge. Okay, from a from a regulatory standpoint that there's a precedent for that that that is a challenge. I'm just illustrating one of the things we've been we've been doing is, you know, it's, it's not. It's, it's no coincidence that the areas of the state that, at least in our service territory that have the worst broadband also happened to have typically not it's not one for that's thematically correct. They also happen to have some of the worst electrical reliability at the same time these are the rural parts of the state hard to reach low density. The electrical infrastructure in terms of the age of the polls and the wires tends to be older in those areas, the incidence of outages and the outage statistics tend to be higher. And so, you know, GMP is in the middle of our what we call our climate plan which is an accelerated resiliency investment program to rebuild the distribution lines and in many of these areas of the state. And we think and we've been working with some of the telecommunication providers to as we rebuild these older lines, and, and bring them to modern construction standards and perhaps take them out of the out of the field and bring them roadside at the same time. Do not only the make ready work but actually do the telecommunication telecommunication transfer work so that you have one set of crews, one set of traffic control people. You're doing the electrical work and the telecommunication work at one time and using the most efficient set of resources. And to get that section done, not only from an electric standpoint but from a from a communication standpoint that I think is the real opportunity. It's difficult to coordinate all of that work together but I think with the transparency we'd like to bring. There's a real opportunity to do it. That's helpful. I don't see any other hands up at the moment, but you know, I'm sorry Lucy, you know, go ahead, go ahead, Representative Rogers. Thanks for organizing my thoughts. Thank you for presenting I, I think it makes total sense there's so much overlap and parallels between the need for electricity and the need for broadband and the ways that they can benefit each other. I guess I just had a couple of questions. One was. Do you see any changes you would need from in statue or from us in order to support your interest in in in helping with the make ready costs and the make ready profits. Right now we are we are mapping out a regulatory path to try to get review and approval for this. So, so you asked me the question today my answer is I'm hopefully I'm hopeful we don't need a legislative path on this. We would always love legislative support I'm not sure exactly the form that that takes or looks like but we do think we have a reasonable regulatory path with the public utility commission to seek review and approval for the ideas were firming up. So that's that's the way we're looking at it today. Okay, thanks. And then my other question is. I guess I in my understanding of the electric coops and then my knowledge of the CDs. It seems like there's just such a large amount of overlap in the in the missions of really being the electric costs for electricity being the way to ensure that every household is served and and that the commission is really based in the public good and and in local control and and ownership and decision making process and that seems quite parallel with the CD model so I'm curious if you see a difference or a prioritization in supporting the make ready work for the CDs that are working with such an overlapping and similar mission to the coops or if you see this being kind of across the board policy. It's a great question. So, you know, we've spent a bunch of time with various CDs and the CD coalition as well trying to, you know, vet different ideas and get feedback on how to be constructive on this. I do see it I do see it. So let me step back. We view CDs as both enablers to broadband and potentially even being ISPs themselves so CDs can have multiple roles within their territories and each of them. When we talk to them anyway expresses, you know, slightly different views of what they think their forward trajectory and their future plans will be. But, you know, we view them as both a an enabler a partner, as well as a potential provider, which is great. And I think that we would put together, you know, our, our top mission is to is to try to cause connectivity to be built to these locations. And if that can be done, you know, directly through a CD that's terrific. If it can be done directly through a commercial provider. That's terrific our goal is to get these locations connected. I do see a really valuable role with the CDs. In addition to their other work and aspirations of being kind of a verifier on the ground. So, you know, what we don't want to do we want to we want to avoid any chance that a developer would access funds that we may make available, and then either deliver on the commitments or deliver on commitments that are less than expectation based on the on the on the funds that they've accessed. And so the CDs know their territory is better than anyone they know what the current connection speeds are within their territory they know, you know what what broadband infrastructure exists on the roadways and what doesn't. And so I see a partnership opportunity with the CDs to be kind of the verifier of the truth on the ground of what construction has happened, and when retail broadband services become available at the locations that are being targeted as a kind of a back point before any funding is signed off on for the developers that that seek to access it so that could be in that could be a CD accessing the funding themselves if they're doing those builds. It could be the CD serving as a truth teller or a fact checker to a commercial telecom who's accessing the funds and doing the build. But I do see a valuable collaborative role for the CDs in the rollout and administration of something like this. Absolutely. That's helpful and clarifying. Thank you. I think I can I get to ask the question a little bit more specifically I think where where I was really getting at with that is the electric coops understand deeply the importance of commitment to serving everybody as do the CDs. And what would be the commitment to supporting make ready work that supports broadband build out in a method or in a way that then supports and enables access to every address as opposed to supporting make ready work in a way that may actually in the long term jeopardize build out with the recognition that that could be through a private company or through a CD but but that certain designs of private companies would then jeopardize the the mission of getting broadband to everybody in the long term. Does that am I asking that in a way that I think I get it. I mean the the the problem we're in today is a result of broadband companies effectively cherry picking routes to to what are you know deemed the most profitable locations right and ignoring the others. You know the coops the coops are no different than gmp we we all have an obligation to serve all of our customers and all of our locations with electric service right we don't. None of us have the ability to pick and choose on the electric side that has not been the case on the telecommunication side and that's part of the reason we're in the, you know we have the we have the connectivity gap that we have today. What I hope is, is that between, between the, the capital of the of the CUDs and pro and commercial telecoms. Paired with oversight of the CUDs and the folks that are on the ground locally that will be able to manage. And again paired again with an a potential cost incentive that is only applicable to those locations that are the worst of the worst. Right, that that is the way you're going to spur development to to the to the hardest to reach locations. I'm not sure it's it's a perfect system or a perfect solution, but I think it's, as we've thought it through it's it's the one we feel good about balancing the interest of speed. You know, getting further into these, these locations, while also responsibly safeguarding electric customer dollars in doing it. I mean, one thing I probably should say is, you know, gmp. Really hard every year to try to take cost out of our system out of our delivery we want our rates to be as low as they can be for our customers. And so we safeguard against, you know, unnecessary or or imprudent cost increases at every turn. So we're laser focused on that. We had a lot we've had a lot of internal debate about should we be, you know, should we be rationalizing additional customer cost on the electric side in in in the hope of, yeah, solving energy services equity, but also, you know, but it's applied to telecommunications infrastructure. That's not an easy decision for someone like us to make. This is a time when we want to keep electric rates as low as they can to continue to accelerate the transition off of fossil fuels we want to sunset fossil fuels we want to increase electric because that's the climate, the climate solution that that we're looking for to try to be the good steward in global emissions. But we think all things considered there are there are enough benefits to undertaking these costs and that will get paid back on that through, you know, carbon emission reductions and power supply cost reductions and things like that, that it makes sense at this time. That's helpful. Thank you. I think, thank you. I'll end just by saying I'll use my hometown as an example because it's actually not in Green Mountain power territory which is Waterville that I would imagine it's quite similar to many of the rural towns and I definitely appreciate the emphasis on make ready work for unserved and underserved areas. My town of Waterville has currently in the, at least as of two years ago in the public service department maps had zero addresses that were served with broadband and in that way every address would be considered high priority and like many Vermont towns that has, you know, main paved main road right down the middle with a lot of houses on it and then all of the back roads kind of spreading out from there. So if it were in Green Mountain power territory, and if Green Mountain power were to support the make ready work of a company coming straight down the main road. That would be long term one of the worst things that could possibly happen for being able to achieve universal service and it would basically make it impossible for the back roads of my town to ever receive universal service. And so that's where I was just that's where I was coming from with with that is, you know, even though every single address along that that main road would be a priority, unserved or underserved address because no addresses have broadband just just making sure that there's some you know, conscious build and it seems like you're doing that and it seems like collaboration with the CDs could be a really great opportunity to to be a little bit more conscious in the way about so I will. Thank you and and thank you chair for for letting me engage in that for for a little bit. I mean, I think your your hometown is a is a great example Lucy of how, you know, at a high level. You know, doing doing that good work could actually have negative ramifications. I mean this is something that I think a lot of rural towns are are facing. So, I think it's a great example. Any other questions for Brian. Brian, I'm hoping you can stick with us when we kind of get through all of our guests. Oh, I'm sorry Mike I spoke too soon. Go ahead, representative. This isn't a question for Brian but it's just I know your son Cole is looking for an internship. And I just wanted to let you know that if you wanted to he could tune into our committee hearings. I'm in today by going to the committee website and clicking on the live stream link. Okay, thank you Mike yeah just my sons are using college and coven disrupted his semester schedule so he's off this spring he's actually in the middle of a January class January term right now but he's he without a lot of notice he was told, you know, hey you're not going to be on you're not going to be here for spring semester taking classes spring semester so we're doing a little bit of scrambling with some of this stuff never ends, never ends. Yeah, the tuition bill will still be there. So, every time, every time. So we're going to move to the folks who are here from Washington Electric co op we've got Teddy Richards the general manager and and Barry Bernstein who's the president of the board of directors. I'm going to hand the torch over to you guys now and you know to to to, I know that you're working on some very specific strategies within your geographic footprint and on broadband, really eager to hear about those and and welcome thanks for for being here both of you. Thank you very much for having us. Barry and I will probably tag team this I'm Pat for the record I'm Patty Richards the general manager at Washington Electric co op. I'll start out and I'm sure we'll do some tag team along the way and welcome questions let's have this as a conversation. I do not have slides to put up so hopefully a talking had will be fine for the next several minutes. I want to thank Brian, Lee from GMP for team this up I thought he did a fantastic job kind of framing it, setting up some of those basic parameters of what's, you know, low speed internet service and I'll talk a little bit about, you know, where we are at Washington Electric co op. As Brian did I'm going to start with basically some basic facts about who we are is watching electric co op and representative Rogers I really want to thank you for the co op comments. In terms of mission driven, you know, making sure we pick up all of our membership base. That's really going to dovetail well with what we talk about here from Washington. So just a little backdrop. Weck was established in 1939. We're going to go back 80 years ago to the electric model. We picked up consumers that were just like representative Rogers indicated off the main road. So at the time the investor on utility said, Oh, it's not economic to go reach back into those hills and on the dirt roads, and we're not going to pick those consumers electricity 80 years ago. So, a bunch of hard working Vermonters got together, and they said we want electricity on the hills we want electricity in our houses way off the main road, and they established Weck with 150 customers to start. We are now roughly 11,000 customers 11,000 meters, we cover 41 towns in the state, that's roughly 17% of the geographic area of Vermont, but we are small, we're less than 2% or 1.3% of the energy use of the state of Vermont. We are the most rural utility in the state. I just want to put that kind of bounding on it because we are, you know, we are the hills we are the dirt roads, and my rule of thumb, coming into Weck learning quickly, if it's on pavement, we don't serve it. So we're definitely very rural. And our membership. We're 96% residential. So very little commercial industrial load, primarily houses. We are not for profit. We are owned by our members that so the co-op mission is about serving everybody. We're very, very much mission driven. We have a nine member board of directors with their democratically elected they fill a three year seats and we have an election every year. And we conduct annual meetings and our membership drives through voting and directors and feeding us comments they drive our policies and are where we head into the future so we're very much consumer driven member driven. And that's just to serve everybody in our in our rate based membership base. So we have this just a little bit about the co-op, you know, and again I really want to just stress that we're super rural. Back to that electric model 80 years ago where electricity was not provided. That's where we are right now with broadband. It was not perceived as economic for the for profit internet providers, broadband providers to come into our service territory. The department of public service has done some work for the state in our service territory. 75% of the rate base the consumer base is underserved with internet. That's three quarters of our membership. We have a giant gap in terms of who has internet. And if they have internet. It's usually very slow internet. So they're either underserved or completely unserved. We have a giant gap. So basically I'm setting the stage of Wex infrastructure needs to pick up our entire membership base for internet is significant big. Very much similar to where we were 80 years ago and providing electricity. So, where we are today. We have been studying the cost and benefits and how we would pursue broadband and our service territory we've been working with a consultant to map this out. We've figured out a path forward and our strategy is not necessarily WEC being the internet service provider, not being the actual company that takes the phone call from the consumer in terms of internet, but we can provide the backbone. So, comparing we own our polls and our infrastructure and our service territory 95% of the polls we own. And our business model that we are looking at is that WEC would deploy and be responsible for the fiber backbone, which is the middle mile. So we're kind of like the state roads so to speak of internet, and then we would partner with CUDs and let them be the internet service provider so basically taking from our poll to house. The CUD would be responsible for those infrastructure drops, and we would be stringing fiber all around our service territory on the polls but they would be the actual internet service provider to the customer. So, that's our partnership model. The total cost to bring internet service to the unserved areas of our territory and we're looking at about, like I said 75% of our service territory meeting infrastructure upgrades because it's just there's nothing there for them. We're looking at roughly a 30 to $33 million price tag. This is providing the backbone for that that's roughly somewhere in the 23 to 25 million dollar mark, and then the CUD would pick up the residual the 8 million to 10 million for the internet service drops from our poll to the house. So, so again WEC is looking at a partnership model, and our, our structure is, we're going to build $23 million of infrastructure, and we're going to partner with the CUDs. We're going to work with low cost financing from the rural utility services which is the federal government in terms of that's how we borrow, and we would get low cost low interest rate money from the RUS facility, the RUS folks, and that would allow us to build out our $23 million worth of infrastructure. And then once we build that infrastructure, then the CUDs have some something to tap into, and then they would put their infrastructure onto our backbone and serve the consumer members, we would work hand in hand with the CUDs to make sure that we're doing this answer so that we're picking up the consumers along the way. So our goal is to pick up in predominantly the entire WEC membership that is underserved or unserved in our service territory. One of the other things that we are looking for as we explore this model is we're trying to minimize the impact on the electric consumer in terms of rate pressure. The last thing we want to do is have a giant rate increase to fund this. One of our asks that we are looking at for legislative help is a tax exemption, a property tax exemption on any new infrastructure, not any existing electricity infrastructure. Any new broadband infrastructure we have to roll out to pick up unserved or underserved, we'd like to have a tax exemption for that. The reason for that is it basically will make our economics rate neutral, very close to rate neutral on the electric side. So if we get a tax exemption, we would avoid roughly $500,000 a year. We do not have that added expense. That money makes our cost benefit, our cost infrastructure rate neutral by not having a property tax expense so it's really an important thing for us. So we are advocating in this legislative session to get that tax exemption again and this is on new broadband infrastructure in the unserved, underserved areas of the state. And I think with that, I'll ask Barry if he wants to add to this and then we can open it up to questions. Thanks Patty that was that was great I just I'd like to start with saying that if you have any co-op questions outside of this meeting. You have Mr co op, not just electric co op it total lifetime involved co op and representative Pat who is our general manager for 20 years and also our serve on our board of directors and it's been actively involved in the food co op movement housing co op movement so I just, you've got a great resource there. I also thank Brian for laying things out. Our board was trying to see what part we could play in helping to expedite getting high speed internet to our, all of our members at least having it available to them. And building on the incredible work that's been done by many of our members but who are on the CUD boards, starting with EC fiber who was the early developer of this. We weren't into competing. And one thing we have as representative Rogers pointed out, we have a common goal. We are not trying to make money on this. We are trying to make sure we don't lose money on it. And under state regulations, we're not allowed to cross subsidize. That's extremely important for us. We finally got to the place where we, and that number the patties using a percentage is about it's over 8,000 members in our co op, who have inadequate or very limited high speed service. We're going to, we will do a couple of things by borrowing that money instead of the CUD's bar in it. We take that load off of them, and having to go to the, as Carol Monroe and Stan Williams pointed out to you, having them go to the municipal revenue bond market. So that allows them a little bit more sealing and what they're doing. What we're going to do, and we've been meeting regularly with both CUD's and our territory. The base fiber represents five towns, but they're fairly new. So we really haven't had much conversation with them recently, particularly because of the our doff restriction I'm talking they were not in our consortium so we've been working with both CUD's Valley Act, which is the ISP for EC fiber, and also with Kingdom fiber Michael Burnbottom is his group that although they're for profit, they've been Michael's been committed for a long time it isn't a WEC member and also on the CB fiber board. We would release that back to them, and by by being able to access our US money at under 2% for 35 years. If we can get an exemption and when Patty was talking about infrastructure we're mainly talking about the fiber. We're bringing that fiber on our polls and then lease it back to them at less of a rate, then they can go borrow that money and build it themselves. So that's a win for them. We will be jointly marketing to our members with them because we want our members to have that access. Another benefit for both of us in trying to serve our members. So we really the, the, I want to point out a couple of things about what we're asking we're asking for when we say property tax exemption on that new fiber. This is, this is right now this the CUDs are not paying property tax so that they're made up of municipals who serve the municipals. So we're not asking to take away anything from the property tax base. We're just asking everyone to realize that if we can get this fiber build out in the next four years. We hope if we can that it will help keep younger people at home, not moving out of state, and people are wanting to move in because of the covert change of lifestyle, etc, and work at home. That's going to improve the property back tax base for everybody, because right now people aren't, aren't coming to our areas of they, the first thing they find out if they're looking at a house, what are they, they don't want to get into Tim's previous situation having four different monthly bills and what's going on. We're also 100% renewable and have been for quite a while. Our Coventry land and 85% of our power sources are from in state 15% is from the hydro New York hydro power which we've been getting power from since the mid 50s. So there's nobody in the country is in a better situation than we are and we have long term contracts and own a good part of our, our generation. So that's a big ask for us but we're going to pass that on the property tax we're going to pass that directly back to the CUDs. So it lowers the cost even farther. The economics are that if we don't get that, we are not going to be able to most likely be a partner with the CUDs if they're not paying the property tax because it's adding another burden to them. So we're working with both CUDs. We expect we'll have some relationship with any k fiber and kingdom fiber probably weightsville telecom which serves part of our territory and tops them with you know we'll we'll be working with everybody who's there. We made a decision even though it would have been more economically profitable, not to try to be the ISP, not to take on that load. And so, I'll leave it at that and if you have any questions but I, the, I will make one other comment the, the solution that we mount powers talking about in terms of make ready. It's going to work for us because we are going to be doing all of that make ready as part of our complete build out. So it'll be part of our long term financing and it will be capitalized costs as opposed to expense costs. One other comment I just want to make because I know Carol and Stan made it yesterday is in in our situation. The union employees will deal with putting the fiber on etc, but presently, what happens if consolidated, if we put a new poll in her, and they have to move the wire we have an arrangement where they will come in and deal with that. We have a shop also so you have the issue of not wanting to get involved in another union, replacing one unit's work where use this does the work and they will probably be the company that lays our fiber on our polls. They're doing that and they have an arrangement with consolidated that that's an advantageous situation but I, it's not going to be the same for there about seven or eight independent companies that also have fiber have access to our polls at this point. So I'll leave it at that and see if you guys have any questions for us. Let me just say we are definitely going ahead with applying for our loans now and hope that we can get approval by October. We would start to see that fiber build out. It will be in very close coordination with the CUDs. We won't do anything without that without a cooperative agreement with them which were, we have, we have drafted at this point. So, thank you, Patty and Barry. We do have some questions in the queue here. So I want to call on members. First representative Sebelia then representative Sims representative Yantosca representative Pat so we've got him stacked up on the runway here go ahead Laura. Thank you Mr chair and thank you for the presentation. I actually have four questions. And so I think the first is around Wex formation and if that was around the time of our country's rural electrification, both the federal activity that happened there. If that was part of Wex formation. The second question. Patty talking about about Wex not wanting to be an ISP and working with the CUD. And so I'm wondering if that in this scenario are you are you working with an additional ISP. So will there be three partners or are you anticipating just the two, the utility and the CUD. The third question, sorry, is around the financing that WEC will be accessing to string the fiber I just like to understand a bit more about where that will come from what makes you eligible to borrow it what types of terms you're looking at. And the final question is, if the General Assembly were to put in place some sort of a tax exemption as you have been asking for. Do you think that that fiber should be held publicly by a municipality or or another entity dedicated to the public good going forward or is that something you would envision being acceptable to have sold to a private company? I know those are a lot of questions. I'm in a noisy place. So I wanted to get them out and now I'm going to mute myself. Patty you want to go first and I'll jump in. So the first question regarding Wex formation relative to the rural electrification build out the answer to that is yes. Wex was incorporated in 1939, as were other co-ops across the nation. So hope that answers that question. The second question was related to Wex not wanting to be an ISP and partnering with CUDs. Sorry, my phone is ringing. We are envisioning a two entity partnership. So WAC being the backbone and then the CUD with the CUD being the face and the hand holding to the actual customer. So a two entity partnership versus three. I'm not aware of where a third entity would fit in that. But our model right now is based on a, we would be the backbone, middle mile and the CUD would interact with a consumer for billing purposes, answering phone calls, any internet service questions. We're literally just the backhaul. We would kind of be like, so that answers the second question. The third question was about finance. Patty, let me just add one thing on that. Actually, there will be third parties, but the, for instance, for instance, with EC fiber, they have their own ISP, which is ValiNet, which they're very, they're linked. And CV fiber is still trying to figure out who they will work with. They might work with two or three different ISPs because they're serving more towns. They may work with Watesville Telecom. They might work with and probably will work with Kingdom fiber and they also will work with ValiNet because all, all three of them are working. At least ValiNet and Kingdom fiber and CV fiber are all working to serve some of the CV fibers territory. So it's, it's, it's not really just cutting, cutting dry on that one. Patty, go ahead. I'm sorry. In terms of the financing, rural utility services is part of the federal government's Department of Agriculture. And as part of being electric cooperative and roll out of the cooperative, we get access to funds because of our cooperative status. Not sure that answers the question or not. If you want me to go into more on that, I certainly can. But let me just say, what what's happening is we're borrowing that money from our US, which used to be REA. It all came out of FDR's Rural Electrification Act in 1936. So we'll be borrowing through that, but we're going to be borrowing for that fiber for our electrical system. It's a little bit of a chicken and egg. But they do allow it. They do allow us then to lease it out. What's happening to us and this is a decision the board had had make and has to make but we're moving on this premise is that even though, as as Brian mentioned, we probably wouldn't have to do this fiber build out at this pace right now, because we probably get five, six years more of in quotes, the life of our am I automatic meter infrastructure still left. We feel we can go ahead and do this and borrow it right now the rates 1.6% interest rate for 35 years. So that's that we're going to pass that savings on into our lease price with the ISP CUDs, because we're just trying to make sure we have that that service at this point. So I just if that if that clarifies a little bit. It does. It does. I just want to, I just want to re clarify that question so you are borrowing from RUS to for reliability for your electric network. Right. And as Carol and as Carol and Stan pointed out, for them to go do it. It's a lot of new paperwork that they haven't had to do. We do this every four years. We have the information are on top of it, and have hired a local engineering company to work with us along with a national rural telecommunications co op to help us with that four year fiber build up work plan which will be on top of the four year. Other electrical work plan that we do. So, hopefully that's not too confusing. I think we had to go ahead. You see, because Laura had another question. So the last question regarding tax exemption. What WEC is a not for profit. So we there is no profit piece in here for our portion of the borrowing that we do. The reason why we have access to the rural utility services RUS financing. So as a not for profit. We're doing this to extend infrastructure versus trying to make money off of it. And like Barry said, what we're trying to do is is pass on just to just our actual cost to the CUD so that we can drive the cost to the ultimately to the customer. The internet service gets to the customer as low as possible. We want to make sure this is affordable so people take broadband service up from the CUDs that partner with us. So the second part of Laura, I believe your question was how do we feel about it towards the, the projects I want to just clarify we're asking for to have an exemption on any new fiber. It won't be if we replacing a pole, because we have to replace a pole, we're still going to that's still going to be part of our electrical infrastructure because it's going to be existing. The, it's kind of tricky. Normally, I would not support conceptually giving privates the same benefit, but what you're trying to do is lower that cost to the ultimate consumer or rate payer. Who doesn't who has inadequate fiber and any, if that exemption goes across the board to co ops and whatever munis and and green mount power. If, if in some way it's clear that they're going to pass that cost on that cost savings on directly to the CUD ISP, or to the ISP to the customer that it benefits all of us and making sure we finally reach this goal of 100% kind of conductivity for every Vermont household. And I think in that manner, it's extremely important to do it for everyone. So, and again I want to underline, we're not taking away anything from property tax, we're going to be enhancing the ability of the future property tax to grow. Thank you. I just want to state that I'm not opposed to that conceptually. I am very concerned about public investment, going to fund these extraordinarily difficult and expensive projects that we've called on now are regulated utilities and volunteers to put together, and then having the benefit of those public funds ultimately end up in private for private companies, hands who have not been part of the solution so thank you Mr chair that's the end of my questions. I just want to say I support that last statement 100% and anything that you guys do that that writes into the committee does it a legislature does it writes in that those public funds have to be passed on and can benefit that the end user is important to weave into that legislation. In my opinion. Representative Sims. Yeah, thank you. This is so helpful to hear about the incredible partnership between WEC and the CDs and your vision for serving everyone in your communities. You touch on this a little bit before but in terms of the ability of co ops to access funding that CDs might not otherwise. I heard that potentially you guys are looking at the USDA red leg program as well is that correct the program that offers 0% interest loans that can be we loaned the businesses within your community, and are there other resources that potentially what could tap into and make available to the CD at competitive rates that the CD might not be able to access otherwise and so maybe more broadly you know do you see other ways that what can help support the financial viability of the CD and not are you exploring those That's a great question. One of the things that we're going to continue to do is look for opportunities grant funds. So right now we're planning to borrow through our US for the full, the full amount that we need, but in the interim, if we can before we actually really start building and deploying. If we can find grant dollars will use that to reduce an offset costs wherever possible is that just helps lower the overall expense of project which ultimately gets passed on to the consumer for lower broadband fees monthly fees for service so we will continue to look for grants wherever possible and any any funds that we can tap to help this process and lower the cost we'll be looking into that. So, I just want to, in terms of the money that I hope will come down with this new administration into the state for grants. If wet can get some of that money. As Patty says, we don't actually draw, we don't. If we get okay for $25 million, for instance, from our US and we get some grant money that lowers that we don't have to draw all that money down. Okay, what we have had some conversations with with the CUDs are, we'll have to take a look is it better for us to borrow that money in total and make sure the CUDs get more grant money, because then we can still pass on that lower interest costs to them. So, well, we're going to work out a formula with them that anything we get in terms of grants or additional benefits, we're going it's going to lower what what our dollars per year per mile cost lease costs is to them. We'll have a movable, a movable formula, because one of the questions, for instance, at the end of 35 years, that lease will go down to zero with only the addition of what the additional operating costs might might be. In terms of the red line. Our chief financial officer director financing has been looking at the availability of that. It's, it's got a little bit more complicated than the old 0% because we did loan a few communities. There's the past due for the skating rink in Montpelier, which some people may know because they had the outbreak of the COVID, and also a incubator project in Marshfield. So we're familiar with that. And we are, we are going to take a look at it. We're also looking at there's it's changed names a little bit but there's a thing called the reconnect program or connect the connect program. And depending on how that comes out. We may be able to get a grant out of out of that money. And if we did it, it would again lower that formula cost so that the main goal is to lower the cost to the end consumer. That's what we're trying to do. But thank you. Those were good. I think what I find so interesting about the red leg program is the utilities receive the money and they turn around and then we lend them to businesses like the CD and so that's great to hear that you're exploring how you might be able to access low cost capital and then we lend that to the CD and make funds available that they might not be able to access otherwise. So glad you've already played that role for others and that you're exploring it for CDs. And we didn't we didn't have. I don't think we had any but if we did I would even know this because he was involved then. But I don't think we had we added any charge at all of that pass through. The only thing we had to do is require that those entities had some kind of letter of credit or something so that we weren't stuck. We couldn't we couldn't guarantee that long all week because if they failed to make the payments then we were on the hook for it so that but I was can fill you in on the details of that if he still remembers. Representative yet touch back. Okay. Yeah, so I have a couple of questions. Larry thank you for your presentation and your plan is to build out the fiber cabling only right. And I know there's a difference between the technicians that actually do the electrical work on the polls versus the ones that do the broadband cabling right. So, so are you going to need the broadband folks in order to do your part of the work or you're going to do that with your electrical folks, and then let the broadband folks only do the drops to the premises. So, so in turn I'll start and Barry can certainly jump in. In terms of actually stringing the fiber, our thought at this point we don't have this, like, you know this is all moving fast and furious we don't have the specifics as to how we would string the fiber the first step is to get the money, or us. But that that we're often running, but there are contract companies use this as a common entity out there, we would likely work with the CDs. In terms of, you know, who we would actually contract with to spring the fiber. At this point, we're not planning to use our electrical workers because we have them fully deployed on electric work that we need to maintain our operation side on our infrastructure for electricity. That said it's not set in stone, and we'll figure out the best way to deploy that and do that in a way that is, we get it done quickly and get it done in affordable manner. At this point, it's likely will contract out for that, but we will work with a CD to make sure we're doing that in the fashion. And one of the one of the models we've explored with Carolyn Stan and CV fiber and kingdom fiber is that we would actually subcontract to them to be responsible for the in quotes this in cooperation with us for the design and for the lane of the fiber. And they would whoever whoever does it we're going to be using somebody by you, like us just because right now the only one in the state that does it. But what we want to do is each CD might have a little ISP might have a little different design that they want to incorporate in the areas they're serving. So if we can work with them and basically funnel the money for them to oversee it, then it gives them more control over the way they want to have it ended up so that's one of the models were exploring with them. We've been trying to meet with them every couple of weeks. The, the FCC model the our doff thing is put everybody off a bit because everybody's working to try to get their next. We weren't actually a bitter, but we weren't a consortium with bidders consortium with bidders. So they're all just trying to get their the paperwork in but beginning of February we're all meeting again to continue laying out this progression with the goal. The, our goal is to be able to draw down funds by the fall of this year, so that we can get things done. And we have one of the things we're doing a chicken and egg. Is the actual final detail design which is engineering design. We, if we're going to pay for it with our US funding, we can't do that until we get the US funding. We may see if there's some grant money or another way of funneling that so we can get a step ahead. And what goes all the poles in your territory right. Yes, we do. Okay, so are you planning to build out the fiber regardless of whether you have a commitment from from your members to subscribe to it. So, we're not go ahead Patty, we estimate we did a survey of our membership as part of the business study that business plan study that we did. And we're estimated 45 to 55% take rate, which is very consistent with what the experience of the actual numbers are. So based on that survey. That's what we're, we're planning to string the fiber, or, you know, we're not doing a piecemeal we're going to do the entire it when we come to the town that we serve or to do all the polls. So we anticipate 45 to 50% 55% take rate and based on the demands created due to the pandemic, we actually think the numbers likely will come in higher. So we do have that baked into our business model. Okay, my last, my last question is, I'll go ahead, did you have something to add. Yeah, I was just, I was just going to say, we're our, our, our sticking point or where we have to come to an agreement is we have to, we need to know that the CUDs will lease the fiber that we build out because our model is based on having every mile that we build leased out the take rate, which we're looking at is that they're more confident, and all of us are relying to a large extent on Carol and Stan and valing at me see fiber, because they have actual real life numbers. They are very confident, and as Patty pointed out, particularly with the covert experience that now that more people, by the end of the fourth year are going to start to sign up and they might in the first. It's a graduated buildup over four years. And my last question actually might pull in Brian out later. With this model work with GMP. So the differences, the differences we have with WEC are, you know, Patty I forget the numbers you put out so you know I identified earlier a little over 7500 locations with less than four patty how many total members do you have in those for electric service. So we have about 11 meters. 10,000, 10,000 locations, and about 8500 8000 to 8500 that are in that underserved or unserved group. Right. So we've got similar populations of on on on on and under you and you on an underserved. The scale of doing what Patty is suggesting to do at GMP is I you know what I don't know what the factor is 10x because of the because of the line miles and the, the, you know, just the sheer reach of the geographic territory, we would have to do. And so, when we've looked at the analysis of trying to justify these costs against the energy system benefits they can deliver. At that scale it doesn't it doesn't pencil for us it doesn't work for us so. You know, again we're we're today in a position where we're trying to cause or be a catalyst for CUDs and other ISPs to do these builds and to offer cost incentives in the area that we can directly control. You know, WEC has a WEC has a different view of that. Okay. And I guess Tim, we don't have anybody from Vermont electric co op here. I'm just wondering how that, not unless they're hiding someplace now we don't mind applied to their territory. So, or a future question. Okay, thanks. Absolutely representative Pat. A couple of just pieces of information in terms of WEC involvement when I was there with the red light program and the two locations. Barry mentioned it's correct in both of those situations. In both cases where a nonprofit or community effort with huge amount of local community support it wasn't it wasn't just a small business. In both those cases, it required that the loan be completely guaranteed by by a commercial bank I believe in both in both cases. The co op in the event there have been a default that would have gone right to the rate payers. And I, I don't know their current status but I'm pretty sure that because Vermont electric co op was in bankruptcy in the 1990s, when they came out of that. And then still the rural electrification administration forbid them to from ever borrowing from them again. And I don't know if that covenant still exists but they have been using other financing other than some of the things that Washington electric co op is eligible for. But my question is in his testimony, Brian talked about the when the internet service is not is not sufficient. It means that the customer can't take advantage of certain types of load management or other kinds of that that Green Mountain Power offers. I know Washington electric co op also offers some load management programs including electric involvement electric hot water heat. And in promoting that the promotions will say condition that can one of the conditions for participating is it must have internet service. And I'm just wondering what what's experienced has been in terms of how many people, if you know, might not be participating who other otherwise would be because of connectivity issues. We're running a small pilot and peak load control devices, and I'm going to emphasize small we have less than 100 members using it. And I'll remit spot on one of the conditions that we require is that they have internet service, and they can have clunky internet service because it's a programming thing that things to their meter to say, they turn off at a particular time frame to help us control for peak. But it's very few customers a that even put their hand up to participate in that be there are limitations because of the access to internet they at least have to have, you know, the four to one megabytes per second speed. And we can work with that in terms of this the simplistic peak control that we're using in this program, but to do some of the more sophisticated things down the road like gmp is doing. Ultimately, we would have to have a high speed internet to do, you know, really more sophisticated peak load control programs. You know, we're balancing that with the fact that black members general lag behind the rest of the state just because of income disparity and our service territory is a little bit more low income so we're a lagger. The adoption rate is not as high as, you know, a more wealthy county just that's the basic premise. Ultimately, any doing any peak load control or control device programs will need high speed internet in the future so this is deployment of fiber is a futuristic infrastructure need that we will have. You know, being able to quantify it at this point is difficult, but we can say there is some new things that we can do in new program savings we could achieve down the road. I'm part of that program on a volunteer basis it's another board but I have I'm underserved I have less than a megawatt upload and but it still works with the hot water heat pump I put in. So, but if I wanted to do more. It'd be more difficult the other thing and a patty as because we're looking at time of use programs which which this will help us to offer in the future. But as you know, our average usage per member is like 450 kilowatt hours a month. People are using that little aren't necessarily rushing to do the demand side and we're also a winter peak as opposed to summer peak. But as people move off of fossil fuels on to air source heat pumps for instance that load will pick up and it'll be more beneficial for them to do it. I will just put one little comment here and that when we talked to our members about using air source heat pumps. We don't give any rebate to them if their house isn't insulated weatherized appropriately, because we don't want them to put something on that's not going to be efficient because they've got a lot of holes in the wall. So, we're trying to make sure still that we follow the thing that you and I have been involved in for so long is still to get people to use electricity wisely. When I hear this thing and I'll just this is a little off this subject but when I hear that Hummer is coming out with an electric vehicle. I say okay well how much power are they going to be using because it's, there's only so much resources we're going to have and we're going to deal with climate change, and we just can't be stupid about how we do things. So, sorry. You're going to need three roofs full of solar panels to power that Hummer. Yeah, yeah. Yeah, yeah. Okay, thanks. We have one more guest this morning, but for the chairs, good lumbar health, which is this chair, not the chair I'm sitting in although probably both. I would like to take a three minute break, literally only three minutes just so folks can stretch my time on my screens is 1038. So we're going to start back up at 1041. So if everyone could mute their device. Thank you. Thanks everybody for indulging the chair for a quick stretch there. We're getting clean up today. We have carrot Johnson, who's the VP for strategic innovation at Velco really appreciate you joining us today carrot we have been in conversation in this committee with you and and also offline with you about this issue for for months and you know Velco is doing a lot of work here so really appreciate you taking a few minutes today to fill us in on some of the things that Velco is doing and and spend a great conversation we're having and excited to have you here so welcome. Thank you Mr Chairman let me see I've been working with Matt let me see if I can call this up. And then go here. Yep, that's coming up on my screen. I'm just trying to go there. Okay thank you Mr Chairman. I thought that both Brian and Patty and excellent work. This is a little bit different right we are the. Let me just see are you seeing the front page because I have two monitors or we are we're seeing page number one it's got house energy and technology. Perfect. I think that Brian and Patty and Barry, an excellent work. I have. I'm grateful for the ability and the to work with both of them and as you say Mr Chairman we've been working quite a bit on this so let me just jump to it. Since I'm mindful of time. As I said though Velco is a different creature, we're a little bit different creature, and the nice thing is you've heard from Greenmount power the state's largest utility and Washington Electric co op one of the smaller utilities and utility of which I happen to be a member and I'm grateful for Barry and Patty's leadership. Certainly very grateful for that leadership, especially on this issue. A little bit about Velco Velco was founded in 1956. Vermont has a lot of these first thing. Another first thing is Velco, Vermont electric power company. There was a first transmission only company founded in the US. It ended because there are all these unconnected local utility. And there was an opportunity and thank you to Senator Aiken, who got some federal dollars to help states contiguous to New York gain access to significantly less expensive power that would be generated from the Dan's along the St. Lawrence. So we're able to our Genesis our founding story was help us connect to deliver renewable energy. We built a power line from the border, just outside the border Vermont into Vermont and interconnected all the there's 54 utilities at the time to connect Vermont 54 distribution utilities at the time. Right now our vision. This will be interesting if some of you have a reaction to it we're utility. But our job really is we look at it as to create a sustainable Vermont, because essentially we're utility owned by utilities and a public benefits corporation. So it's a different construct that construct is remains unique in Vermont, our primary role ensure grid reliability. If you see the responsibilities there, the local control center, fundamental blocking and tackling grid grid operation. We also develop and submit a long range transmission plan. That requirement was born out of pain and anguish. We more than quintupled our assets, a few years ago, built a very large transmission line after 20 years of not building any transmission and we happen to have built it. Along the along Lake Champlain, some of the most affluent communities in the state on the most engaged communities in the state and we upset a lot of people. Part of that was because they felt surprised. So the idea was how do we give full fair and timely consideration of non wires solution. There is no transmission utility that works harder to not put up additional iron in the ground than I would say then. But we also run the Vermont system planning committee. That group is to share what's going on transmission, but also effectively can serve as a, if not the kitchen maybe the breakfast nook of Vermont energy world. That's where we discussed and engage engages regulators, renewable energy companies, the utilities, commercial interests, community interests, all those 1617 stakeholders all around what's going on with energy so with an interesting group I can talk more about that. Then lastly we manage a regional utility issues group for the Department of Public Service. That's one of six states that comprise the New England independent system operator region, one of six states. That's pretty small we are only effective if we collaborate and unite around on a given topic and advocate that together a team Vermont approach. Our job is to help unite and try and gain consensus and then advocate that position so we work with the department to do that. If we're successful, we'd like to think we do definitely punch above our overall megawatt weight, keep going. There's been a lot of discussion about for profit not the co op structure. I can tell you we are imbued with that public interest. Fundamentally here we are a for profit company which we are, but we're organized to deliver benefits like a co op we are owned. The assets in Vermont are owned by the Vermont distribution utilities and Velco because the operating committee, excuse me operating entity for all these assets. But Velco itself is owned by the distribution utilities and the Vermont low income trust for electricity a public benefits corporation. And that public benefits corporation their job is to get a million dollars a year and their job is to name three people to serve on the Velco board, as well as to take the million dollars and advance the goals of the comprehensive energy plan. So a public benefits corporation and the leaders of the distribution utilities and like that's who sits on our board that's our governance. Our motive is how do we keep the grid reliable and how can we serve our owners, our customer owners, and how can we help create a sustainable Vermont. Effectively our mission consistent our mission and vision work, as I said, make sure no one gets hurt. First and foremost, secondly, keep the lights on keep the transmission lights on since we serve all of the state 17 distribution utility. And continue to find ways to deliver value. That includes trying to I think Brian had mentioned this. We've had a nominally flat budget for the last seven years, our headcount is stayed the same for the last nine years. That is not easy to do in this time of transformation. I know one of the most critical things we can do is not cost too much, even as we seek to get better at our job. So that's one way we do live value but we're also seeking to find ways to leverage the assets we have everything from bucket trucks to a new thing that was developed an app, an app to manage max max that we put on the ground so heavy equipment goes over to protect wetlands threatened endangered species in the life. So it runs the gamut now how we deliver value. And lastly is that policy advocacy as I talked about that's at the regional level. Sometimes that's at the state level. Sometimes it's on the national level. As in Congress when we talk about such issues as broadband. So I wanted to share Mr Chairman as you and I have talked about this is just a quick snapshot and you'll have this presentation. Let me just give some love to Matt because I think I've sent him three different presentations, since we've started as you have tripped me on some stuff I have two slides here. Fundamentally, it is so timely that this committee Mr Chairman is working on this. We have two slides here. 33 states are already doing you where utilities have a role, largely cooperatives, but not in every case are engaged in delivering broadband services and chum in some shape manner or form to their customers. 33 straight across the nation and this is not comprehensive. And that's either already happening or they're moving and they're getting after it right now. So this is absolutely something that is timely, if not overdue. So here's the second one just to give you a feel for the additional state. I just got that information this morning and again, it is a snapshot that is not represented as comprehensive but it's a very good handle of all the states and what's going on in the convergence of utility service with broadband service. A little bit about us one thing about Velcom. Generally speaking, if you're not hearing about us that means we're doing our job. Because fundamentally, if you're going to hear about usually because something not so pleasant might have happened, fundamentally we have, as I mentioned, more than quintupled our transmission assets. We have at least expanded by four fold our fiber network. We have about 1500 miles of 72 strand fiber. You see that you can see the other information there. What effectively what that does is it buys down the cost. As we reach deeper into community. It buys down the cost for other internet service providers for our distribution utility owners to pick up where that data transfer is happening and be able to drive down that cost because we're closer to them. Effectively, we also I just want to note here we have a statewide radio system for emergency purposes that enables the state 17 distribution utilities and Velcom to communicate with each other and a common communication platform again to help keep the lights on. What do we do this, we built this grid network about 10 going on 12 years ago and I should tell you Mr Chairman at the time, it was viewed as a huge risk building why would a utility build a fiber network. Certainly why would a build what a utility build a fiber network with 72 strands of capacity. That was considered in the industry, a huge over build unnecessary. However, in that time now. The CEO of ISO New England and their CEO. Gordon Van Wheely and bombs each other Lovada, respectively, have now will be coming to Velco in, I think in March, early March, because they have, they have identified that the construct Velco was put in place not only ensures better grid reliability and better data security, but it also helps address this issue on convergence, Mr Chairman your committee is going after. So, at the time it was risky 10 or 12 years ago now all the utilities are seeking to do or excuse me many utilities are seeking to do some type of data some type of fiber network. So what are we doing with ours. Well, I think, Mr. Yantoshka mentioned for my electric co op, both for my electric co op and green mount power, our fiber network is utilized for their real time operations, it's called their skater network their control room, the ability to see what's going on is because of in part because of the network they utilize our service to them to be able to make that happen. So this is in addition to doing the data backhaul for all utility. We do the data backhaul for all utilities, and there's specific use cases we do for individual utilities, as is the case with the EC and GNP that real time operation for watching electric co op we just recently completed a pretty exciting project where we showed so for watching the electric for the first time they're able to able to see in real time. Visualization of their data on some particularly just a subset a subset of their assets. So think of all the savings, or excuse me the better not better knowledge is better safety is better customer response or in this case member response at Washington electric co op. The really powerful stuff which we're just starting to do with watching electric co op, we're going to electric department they've now reached out to us and we're going to be doing data hosting for them. Data centers that will get into a little bit that we've just built. And then for Lindenville and so we've created an app for them to access the data we provide it's their data but we can visualize it for them. And such that on the both for Burke mountains and this Burke mountain and the scary is in stone, they can monitor okay here comes peak load. Let's try and drive down our use include in some cases snow guns and the like to try and drive down and do some peak load shaving, such that they can save money. Overall again that has great data security, fundamentally though, and our experience and our judgment based on what we've done. There is no true innovation without high speed, high volume, real time communication, I should and highly reliable. If you don't have the ability to move data to move information fast reliably to where it needs to go and in the format it needs to be you cannot decarbonize, can't better provide service. We have experienced that we learned that through building a fiber optic network system, the radio system with VTC and watching electric co op and our other members Vermont now has about 92 to 94% deployment of smart meters. Look was also installed a high performance computing cluster which we're starting to really tap into but frankly we're going to use some uses for that but mostly stuff is going through the cloud and we can still say secure but that's where most of the data is going. As I mentioned we've built in it. It's a crazy data center if God forbid North Korea or someone else is detonated a huge nuclear bomb over North America our one remaining structure perhaps might be the Velco data center and not sure if that's necessary but it's a impregnable data center that we've built. And lastly in case you had not known based on the collaboration of watching electric co op and green mount power and our other distribution utility owners. Along with IBM and Boston consulting group Melco Melco actually created a successful startup analytics company that was purchased by Vestas the world's largest wind turbine company for about $100 million. So that brought again additional revenues to the state. In all these cases. The fiber network that we build. 20% of that cost because we're a transmission only utility 20% of the cost is paid for by Vermonters. 80% of the costs are paid for by the regions, the rest of the New England's the other five New England states rate payer. That is because that in generally speaking reflects both the percentage of the load Vermont is at peak which is roughly 4% of peak load of New England, and the fact again that we're 100% transmission, no distribution. In addition, what's important about this is that currently Vermont is able Velco is able to capture 100% of the revenues generated by any additional work any additional initiative that utilize this fiber network. The region pays 80% of it because it's for system reliability Vermont pays 20% but by by precedent by regulatory agreement, we're able to keep 100% of the money's generated through any creative use of that that doesn't compromise system reliability that's going to change. So that 100% will drop to 30% of any monies we generate, but still, if we're paying 20% for the asset and we still keep a third of the revenues generated now be happy that's still a great opportunity. Specifically with regards to our work on broadband coverage. Probably I would say beginning in early March and they're about we really dove in and we're working to try to help work very closely with the Department of Public Service and I give Commissioner Tierney a lot of credit for her and her team, her vision and leadership on this issue. We work, I mean I got to know Michael Bernbaum and Luke Bobian and we effectively Velco's role was to connect people we were aware of an art network with people who didn't know each other, and just simply try to leverage our fiber network leverage our substation asset, where we could lend a hand. And I think we did for instance the, I think you probably read a lot about and I believe Ed McNamara might have talked about this. The, the project up in the Northeast Kingdom with Luke Bobian and Michael Bernbaum are doing with their partners that will connect about 300, 300 additional family. They're leveraging our assets to where we've effectively allowed them to have free space and leverage our work with remote public television in order to make that happen. So that's kind of the quiet behind that role seems we play for instance in that state level. There's federal funding opportunities at the current time I can't talk about most of those are the terms of working with congressional delegation to try and bring additional broadband dollars to the state. And in particular with Senator Leahy staff to try and make that happen. And again working with the State Department of Public Service to see if there's ways we can get that to come and then how might that be used. If you're ready. I guess I would say as well as yourself. And finally, if there's something that hard cold fact is whatever happens with if you pass legislation great. If we get additional federal dollars, wonderful. And regardless of that we are moving forward on our fiber reliability project to expand by between 300 and 500 miles are existing 1500 mile network. We're doing that because because the kinds of changes to the grid that we all seek I think Brian talked about decarbonization how do we accelerate that Velco's role. There are very different use cases and approaches between WEC and GMP. Our role is to build a common network that innovation platform, such that every one of our owners, every utility as equal access has a way to at their own speed given their own capital structure can avail themselves of that to advance their own particular goals. At the level though what's what the one of the major factors driving our fiber reliability project is Vermont like Hawaii and California. We're very blessed with a substantial and growing number of distributed renewable sources of generation. That's excellent. It does cause some challenges that we have to keep evolving the grid in order to keep reliable. The North American reliability corporation NERC, they're effectively the grid police. They monitor your performance and if you fail they can issue penalties and their significant million dollars a day for violation. They are now requiring they've gotten it these smaller scale distributed renewable generators have reached such scale that they impact the transmission grid the higher level transmission grid. And they're requiring utilities to have better vision, better data into their systems understand what's connected where it is and when it's on and when it's off. So for our purposes that gives us an opportunity and a requirement to expand our fiber reliability project as I said we're in the midst of designing that we informed that we actually organized. I think if it wasn't the first. Yeah, I think it might have been the first gathering of all the CUD statewide to try and get them to say here's who we are. Here's what we can do for you and we have this project that's coming. Let's see if we can collaborate. So that work is ongoing. We expect to have a design approved we would. We're hopeful to begin on that say third quarter of this year to get moving on that. Thank you Mr Chairman I just wanted to know I think it was a representative Rogers talking about her town and the like, and just to bring it back like what this is all about here. This is something that Vermont Community Foundation did read is bad in this map effectively, which committees are in the most distress and you can agree or disagree with the factors, but it's something we're aware of and I think Brian might have mentioned. The community is in real distress, and it does largely in some instances track with among the things that it tracks with or coincides with lack of ability lack of broadband connectivity. This is the kind of stuff we look at to say how are we being as creative as possible to keep our costs down and keeps our creative juices flow. That's something Mr Chairman I just wanted to share because this is something that's front and center and our leadership team for the people working on convergent on in terms of delivering broadband, ensuring system reliability and a host of other kind of innovative things. And with that, I'll stop and glad to answer question. That was a great character that was terrific. And a great, you know, a great segue through the different presentations this morning, and you tied it together as our transmission utility does as a state tie a lot of this together. We've got one hand up right now. Representative and touch got did you have a question. Yeah. So, don't go as you said as a transmission utility, your fiber problem. You don't have polls per se that that this that CUDs or any other ISP ISPs would be attaching to right. So your, your fiber is going only to other distribution utilities like what GMP and so forth. Yeah, effectively it goes to our transmission substations. Excuse me all of our transmission substations as well as connecting a host of our statewide radio sites. The project we're talking about. I'm sorry, go ahead. Okay, so I was going to ask how, how does a distribution utility like WEC or GMP or bell. From an electric co op, take advantage of the fiber that you're providing and the sub transmission sites that we connect to as they have connections there because it is sub transmission because it started to be stepped down to the voltage levels of the distribution levels need to. So there's various points of connection where transmission meets distribution, and that's how they, they get connected. And this project we're talking about now that's underway. And again driven by a number of factors including these emerging your standards is such that will be looked like will be connected to an additional 400 distribution substation. Plus key storage sites, assets on the grid that make a difference that we need vision into so it'll be a whole another spate of connection will be closer to them for more direct communication. And this WEC they're built the reason why we have the ability to do the work we're doing with WEC right now is because that connection, we have connection points to them, whether it's a sub transmission system, or a, we're down to their distribution system. They're effectively that's where they're connected. Okay, so how does that tie into fiber to the premises. Well, it wouldn't be directly involved in that, but would a utility like WEC connecting to your network, would that serve in some indirect way for fiber to their premises. In fact, you're absolutely we don't. Our line of jurisdiction clearly ends at that where the distribution level starts, we don't get into last mile where you can't really touch our polls were effectively the limited access superhighway. And if you can get on to us, then you get out to the world. That's our kind of role. So again, the closer we get that closer the on ramp to this data superhighway is to where the distribution utility needs to be the lower the cost easier it is connect the distribution utility has different, as you've heard in case of different constructs, or how they're going to get from that point of connection to the last mile whether they build or they issue an RFP or at someone else build our job is to get as get that superhighway as deep into the community as possible, drive down the cross and increase system reliability. Okay, and then my last question has doesn't have to do a broadband at all but one of your slides said the one with the circle on it. That your EMP protected your your just your data centers are EMP protected which is electromagnetic pulse protected and what kind of protection see you actually have how was that protected. It's, it is a, there's only one data center that is. See, I'm like the worst person that I'll answer the question the worst person asked I said what the hell are we doing. So it is a data effectively in this concrete box that has this beyond rebar that's and Dan our vice president for technology but effectively it's a data center that has all kinds of production built into the wall that's further on a cement in case with specific types of rebar in that that's located at the plant so it is what I call six, six levels of protection that's around it. So again, you're in there you'll survive a nuclear attack. I don't know if you'll answer the door if someone knocks but it's there but that's the only, the only data center that is mostly protected represented the untouched. Yeah. Not apart from nuclear attacks of solar flares are also a source of electromagnetic, electromagnetic pulse. You're absolutely right and I understand that we just entered the latest 11 years cycle for those things so I'm with you. Just, that's a bigger problems and that was that was just personal curiosity. Okay, thank you. You're welcome. So, I will give the, I don't see any other hands up signal in case anyone else has a question, but I just want to wrap this up with a thank you for our four guests. This was really helpful to me and I hope members of the committee because, as Kara could said, Green Mountain Power and Washington Electric Co-op are very different. Electric utilities in our state, but also very focused on broadband broadband deployment and acceleration of that rollout because it helps what they do in serving their customers and I think that's a really important point. And we've been pretty focused from a reliability standpoint from a resilience standpoint from a cost saving standpoint from a carbon reduction standpoint we can go on and on here. And we've been pretty focused on some of the discrete advantages of broadband and recent weeks, this kind of brings us into another sector which is extremely important and obviously also part of our, you know, part of the world that this is the energy world, which is the energy world. So I really appreciate that and Kara kind of drawing this together as to how this connects from a transmission utility standpoint as well. And then the other thing that I want to note is an appreciation for a couple of policy initiatives that have been brought to our attention by Green Mountain Power and by WECC as well. And I think that we might consider as part of a broadband bill again that we're going to start working on next week and, you know, push into February I've had conversations with the speaker about what her expectations are in terms of how quickly we might bring bring something to the floor of the house on this there's, there's a lot of interest from members across the state on this particular issue so this was really helpful in tying some of this together. And just one other general comment I want to bring to the committee's attention. Yesterday, I had mentioned that for tomorrow's discussion in committee. We were going to have a discussion on budget adjustment and the climate council, Secretary Moore had brought information to our attention yesterday. And I have discussion tomorrow 15 minutes after the floor. So I think we're going to have a brief floor session in the morning. I think it starts at 930. I don't expect that there will go, you know, much more than a half an hour, although I haven't, I don't know what's on the calendar at this point but we're going to have that discussion about budget adjustment 15 minutes after the floor tomorrow. And then we're going to have our afternoon session I think, but I'm, I don't know how long that will go, but again 15 minutes after the floor and then in the afternoon we have a 130 hearing that is going to be the second half of our master's degree process from the Department of Public Service on energy programs and the state renewable energy services, standard offer, net metering, all those fun things. So that's going to start at 130 just to give members kind of situational awareness as to what we're going to be doing tomorrow. So any comments from the committee or questions or anything else before we wrap up for today. Don't see a chair. Yeah, go ahead Laura. So I would just like to echo thanks to our utilities for for digging in here and really thinking about how we can innovate. I think that particular Velco, both Carrick and his predecessor, you know, a predecessor have been engaged in this conversation for a number of years really trying to help folks around the state. Think about how do we get this job done so I think that that that public thinking with all of us about getting this job done is is really appreciated. Thank you.