Many power companies are installing many new power lines as they rely more on renewable energy and try to make grids more resilient to bad weather. But a Vermont utility company is proposing a very different approach: It wants to install batteries in most homes to ensure its customers never lose power.
The company, Green Mountain Power, proposed purchasing batteries, burying power lines and reinforcing overhead wires in a filing with state regulators on Monday. He said his plan would be cheaper than building many new power lines and plants.
The plan marks a big change from the way U.S. utilities typically do business. Most of them make money by building and operating power lines that supply electricity from natural gas plants or wind and solar farms to homes and businesses. Green Mountain, a relatively small utility that serves 270,000 homes and businesses, would continue to use that infrastructure but build less by investing in TV-sized batteries that homeowners typically purchase on their own.
“Call us non-public service,” said Mari McClure, Green Mountain’s chief executive, in an interview before the company’s presentation. “We are completely changing the model, decentralizing it.”
Like many places, Vermont has been hit hard this year by extreme weather conditions related to climate change. Half a dozen severe storms, including major flooding in July, have caused power outages and damage to homes and other buildings.
Those calamities and concerns about the rising cost of electricity helped shape the Green Mountain proposal, McClure said. As the company crunched the numbers, it realized that paying reclamation costs and building more power lines to improve its system would cost much more and take much longer than equipping homes with batteries.
Green Mountain’s plan builds on a program it has run since 2015 to lease Tesla home batteries to customers. Its filing asks the Vermont Public Utilities Commission to authorize it to initially spend $280 million to strengthen its grid and purchase batteries, which will come from several manufacturers.
The company expects to invest approximately $1.5 billion over the next seven years, money that it would recover through electricity rates. The utility said the investment was justified by the growing sum it had to spend on storm recovery and pruning and removing trees around its power lines.
The utility said it would continue to offer battery leases to customers who want them sooner. It will take until 2030 for the company to install batteries in most homes under its new plan, if regulators approve it. Green Mountain says its goal of eliminating power outages will be reached that year, meaning customers will always have enough electricity to run lights, refrigerators and other essential items.
“We don’t want our customers to have their power cut off forever,” Ms McClure said. “People’s lives are at stake. Ultimately, that’s why we’re doing what we’re trying to do.”
Green Mountain would control the batteries, allowing it to program them to absorb energy when wind turbines and solar panels were producing a large amount. Then, when demand peaked on a hot summer day, say, the batteries could release electricity.
Under the proposal, the company would initially focus on delivering batteries to its most vulnerable customers, placing some power lines underground and installing stronger cables to prevent falling trees from causing outages.
Hurricanes, winter storms and wildfires have highlighted the increasing vulnerability of power grids in recent years. For many people, they have also reinforced the importance of quickly abandoning fossil fuels, the main cause of climate change.
Utilities are spending tens of billions of dollars to strengthen grids and shift to cleaner forms of energy, often with the help of federal and state incentives.
But industry critics say utilities are not being particularly innovative in investing in their systems. Utilities are spending big on new long-distance power lines that can take years or even decades to build due to environmental reviews and local opposition.
TO may report by Brattle Group, a Boston-based research firm, concluded that utilities could save up to $35 billion a year by investing in smaller-scale energy projects, such as home batteries and rooftop solar panels, which can be build easier and faster.
Green Mountain’s proposal appears to recognize that reality, said Leah Stokes, an associate professor of environmental policy at the University of California, Santa Barbara. “It really is the model, especially if you’re worried about power outages,” she said. “He could really become an example for the rest of the country.”
McClure said the high cost of large-scale energy projects threatened to drive up electric rates so much that many customers could struggle to pay for power.
Electricity customers in New England pay about $270 a month, on average, for a home that uses 1,000 kilowatt-hours of electricity, compared to the national average of about $160, according to the Energy Information Administration. That’s the third highest rate in the country, behind Hawaii and California. Vermont rates are the lowest in New England, but are still 29 percent above the national average.
Electricity rates across the country have risen about 25 percent over the past five years and are expected to continue rising sharply as utilities look to strengthen the grid and build new renewable energy projects.
Emily Fisher, executive vice president of clean energy and general counsel at the Edison Electric Institute, a utility trade organization, said Green Mountain’s proposal aligns with industry-wide discussions about ways to respond to climate change and the results of the Extreme weather.
“I think it’s innovative,” Ms. Fisher said. “I don’t see it as a change in the business model but as a way to take advantage of it. You will have to demonstrate that it has benefits for the entire system.”
Power outages cost utilities in the United States about $150 billion a year, according to analysts at Sprott, an investment firm. And modernizing America’s power grids could cost “trillions of dollars,” according to Sprott’s estimates.
In addition to the roughly $20 million to $25 million Green Mountain spends each year managing trees and other vegetation around its power lines, the utility said, it spent about $55 million on storm recovery this year. It spent an average of less than $10 million a year after the storms between 2015 and 2022.
Those types of storm recovery costs can increase rates by up to 7 percent over time because the utility is allowed to recoup that expense from ratepayers.
“If you run a utility anywhere in the country, you have to take the path to stopping the madness, regarding rates,” McClure said.
