HARDWICK – At its May 26 meeting, The Hardwick Electric Department Board Commissioners covered power supply budgeting, risk reduction and resource diversification, emphasizing load forecasting accuracy, hedging ratios and renewable standards. Further discussion of Federal Energy Regulatory Commission (FERC) standards for return of equity (ROE), as well as grant awards for smart meters, hydro project surveys and land ownership issues.
HED management and the commissioners are focusing on prudent financial management, risk mitigation, infrastructure modernization and regulatory readiness.
Moving forward, next steps were discussed with contract negotiations, property surveys and exploring energy storage options, with an ongoing focus on financial and operational risk management.
Vermont Public Power Supply (VPPSA) General Manager Ken Nolan and VPPSA Manager of Power Resources Heather D’Arcy,staff attended the meeting to discuss power supply planning and other issues.
HED General Manager Johnstone began by noting the HED budgeting process has been different from other VPPSA members suggested the board and VPPSA open discussions to understand why and if VPPSA should be altering the metrics used to budget for Hardwick.
After hearing from the commissioners, Nolan said the review and adjustment piece of the process had been missing from the HED process in the past and the budgets and load forecasts seem to have been completed without major insight into Hardwick’s customers for adjustment factors. This is an ongoing focus for VPPSA, said Nolan, in reminding the board it’s important to be consistent with load forecasting and revenue projections, which is a separate element to power supply.
The bulk of the meeting involved commissioners learning about the VPPSA budgeting process allowing HED to leverage VPPSA’s expertise for power supply projections and budgeting, ensuring access to specialized knowledge and industry best-practices. The approach emphasizes hedging 95-100% of the load forecast, reducing exposure to volatile market prices and minimizing financial risk.
Further analysis analyzes usage down to individual major customers, allowing for more tailored and accurate forecasting.
Several commissioners noted a risk of overbudgeting if state or regional growth trends are applied to Hardwick without considering local realities.
VPPSA said there is an emphasis on using historical KWH data and avoiding overbudgeting based on unrealistic growth trends, which helps prevent financial shortfalls.
Going forward, the budgeting process will become more collaborative, with regular touchpoints between the HED and VPPS power supply team, and a commitment to early and ongoing review of projections.
These adjustments to the collaboration between HED and VPPSA will overcome issues with past practices that lacked sufficient review and adjustment, sometimes missing local factors and leading to less accurate forecasts.
The commission is still in the process of upgrading to advanced metering infrastructure (AMI) and improving data collection, which means some decisions may be based on incomplete or delayed information until more is learned from the improvements by analyzing customer data..
This balanced approach with greater collaboration will help HED is expected to help Hardwick Electric manage risk and improve forecasting accuracy, but it also requires ongoing attention to local factors, technology upgrades, and regulatory shifts, commissions and VPPSA staff agreed.
Hardwick Electric is planning for Vermont’s RES requirements, which mandate 100% renewable energy by 2035, including specific targets for Tier II and Tier IV resources. The utility is managing its REC (Renewable Energy Credit) bank and seeking future contracts to meet these obligations.
In other matters, the commission approved consolidating short-term expense notes for better cash flow management and discussed grant funding for smart meter deployment.
Commissioners approved executing award documents to accept congressionally directed spending through Senator Sanders intended to cover costs associated with smart meter deployment for $132,746.64. The grant award will reimburse labor costs related to the installation, testing, commissioning and documentation of new smart meters for work done between May 1 and December 31, 2026.
At a recent Hardwick Select Board meeting Controller Renae DiGregorio reported HED office staff and field crews have been working on the installation of system infrastructure necessary to support a new smart metering metering system.
Customer implementation is expected to begin in the fall and HED will provide advance notice to customers prior to meter installation.
Additional discussion involved the ongoing HED investment in hydro facility repairs and property surveys to support infrastructure reliability and regulatory compliance.
Commissioners met again Tuesday, June 16.
Paul Fixx is editor of The Hardwick Gazette and lives in Hardwick.
