COLCHESTER/ESSEX JUNCTION -- GLOBALFOUNDRIES (GF) has received a large boost of backing in having its Essex Junction manufacturing site become its own private utility in the coming years.
On Wednesday, Green Mountain Power (GMP) announced an agreement that supports GF’s petition to the Public Utility Commission to become a self-managed utility at Fab 9 -- its location in Chittenden County -- starting in 2023. If approved, GMP says GLOBALFOUNDRIES would directly manage its own transmission connections, distribution system, and power supply costs according to its own goals, needs, and operational standards.
The agreement aims to strengthen GF’s position in Vermont and its nearly 2,200 manufacturing jobs while also helping to protect all other GMP customers from rising costs. The plan is subject to regulatory review and approval.
A loss of power usage by GF -- the largest electricity customer in Vermont by more than double -- could negatively impact all Vermont electricity customers. The proposal to become a private utility is designed to provide a lasting solution that would help the manufacturer manage its own costs and risks in line with its other manufacturing facilities in the U.S. and worldwide. It would also allow GMP and the Vermont Electric Power Company (VELCO), the state’s transmission provider, to minimize any impact on the rest of Vermont.
“We appreciate the close collaboration with GMP and VELCO on this important initiative, which will help GF conduct business more affordably in Vermont,” said Pradip Singh, vice president and general manager of GF Fab 9. “As the state’s largest private manufacturer, GF consumes more electricity than any other single customer of GMP, and this agreement allows us to remain globally competitive by positioning GF for future investments in equipment and personnel.”
If approved to become its own private utility, GF would turn into the third-largest utility in Vermont behind GMP and Vermont Electric Cooperative. Because of its size, GLOBALFOUNDRIES has been the only customer in the state in the “transmission class” of electricity service -- meaning it takes service at a higher voltage than all other customers in addition to owning, maintaining, and investing in its own transmission and distribution system -- for years.
“We know the tremendous value GF provides to the Vermont economy, and that’s why we’re supporting this collaborative solution to help strengthen GF’s Vermont operations while protecting our other customers from cost impacts,” said Mari McClure, president and CEO of GMP. “For decades, we’ve worked closely with IBM and now GF to ensure they can thrive in Vermont with competitively priced power. No other customer comes close to the size and energy load of GF, so we’ve used innovative models and existing regulatory guidelines that recognize the uniqueness of this facility.”
GMP says the agreement announced on Wednesday protects customers from economic impacts through a four-year transition period -- during which time Green Mountain Power will supply GF’s electricity needs through a power purchase agreement. GLOBALFOUNDRIES will also pay a $15.6 million transition fee to benefit GMP customers by offsetting most of the costs associated with the transition.
Following the transition period, GF will be served directly by VELCO and will also establish a $700,000 fund for VELCO to manage any transmission cost changes to other utilities due to GF becoming its own. According to GMP, GLOBALFOUNDRIES will continue its corporate and site-specific renewable and carbon-free energy purchases planning -- as well as continue and expand energy efficiency investments at the facility which have been significant over the years -- during the transition period.
“This proposed change makes important strides to meet the unique needs of GF, which plays a critical role in Vermont’s economy,” said Lisa Ventriss, president of Vermont Business Roundtable. “Kudos to GMP and GF for their work to reach an agreement that will give the company greater control over its energy portfolio and to stay competitive in the global markets in which they operate. At the same time, this proposal importantly aims to serve GMP’s remaining residential and business customers by creating greater certainty and stability, which is so important to Vermont’s economic recovery from the pandemic.”
The details of the proposal filed with Vermont Public Utility Commission will also be in the regulatory section of GMP’s website.