Deal Provides Ongoing Value to GF, Protects Manufacturing Jobs in Vermont, and Ensures Cost-effective and Reliable Power to all GMP Customers
11 September 2018
COLCHESTER, Vt. – Green Mountain Power (GMP) today announced a multi-year agreement with GlobalFoundries (GF) to provide the Essex-based chip manufacturer, formerly IBM, with more stable energy costs. The plan is subject to regulatory review and approval.
GMP provides among the lowest cost energy in New England, but regional power costs outside of GMP’s control are still significantly higher than in neighboring New York, which operates through a different grid system. These costs increase expenses for many organizations, including GF which has operations in both states. To support a long-term future in Vermont, it is critical for high-tech manufacturers such as GF to secure a more competitive and predictable cost structure for energy. Green Mountain Power and other state partners have worked together for years to support IBM and now GF in their continued operations in Vermont.
“This agreement is great news for GF and great news for Vermont because it provides stability and predictability for the company, while ensuring our customers continue to receive cost-effective and highly reliable energy,” said Mary Powell, President and CEO of Green Mountain Power. “The positive economic impact of GF’s presence in Vermont is significant, and we feel strongly that we, along with our state partners, should continue to do what is reasonable and responsible to support keeping these important manufacturing jobs here in Vermont.”
GF employs approximately 2,500 in Vermont and is GMP’s only Transmission Class customer, which means it does not utilize GMP’s distribution grid used by all other customers. Instead, GF invests in and maintains its own distribution grid at its Essex location. The agreement between GMP and GF lowers GF’s rate by 2.73 percent as recommended in rate design, beginning January 1, 2019 and freezes that through September 30, 2022 giving them the predictability and stability they need. In exchange, GF agrees to maintain its power use on site, and forgo credits or rate cuts flowing to other GMP customers during this time, including the significant tax reform credits of over $27 million that GMP will return to customers next year. GMP and GF also agree to work together to draw more business to the unused part of the GF campus to further strengthen the economy, and to promote new energy use onsite with controllable load, and providing additional value for customers.
“We face global competition from facilities that pay significantly less for electricity than we do in Vermont,” said Dale Miller, GF Vermont senior location executive. “As the state’s largest manufacturer, we consume more electricity than any other single customer and energy costs are determinant of the competitiveness of our operations in Vermont. Vermont’s energy policy and GF’s ability to purchase competitive energy in the State will factor into future investment decisions. We greatly appreciate the efforts of the state, economic development leaders and GMP to support our Vermont facility, and will continue to work with them to strive for competitive energy costs in Vermont.”
“This is a great example of teamwork to support an important employer in our state,” said Lisa Ventriss, President and CEO of the Vermont Business Roundtable. “As we look to new and creative ways to encourage businesses, especially manufacturing, we must find solutions like this to address areas where we are not as competitive with our neighbors. This is truly a global economy and businesses have choices.”
“GlobalFoundries provides thousands of good-paying jobs and has been a great employer for decades. We appreciate the hard work to support its ongoing success,” said Representatives Linda Myers (R – Essex Town) and Dylan Giambatista (D – Essex Junction) in a joint statement.
The plan is subject to review and approval from state regulators and if approved, would begin January 1, 2019.
About Green Mountain Power
Green Mountain Power (GMP) serves approximately 265,000 residential and business customers in Vermont and is partnering with them to improve lives and transform communities. GMP is focused on a new way of doing business to meet the needs of customers with integrated energy services that help people use less energy and save money, while continuing to generate clean, cost-effective and reliable power in Vermont. GMP was the only utility named to Fast Company’s 2018 list of Most Innovative Companies for Energy and is the first utility in the world to get a B Corp certification, meeting rigorous social, environmental, accountability and transparency standards and committing to use business as a force for good. J.D. Power’s 2018 rankings also put GMP among top utilities for customer satisfaction.
Kristin Kelly, Green Mountain Power