 Hello and welcome to the Burlington Mayor's Show for the month of October 2021 and thanks for tuning in again. It's great to be in the studio, second month in a row, we've been in the studio after a long hiatus and I'm joined today by our general manager for the Burlington Electric Department, Darren Springer. And the reason Darren is on with me is we are talking about what we're calling the Net Zero Revenue Bond, which is one of the two items that is now before Burlington voters for approval in a special election that is already underway. It's the ballots, if you're a registered Burlington voter, there's a very good chance that you got in the mail yesterday or in the next couple of days, a ballot that has two questions on it. One is about a general obligation bond, which is what we talked about on the Burlington Mayor's Show last month and so if you want to see a whole deep dive into that, go to the archives here for a town meeting television and you can find that show. What we're going to talk about tonight is the other ballot question, which is about this Net Zero Energy Revenue Bond, it is a $20 million item, it is an item that from my perspective represents a huge step towards the goal we've established of becoming perhaps America's first Net Zero Energy community by 2030 and what that means is that we would essentially not be burning any fossil fuels for the electricity in this community, for ground transportation and for the heating and cooling of our buildings and it's a very ambitious goal about twice as ambitious as President Biden's goal for the country to get to 50% by 2030 and yet it is one that we so far in the almost two years that we've had this goal we've been doing pretty well on. This, we're not running victory laps on this yet though and that we have a long way to go to get to this goal and we have many changes within our community that are going to be necessary to do it. This bond is an important step towards getting there so that's what we're talking about. Why don't I hand it over to you Darren, you could give a little bit of the background and then we'll get into some of the details of the bond itself. Great, well thanks Mayor, thanks for having me on the show and we're excited at Burlington Electric about the opportunity here with the Revenue Bond. As you mentioned, very few communities are taking on a goal this ambitious in the country and we need to be able to finance the improvements that are needed for the grid and for customers to be able to make the changes from a technology standpoint to be able to move in the direction that we want to move and the Revenue Bond is a first foundational step for us in making that happen. So we're excited about it, we do have some slides that we can run through. Yeah, why don't we pull up the slides before we just want to see there's the column number 862-3966, not sure if that's still going to be visible once we put up the slides but we're ready to take your questions about this or anything else in municipal government but let's dive into the slides. Excellent, so we'll pull those up here just a moment and here we go. So Net Zero Energy, just first slide here, just a little bit about Burlington Electric for folks who may not be familiar, we are Burlington's public power utility, over a hundred years old, over a hundred employees, 118 including the McNeil wood chip plant, third largest utility in the state and we are 100% renewable since 2014 and we actually went 12 years without a rate increase, coming out of the pandemic we had our first rate increase in 12 years. So moving forward to the Revenue Bond, a few basics on the bond itself, we have the authority here to move forward based on the Burlington Charter and the general bond resolution, this requires approval of a majority of voters in Burlington and it's payable solely from Burlington electric rates and revenues, it's not a city general fund obligation, it doesn't impact on property taxes, does not affect the city's debt policy or debt ratio and it's a strategy we've used a number of times in the past including. Let's not let that go by without making the point which is a really important point about this bond is it's not even going to affect your electric rates, this one very much. Well that's right, when we think about the bond we have a strategy to repay it that is going to help in the future and it actually is going to reduce upward pressure on rates in the near term while we invest, I'll touch on that in a couple slides as well but it's an important point, this is a fiscally responsible path here that we're trying to put forward. Awesome, didn't mean to take you out of the stream here but just it says this is unlike I think most people when they have their head they're being asked to vote on a bond there's some form of sacrifice that's usually being asked, I mean generally there's a relationship between when the schools come forward or the city for general obligation bonds there is an increase in taxes associated with it. This revenue bond we're really hopeful as Darren's going to explain is it's different, it to some degrees pays for itself, we're also essentially reusing revenues from refinance debt so the impact is actually positive initially as Darren just said and modest over time but I'll let you get back to it. Oh that's right yeah we'll jump to that in a couple slides. Just want to let folks know that we have a really great history of using the revenue bond financing tool including for energy efficiency back in 1990 we had an 11.3 million dollar bond for efficiency that was foundational and currently we're using less electricity today than we were in 1989 as a result of that bond and further investments that were made over the subsequent decades so there's precedent for using this strategy and we're hopeful that the net zero bond will be similarly foundational for our climate strategy going forward. So it's a 20 million dollar proposal what does it go into? About 12.3 million would go into the electric grid for reliability improvements and to accommodate new uses such as new electric vehicles and heat pumps and other electrification technologies about 3.9 million in technology systems to replace aging software and to help us design new rates and new strategies to help customers save money. 2.2 million into our renewable generation facilities and plants like the Winooski-1 hydro facility and also to convert our our peaker plant to run on renewable biodiesel instead of oil and then 1.5 million that would go into net zero capital investments like new EV charging stations in the community. The other exciting piece of this is we are going to use under this strategy a portion of our annual bond funding to double the funding for our customer incentives that are currently available and really try to ramp up adoption of these different technologies by doing that we can actually keep our green stimulus program going we can save or reduce 47,000 tons of emissions lifetime compared to business as usual which is equivalent to about 100,000 barrels of oil and we can do this in a sense to accelerate our progress on climate above and beyond where we would otherwise be. This chart just shows the dark blue line here that we really saw a significant jump in the middle of 2020 with our green stimulus we've had 1,400 customers of Burlington Electric take advantage of our strategic electrification incentives for lawnmowers for heat pumps for EVs and e-bikes and all other technologies and we actually tripled our state target last year and we're on track to do more than our state target again this year so our Burlington Electric customers are taking part in these activities and there's good reason to try to increase the funding to support our customers in that regard so these last couple of slides touch on the point that the mayor just made if we want to invest in reliability and climate progress and do so while maintaining our financial metrics with the revenue bond we would see a significant reduction in upward rate pressure using fiscal 23 as an example compared to without the revenue bond so in the near term we're actually reduce upward rate pressure for customers by utilizing the revenue bond as a financing tool over the long run as the mayor mentioned we have the ability to capture some savings from an existing repayment that will expire in 2025 and capture revenues from these different projects we've been talking about with EVs and heat pumps such that we can cover repayment in large part of the revenue bond debt service through these two strategies and put very minimal pressure on rates for ratepayers let's talk about that revenue piece a little bit just because I think it's a really interesting part of what we're trying to do here and one that I think is to agree people have questions about this I think it's you know it's sometimes misunderstood you know we have been offering these significant incentives green stimulus incentives and occasionally you get a question of like you know generally I got to see the public reaction this has been very positive and people are excited about them and many brawlentonians hundreds of brawlentonians now have used one one of these incentives or another whether it's a big one like the heat pump incentives or a lot of people start out with the most popular one is the lawnmowers right it was the heat pump is now overtaking it it has all right well that's great to hear so um the I think to some people these look like kind of government handouts these sort of subsidies and I think really the image people should have in their mind about these is it's essentially like the hotel that is going to have or airline that's going to have empty seats or hotel that's going to have empty beds for the night and to and has an asset has that they can secure a revenue for if they change the pricing of it essentially um we have this capacity uh to of electricity that goes untapped for especially off peak uh electricity um we these incentives are really I think a sound business decision on the part of BED that create that um creates more revenues flowing to to the department that every time someone takes advantage of one of these incentives whether it's a lawnmower or a or a heat pump there is a significant new revenue stream that is uh the person is going to be that household is going to be using electricity instead of gasoline and natural gas which has these environmental benefits has these financial benefits to BED of generating new revenues and this this net zero energy plan is only possible it will result in something like a 60% increase in revenues flowing to uh to the to the to the utility one successful right that's right um what we're talking about is using the electric grid to really help get rid of fossil fuel use in the heating and transportation sectors uh switching folks from fossil fuels like gasoline in their vehicles over to an electric vehicle or over to electric heating and we have capacity to do that in an inexpensive way uh use the electric vehicles an example if you're on our our charging rate and your residential customer you can charge for roughly the equivalent of 60 cents a gallon overnight when we have cheaper electricity uh compared to three four dollars at the pump so it's a hundred percent renewable it's local uh as opposed to your gasoline which is coming in from out of state or in some cases out of the country uh we're keeping more dollars here in the community and we're helping people save money so it's definitely a business case strategy uh for the utility and the customer uh that makes this work and some of these economics actually play out in this bond is just to reiterate the point the these green incentives will result in new revenues flowing to the utility that that increase in revenues will help pay off this bond and actually in a way that is unusual in bonding it somewhat pays for itself that's right we're projecting that 40 percent of the repayment of the debt is going to be coming from revenues from these different strategic electrification projects which is significant and uh it speaks to the business case of making these investments so the numbers still up there if people are interested in calling in 862-3766 um and again happy to answer any questions about this bond the other bond in the special election or anything else um that is on your mind did you have more on the presentation Darren or have we pretty much I think we we wrap that up and uh that presentation is available online as well um at the various mpa's we've presented we have it on each of the mpa websites and the city council website as well can you say a little bit more about um why upgrades to the grid are necessary to fulfill this vision and what this allows us to do absolutely so um when we think about adding new loads uh we can move some of them off peak like we talked about with electric vehicles but over time we will want to add to the grid so that we have capacity for everybody who needs to and wants to switch to heat pumps and EVs to have the capacity to do so we did some analysis as part of our integrated resource plan that we submit to the public utility commission every three years looking at what the grid upgrades would be and this revenue bond is funding the first tranche of those upgrades what we found is we need to make an investment of about uh 20 million dollars over a period of years to move our grid up to about 102 megawatts of capacity from today where we're about 80 megawatts of capacity um but speaking to the business case what we found is the new revenues from the different electrification projects will more than pay for those upgrades and in fact uh moving in this direction compared to business as usual there's about a 50 reduction in upward rate pressure by moving towards net zero so significant benefit for our customers um what we're talking about doing is switching a lot of energy use over to electricity so we want the grid to be as strong resilient and capable of delivering that for everybody and keep the reliability as strong as it's been Burlington average customer sees an outage per year and the duration is typically under an hour which is uh really extraordinary uh and speaks to the work of our our line crews and our dispatch team but also uh we've under grounded a lot of infrastructure and hardened a lot of infrastructure as well great um how how does this what we're trying to do here fit in with any of the national conversation um sometimes I get this question with the general obligation bond and we're trying to do there's you know there's this infrastructure bill that's uh out there that um we're hoping it's going to pass soon and uh could provide some additional you know significant additional funding to municipalities how do you do you see anything about that infrastructure bill impacting in the Burlington Electric Department um yes in a good way um I think there are different funding opportunities with the federal bill uh there's going to be perhaps additional dollars for EV charging uh for the electric grid incentives for customers to move in this direction as well potentially and so even though we're making some investments here that are critical that we need to move forward with if the federal legislation comes as well we'll be able to make more progress more quickly and I think you spoke to it earlier we have a very ambitious goal uh it's very hard to make this amount of progress by 2030 that's why many of the time frames are really focused on 2050 uh so moving quickly we need as much funding uh from the federal government that we can get and policy support as well let's just since uh we got a little a few more minutes here not not we're getting towards the end of show but let's talk a little bit more about um just this vision of strategic electrification and how significant this is I think it's something that still hasn't completely said in um in the sort of general public about that this is to a very large degree the solution to the climate emergency maybe 70% I think is of the climate emergency could be addressed uh through strategic electrification you kind of see it makes to me it makes sort of visceral sense when you think about what we're trying to do here I mean this roadmap essentially has all of the vehicles in the city switching from these gas burning vehicles to electric vehicles but within the decade seemed pretty outlandish when we kind of said this was the goal in 2019 it seems a lot less so now I would say like this is where the world is moving clearly with you know Tesla becoming the most valuable car company in the world with General Motors saying they're going to be all electric by but they're but you know by 2035 right like so we are really trying to push this quicker and um and then similarly on the building side you can see that you know if we pulled this off you can see how this would make a great impact wait what do you think are um do you think we're going to do this you think we're you think this this is where society's going yes absolutely I think you've seen the automakers are making those commitments driven by policy change and consumer change the renewable energy Vermont conference just finished up the keynote speaker this year was Saul Griffith whose entire strategy is the electrify everything strategy essentially we need to have the cleanest grid possible and we need to move as many uses off of fossil fuels and to the grid so we're seeing it we're seeing it in the heating sector and elsewhere too the cleanest grid is a really interesting thing and this is another reminder how special Burlington is like the big fight at the national level is they're not there there there's a big battle on how quickly the grid is going to become powered by renewables right and and what is the current stat it's like 25 currently or something like that yeah renewables and nuclear are roughly around 20 each roughly uh with natural gas and coal still making up the majority of our our nation's generating capacity the nation has 60% of the way to go still easily easily and we're we're at 100% we're 100% renewable so we are in a sense a as as one legislator that I know thinks of it a postcard from the future and and we are trying to blaze a path that the rest of the country will be following hopefully in the very near future as well one big part of that mix locally really a significant part of why we were able to get to be the first city in the country to get to 100% is because of the McNeil biomass facility the sustainably managed facility where are we on then 30 seconds on the district energy system to close out here district energy we're in phase three of feasibility work this is a project that's been talked about for decades I think we're closer than ever to making it happen and we're hopeful over the next couple of months maybe early next year at the latest we'll be able to report something to the public about our progress and move that project forward that will be big news when we have it there thank you all for tuning in great to great talking with you come back in November we'll be back with another edition of the Burlington mayor's show look for your ballot please consider voting yes on both items have a good night everyone