Is GlobalFoundries Too Big To Deny?

They probably call this a campus”

It may not be “an offer you can’t refuse,” but GlobalFoundries has done its best to put state government over a barrel on electricity costs. Vermont’s largest private-sector employer wants to cut ties with Green Mountain Power and form its own utility. It would buy its power on the regional wholesale market.

If it gets its way, the utility would not be subject to Vermont’s renewable energy standards or a variety of other laws and regulations. This isn’t a little thing; GF accounts for 8% of Vermont’s electricity consumption. If GF gets its way, we’d have a harder time reaching our greenhouse gas reduction targets.

Unless, ha ha ha, it voluntarily complies. Ha.

The case was filed last spring before the Public Utilities Commission and got a flurry of media attention at the time. Since then, it has followed the PUC’s customarily meandering process with filing after memo after legal brief after rejoinder. But things are about to heat up. And there are any number of indications that the Scott administration is in the bag for the GF petition.

Which is no surprise, since underlying all of this is GF’s persistent, non-specific rumblings about competitiveness and costs and well, wouldn’t it be a shame if something happened to your big shiny employer?

Various petitioners have weighed in against the plan including the Conservation Law Foundation, Renewable Energy Vermont, and AllEarth Renewables, the renewable-energy company headed by David Blittersdorf. They make a compelling argument that there’s nothing in state law to allow for such an independent utility. Therefore, they say, the PUC has no grounds to even consider the proposal.

As far as I can tell, neither GF nor any of its supporters has even tried to address this issue. They’re just pushing forward with the plan, state law be damned.

(If you’re a big fan of legalese, you can read all the documents on the PUC’s website.)

Until recently, the PUC had planned to hold hearings on the GF petition in mid-October,. preceding any effort to decide the jurisdictional issue. Which seems backwards, does it not? If state law doesn’t allow the PUC to grant the petition, then why spend time discussing it?

Well, the Department of Public Service doesn’t agree. It has proposed a delay in the proceedings, but only by about one month. It still wants the hearing to go forward before any consideration of the fundamental jurisdictional issue.

Let’s back up a bit. This petition is controversial in environmental circles because it would allow GF to exempt itself from the state’s efforts to fight climate change. Maybe this fact worried GF and state officials, because in August they produced a “letter of intent” that, as one document puts it, “outlines the commitments that [GF] plans to make related to emissions reductions.”

Please note that there is absolutely nothing binding. GF merely indicates that it “plans” to make undisclosed “commitments” to reducing greenhouse gases.

This LOI was agreed to by the Agency of Natural Resources and the Public Service Department. The Agency of Commerce and Community Development has also weighed in on GF’s behalf. It would be easy to interpret this nonbinding letter as a handy bit of greenwashing. GF wants to fight climate change, it really does; it just wants to save money in the process.

This LOI is supposed to lead to a more formal Memorandum of Understanding that should be set to go by the end of October. Which, again, on the PUC’s original schedule, would have been revealed after the hearings on GF’s petition.

The Public Service Department has defended its fast-track approach, making multiple references to the need for “timely resolution.” Why? Well, GMP has to file a rate request in January. PSD argues that the utility needs to know GF’s status in order to accurately file its rate case.

Now, the PSD is supposed to be the public’s advocate in PUC cases. Its interpretation of “the best interest of ratepayers” is, wait for it, “a timely resolution of this case.” Yeah, sure. The most likely “benefit” for ratepayers is higher electric bills.

AllEarth responded to this blather by pointing out that GF has been considering this move for years, and that the timing of the case “was uniquely in the control of the respective Petitioners,” meaning GF and its administration allies.

AER went on: “A schedule premised on evidentiary hearings before jurisdiction is resolved… does not well serve the [Public Service] Commission, the remaining parties to these cases, or the citizens of Vermont.”

Seems logical to me. Unless the skids are pre-greased for this sweetheart deal, it would make all the sense in the world to settle jurisdiction before considering the proposal. But it would be awfully inconvenient if it turned out that GF’s opponents were right about the law. That would kill the plan right then and there.

If worst came to worst from GF’s point of view and this plan were sidelined on the law, its backup plan would presumably be to seek legislation allowing private utilities. If it came to that, you’d expect the administration to support the idea.

Would the Democrats, who are so devoted to fighting climate change? Well… the departure of GF would blow a king-sized hole in the economy of Chittenden County, an area represented almost entirely by Democrats. Would they be willing to call GF’s bluff?

One more data point. In this proceeding, GF is represented by none other than former House speaker Shap Smith. I’m not accusing him of pulling levers or bending elbows, but his presence in GF’s corner certainly wouldn’t hurt their case before the Legislature.

GF has a lot of heavy hitters in its corner, plus that handy bit of employment blackmail. It sure looks as though GF is too big to deny.

3 thoughts on “Is GlobalFoundries Too Big To Deny?

  1. Grumpy

    All industries in Vermont are subsidizing ratepayers, putting them at a disadvantage in the greater competitive landscape which brings a great deal to support Vermont’s economy. If you drive them out of state your economy shrinks exponentially.

    Reply
    1. John S. Walters Post author

      Or, you might say the ratepayers are subsidizing industry. If not by making possible a broad-based utility system, then by paying the freight for roads, highways, police, a justice system, firefighting, EMS, and an educational system to crank out new workers. Etc.

      Reply

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