- Vermont’s Green Mountain Power is proposing to supply battery backup in homes rather than building a lot of expensive transmission lines and power plants, which could cost more and take longer to build.
- Transmission lines are needed due to the renewable energy push, which also requires expensive backup power to ensure customers receive electricity 24/7.
- Consumers will end up paying more to keep the power on regardless of the ultimate decision, as renewable energy is intermittent and weather driven, requiring backup power.
The Biden administration’s push toward renewable energy (mainly, solar and wind power) requires new power lines as the best resources for solar and wind are not located near demand centers. Rather than build massive transmission lines, a Vermont utility is proposing to install batteries at homes so that households will receive electricity even if the sun is not shining and the wind is not blowing. Vermont’s Green Mountain Power is planning to buy television-size batteries, bury power lines and strengthen overhead cables in a proposed filing with state regulators, believing its plan to decentralize would be cheaper than building a lot of new lines and power plants.
Utilities generally make money by building and operating power lines that deliver electricity from power plants to homes and businesses. In the Biden administration’s energy transition, utilities are spending tens of billions of dollars on switching to renewable energy and building transmission lines, often backed by federal and state incentives. The long-distance power lines can take years or even decades to build due to environmental reviews and local opposition.
According to the Green Mountain Power plan, the utility, which serves 270,000 homes and businesses, would still need to use that basic infrastructure but expects to build less of it, substituting home batteries, instead. Outages resulting from storms and floods and concerns about the rising cost of electricity has made Green Mountain realize that paying recovery costs and building more power lines to improve its system would cost more and take longer than simply equipping homes with batteries. The company would initially focus on delivering batteries to its most vulnerable customers, putting some power lines underground and installing stronger cables to prevent falling trees from causing outages.
Green Mountain’s plan builds on a program it operated since 2015 to lease Tesla home batteries to customers. In its filing, it requested the Vermont Public Utility Commission to authorize initially spending $280 million to strengthen its grid and buy batteries, which will come from various manufacturers. The company expects to invest an estimated $1.5 billion over the next seven years — money that it would recoup through electricity rates. The utility said the investment was justified by the growing amount it had to spend on storm recovery and to trim and remove trees around its power lines. It will take until 2030 for the company to install batteries at most homes after regulators approve its plan. In the meantime, the utility would continue offering battery leases to customers who want them sooner.
Green Mountain would control the batteries, allowing the batteries to absorb the energy when wind turbines and solar panels were producing more energy than demanded at the time. Then, when demand peaked and wind and solar power were not producing, the batteries would release the stored electricity.
A May report by the Brattle Group, a research firm based in Boston, concluded that utilities could save up to $35 billion a year if they invested in smaller-scale energy projects like home batteries and rooftop solar panels that can be built more easily and installed quickly. Residential electricity rates nationwide increased about 25 percent in the last five years and are expected to continue to increase sharply as utilities are forced to build new renewable energy projects and add lines to the grid. Electricity customers in New England pay about $270 a month, on average, for a home that uses 1,000 kilowatt-hours of electricity, compared with the national average of about $160. New England’s electricity rates are the third-highest in the country, behind Hawaii and California. Vermont’s rates are the lowest in New England but still about 29 percent above the national average.
Power outages cost utilities in the United States about $150 billion a year, and modernizing U.S. electric grids due to the renewable push could cost “well into the trillions of dollars.” In addition to the roughly $20 million to $25 million that Green Mountain spends each year on managing trees and other vegetation around its power lines, it spent about $55 million on storm recovery this year—much higher than the than $10 million a year it spent on average on storm recovery between 2015 and 2022. Storm recovery costs can increase rates by as much as 7 percent over time as utilities are allowed to recoup that spending from ratepayers.
Conclusion
Electricity rates are increasing due to the Biden administration’s energy transition to wind and solar power that require massive transmission lines and backup power. Utilities are looking for ways to decentralize and lower costs as rates will continue to increase as the transition progresses. Green Mountain Power in Vermont has proposed to use small, television-size batteries in homes rather than install the massive and expensive infrastructure. The batteries will store excess wind and solar power and release the energy when demanded and wind and solar are no longer meeting demand as they require sun and wind that are driven by the weather. Whether this is a feasible and reliable plan is yet to be determined.
