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Laying the Foundationfor the Future2020 ANNUAL REPORT
Contents1VPPSA 2020 ANNUAL REPORT12A MESSAGE FROM THE CHAIRAND GENERAL MANAGER33ABOUT VPPSA55BOARD & STAFF6RESPONDING TO THECOVID-19 PANDEMIC688TECHNOLOGY UPGRADES1010VPPSA’S EVOLVING ROLE1212FINANCIAL STATEMENTS1313PROJECT OPERATIONSLAYING THE FOUNDATION FOR THE FUTURE
Never before have we seen changeoccurring in the power and utilityindustry at the pace it is transformingtoday. Electric generation is becomingincreasingly renewable as policymakers enactstatute to protect the environment and reducecarbon emissions. The arrival of innovativeelectrification technologies onto the marketplaceis reshaping how utility customers consumeenergy. Electric utilities are no longer required tosimply supply power and maintain the poles andwires; they play an essential role in promotingenvironmental policy and managing the localgrid as new demand crops up alongside distributed generation.A Message fromthe Chair andGeneral ManagerKen NolanVPPSA General ManagerReginald Beliveau Jr.Chair of the BoardJoint action agencies around the country arestepping up to help their member utilities navigate this changing utility landscape, and VermontPublic Power Supply Authority (VPPSA) is no exception. VPPSA has always supplied its memberswith affordable wholesale power and essentialservices. But those efforts have stayed mostlyin the background focused on supporting utilitystaff. Now, that centralized role is expanding toinclude more direct contact with retail customers,as well as providing management support offield operations. The accelerating regulatoryrequirements designed to address climatechange, coupled with ever increasing consumerexpectations, and an aging workforce are puttingmore pressure on small municipal utilities thanthey have ever before experienced. Joint actionagencies like VPPSA are increasingly providingaccess to programs and partnerships that enableeach utility to keep stride with these changeswhile operating efficiently and cost-effectively.VPPSA 2020 ANNUAL REPORT2If those challenges weren’t enough, 2020 alsorequired a complete rethinking of how to operatefor both VPPSA and its member utilities dueto the novel Coronavirus pandemic. On FridayMarch 13, the VPPSA staff went home withinstructions to work from home until furthernotice. As of December 31, 2020 staff was stillwaiting for that notice to return to the office. Evenso, as the report will demonstrate, VPPSA wasable to adapt and move nearly all of its strategicpriorities forward. VPPSA staff deserves enormous credit for maintaining focus on the utilitiesand consumers they support during an extremelytrying time.In 2020, VPPSA rolled out multiple new serviceofferings to the benefit of its members and theircustomers. In the face of a global pandemic,VPPSA took proactive steps to advocate formember interests, provide financial support,and implement technology that was necessaryto ensure our members’ economic success. Wesimultaneously focused on moving forwardbroader strategic technology upgrades such ascentralized GIS mapping and advanced metering infrastructure. We continued to developaffordable renewable generation, bringingthe members’ aggregate electric portfolio to60% renewable and 90% carbon free. We alsotook the first steps in addressing the workforceshortage concerns member utilities face bybeginning to assist with office and field operations management.Despite 2020 presenting numerous challenges,VPPSA took significant steps to ensure ourpublic power utilities will continue to thrive. Ourevolving role allows us to focus on laying thefoundation for the future.LAYING THE FOUNDATION FOR THE FUTURE
AboutVPPSAOver four decades ago, Vermont’smunicipal utility leaders recognizedthat they would benefit from a support network to deliver exceptionalservice to their communities. In 1979,the Vermont General Assembly enacted statute to create the VermontPublic Power Supply Authority. Sincethen, VPPSA has been providing community-owned utilities with beneficialconsolidated services and solutionswhile allowing each municipality tomaintain its individual identity.Today, VPPSA serves 11 Vermont municipal electric utilities. Individually,VPPSA member utilities serve anywhere from 600 to 6,000 customers.Combined, the customer base addsup to nearly 30,000.VPPSA’s services include power supply purchasing, generation operation,information technology support,cybersecurity support, financial andrates planning, legislative and regulatory representation, GIS mapping,and customer outreach.VPPSA 2020 ANNUAL REPORT3LAYING THE FOUNDATION FOR THE FUTURE
Our MembersBarton VillageVillage of LyndonvilleVillage of Enosburg FallsVillage of MorrisvilleTown of HardwickTown of NorthfieldVillage of JacksonvilleVillage of OrleansVillage of JohnsonSwanton VillageVillage of LudlowMISSIONTo deliver exceptional value to community-ownedutilities by advocating, educating, collaborating, andproviding guidance through the changing economic,technological, and regulatory landscapeVISIONTo promote, advance, and celebrate public powercommunities in Vermont and beyondVPPSA 2020 ANNUAL REPORT4LAYING THE FOUNDATION FOR THE FUTURE
Board of DirectorsOfficersReginald Beliveau Jr.Meredith DolanCrystal CurrierJohn Morley IIIThomas PetraskaAmy ParahBill HumphreyLynn ParadisChair, Swanton VillageVice Chair, Village ofOrleansJonathan ElwellVillage of Enosburg FallsMike SullivanTown of HardwickPamela MooreVillage of JacksonvilleVillage of JohnsonVillage of LudlowVillage of LyndonvilleSecretaryAssistant SecretaryTreasurerPenny JonesMorrisville Water & LightStephen FitzhughTown of NorthfieldVPPSA StaffMelissa BaileySteve FarmanJoshua BancroftDavid GagneProject 10 Plant OperatorAccountant andAdministrative AssistantCrystal CurrierKim HarrisAmanda SimardHeather D’ArcyJulia LeopoldKen St. AmourShawn EnterlineAlex NicholsonManager of Governmentand Member RelationsApplication DeveloperVPPSA’sControllerBoard & StaffVPPSA 2020 ANNUAL REPORTPower AnalystSenior Power Analyst5Manager of Planning andSupport ServicesSystems AdministratorCommunications SpecialistGIS TechnicianLAYING THE FOUNDATION FOR THE FUTUREKenneth NolanGeneral ManagerAmy ParahSenior AnalystManager of Technology andSecurity Services
RESPONDING TO THECOVID-19PandemicIn early 2020, a novel coronavirus began its rapidspread and plunged the globe into an unprecedented public health and economic crisis. Asbillions of people were urged to stay home,VPPSA took quick action to transition to remoteoperations. Effective March 16, 2020, all staffwere instructed to stay home and were affordedthe opportunity to work flexible hours to care forchildren that were home from school.Smooth TransitionVPPSA was well prepared for this overnighttransition given the framework of technologyalready in place. Staff could access companyfiles from home through a virtual private networkand scheduled meetings could continue usingan existing video conference platform. Thechange to an all-remote operation occurred overa single weekend and without any significantissues. VPPSA continued its remote operationsfor the remainder of 2020 with one staff memberin-office each day.Information Technology UpgradesThe quick transition to remote operations highlighted VPPSA’s earlier prioritization of creatinga mobile workforce. Staff members were alreadyequipped with laptops with access to companyfiles via a virtual private network. The existingvoice over internet phone system, RingCentral ,allowed for seamless call forwarding andprovided the ability to conduct meetings viavideoconference.The COVID-19 pandemic has prompted somemember utilities to explore new technologicalefficiencies. Several utilities are considering adding voice over internetphone systems similarto the one VPPSA hasThe quick transition to remote operationsin place.highlighted VPPSA’s earlier prioritizationElectric Loadof creating a mobile workforce.The Technology andSecurity Servicesdepartment quicklyjumped into actionto ensure memberutilities were experiencing the samesmooth transition. The department was able toremotely connect utility staff to their files usingthe same gateway firewall appliances as VPPSA,enabling some utilities to send their workforcehome for weeks at a time.VPPSA 2020 ANNUAL REPORT6DeclineAs Vermont businesses shut down in accordance with Governor PhilScott’s Stay Safe, Stay at Home orders, VPPSAmember utilities began to feel the financial pangsof electric demand reduction. Several memberLAYING THE FOUNDATION FOR THE FUTURE6
utilities provide a sizable portion of electricservice to large businesses and were thereforeparticularly vulnerable to losses.The economy within the Village of Ludlow, forexample, typically thrives on tourism generatedby visiting skiers. Okemo Mountain Resort, thelargest customer of community-owned LudlowElectric Light Department, has a large snowmaking capability that is partially powered byelectricity. In April 2020, Ludlow Electric LightDepartment experienced a 22.2% overall reduction in electricity use largely due to the resort’searly closure.The hardest hit VPPSAmember municipalWithin the first few weeks of the stayelectric utility was theat home order, VPPSA began to outlineVillage of Orleans.a plan to expand its line of credit andLocated in the heartamend financial policies to assist memberof the Northeastutilities. A credit expansion to 10 millionKingdom, Orleansis home to the onlywas finalized in June 2020, enough forEthan Allen furniturea worst-case-scenario of covering allmanufacturing plant inmembers’ power bills for three months.the country. On March25, Ethan Allen sent275 Vermont workershome as it temporarily closed its doors. As aThankfully, these proactive steps coupled withresult, the Village of Orleans electric departmentstabilizing economic conditions provided enoughexperienced a whopping 43.2% decrease in loadsupport to avoid a dire outcome.as compared with April 2019.VPPSA took quick action to assist its membersthrough the financial repercussions of loaddecline. Within the first few weeks of the stayat home order, VPPSA began to outline a planto expand its line of credit and amend financialpolicies to assist member utilities. A credit expansion to 10 million was finalized in June 2020,enough for a worst-case-scenario of covering allmembers’ power bills for three months. Updatesto VPPSA’s financial policies allowed membersto defer paying VPPSA bills if necessary andsubstantially decreased finance fees.Customer Assistance Advocacyoutreach efforts. VPPSA began informing stateregulators and legislators about the effects itsmembers were experiencing.VPPSA worked bothdirectly with Vermont’s Congressional delegationand in conjunction with the Northeast PublicPower Association and American Public PowerAssociation to advocate for federal supportto cover past-due balances for strugglingcustomers.On March 18, 2020, the Vermont Public UtilityCommission swiftly ordered a moratorium onutility disconnections due to nonpayment of bills.This prompted VPPSA to ramp up its legislativeThat advocacy culminated in the establishmentof an 8 million statewide fund to assist customers with overdue payments. 419,311.34 ofthe Vermont COVID-19 Arrearage AssistanceProgram was applied to VPPSA member utilitycustomers’ past-due bills.The COVID-19 pandemic placed an economicburden on Vermont’s households as many wereleft jobless. In April 2020, the statewide unemployment rate was 15.6%, up from 3.1% in March2020.VPPSA 2020 ANNUAL REPORT7LAYING THE FOUNDATION FOR THE FUTURE
mPower Integrator software providesVPPSA and memberutilities with visualizations and data tocost-effectivelymanage assets.TechnologyUpgradesDuring 2019 strategic planning sessions, the VPPSA Board of Directorsrequested an enhanced focus oncentralized technology services. Inresponse, VPPSA implemented severalnew technology offerings in 2020 andprogressed projects that were alreadyunderway. 2020 represented a significant year in building the technologyfoundation needed to react to therapidly changing utility environment.Advanced Metering InfrastructureThe business case for upgrading VPPSA memberutilities to advanced metering infrastructure(AMI) specifies a whole host of efficienciesfor both the utility and the customer. AMI canincrease customer satisfaction by providingtimely outage-related communication, fewer billdisputes, and quick access to usage and costinformation. Hourly data from AMI provides aswath of advantages to the utility. Utilities canuse data to make decisions about grid assets, liketransformer sizing, and customer service programs, like time-of-use rates. Overall, AMI aids inpower quality and reliability of service.VPPSA continued to lay a foundation for rollingout a radio frequency based AMI network acrossall member utilities. All member systems willutilize one centralized meter data platform thatVPPSA will assist in managing. In 2020, a team ofrepresentatives from member utilities and VPPSAmanagers selected an AMI vendor finalist. Projectdesign and contracting is underway with meterinstallation expected by early 2022.VPPSA 2020 ANNUAL REPORT8Geographic Information SystemMappingVPPSA took major steps forward in developingcentralized geographic information system (GIS)utility mapping. A new 2020 service offering,centralized GIS mapping maximizes efficienciesby standardizing data across member utilitiesand reducing the amount of time each utility willneed to spend maintaining their map data. Itadditionally allows VPPSA to develop analyticsand field applications that will enable memberutilities to proactively manage their assets.The VPPSA GIS program kicked off withhiring a GIS Technician to join the Technologyand Security Services Department. The GISTechnician worked with each utility to collectexisting data and plan for further data collectionwhere needed. Three categories of GIS maturitywere identified across the membership, and aplan was developed to advance each group’sstatus such that all of VPPSA’s members will haveconsistent capabilities.LAYING THE FOUNDATION FOR THE FUTURE
VPPSA then entered a partnership with mPowerInnovations to bring affordable mapping anddata analytics to member utilities. The partnership provides VPPSA members access to mPowerIntegrator software, which allows GIS mapsto be connected to other utility data such asAMI meter readings or billing records to enablegeospatially-based load analysis, voltage analysis, interconnection studies, and other insightsinto energy use trends. VPPSA members can alsouse the IntegratorTM software for field activitiesincluding cost-effectively managing utility assets,preventative maintenance, vegetation management, and outage tracking and analysis.Cybersecurity Service Offering2020 was a cybersecurity turning point for manyindustries around the globe as nefarious digitalattacks threatened to hold organizations hostageand utility regulators at the state and federallevel increased focus on cybersecurity. VPPSAhas spent several years improving its own security posture, but the perceived vulnerability ofutilities across the country became an area of increased concern for VPPSA’s Board of Directors.In 2020, VPPSA proposed an expansion of thecyber defenses it had deployed internally to themembership as a whole. As a result, The Boardof Directors agreed to make cyber security acentral offering in VPPSA’s operations and theTechnology and Security Services Departmentbegan working with vendors to enhance themember utilities’ cyber readiness.VPPSA is using a combinationof mPower Integrator andArcMap software to maputility assets.Utility-Scale Battery StorageVPPSA members remain committed to keepingcosts low for their community members. Recentforecasts indicate that transmission priceswill continue to rise significantly over the nextdecade, leading to increased costs for VPPSAmember utilities. In an effort to reduce costs associated with transmission fees, VPPSA has takenproactive steps to establish a new partnership todeploy utility-scale battery storage.In October 2020, VPPSA released a request forproposals (RFP) for electric storage facilitiesin VPPSA member territories. Finalists werenarrowed down at the end of the year with thesecond round of the selection process takingplace during 2021.VPPSA 2020 ANNUAL REPORT9LAYING THE FOUNDATION FOR THE FUTURE
“This project was proof that wheneveryone works together with acommon goal, we can do amazingthings in a short amount of time,”said Morley. “We will feel thebenefits of this project for manyyears to come.”VPPSA’sStrengthening PartnershipsEvolving RoleUtility Management and FieldOperationsVPPSA Board of Directors identified successionplanning as a priority during 2019 strategicplanning sessions, which led VPPSA to exploreoptions to assist with utility management. Earlyin 2020, VPPSA contracted with a field servicesmanagement consultant to provide on-call fieldsupport. The consultant provides project management support for VPPSA capital projects andis able to work with individual utilities as-needed.Renewable GenerationVPPSA’s partnership with Encore RenewableEnergy brought a new solar project online in late2020. Lawrence Brook Solar is a 2.2 MW solararray located in Morrisville on land previouslyused for corn silage. The 25 year lease agreement provides income to Morrisville residentand landowner, Jeanette Davis, and generatesenough renewable energy to power 450 homes.“Our mission is to keep electric rates affordablefor our community,” said Morrisville Water & LightGeneral Manager Penny Jones. “Our customerscan take pride knowing their electricity is comingfrom increasingly renewable resources withprices remaining low and stable.”This is the second solar array to be energizedunder the VPPSA and Encore Renewable Energypublic-private partnership. VPPSA and Encorehave arranged to build a 10 MW solar portfoliotogether, accounting for 16% of VPPSA memberutilities’ peak demand. Solar projects will be sitedacross multiple VPPSA member utility territories.VPPSA 2020 ANNUAL REPORT10VPPSA and Efficiency Vermont collaboratedon numerous successful projects and laid thegroundwork for future partnership. VPPSAadvocated for the Village of Orleans’ inclusionin an Efficiency Vermont program that providesefficiency upgrades to Vermont’s communities.Efficiency Vermont provided the village witha 4,000 incentive bonus, which was used toupgrade the wastewater treatment facility.“This project was proof that when everyoneworks together with a common goal, we can doamazing things in a short amount of time,” saidMorley. “We will feel the benefits of this projectfor many years to come.”In an effort to bring similar benefits back to moreVPPSA members, VPPSA and Efficiency Vermontentered a three-year agreement to conductefficiency programs tailored to the utility territory’s needs. The agreement commits EfficiencyVermont to return 47% of energy efficiency fundsraised in VPPSA member communities in theform of incentives. Additionally, it forms a commitment for both VPPSA and Efficiency Vermontto a research and development project.LAYING THE FOUNDATION FOR THE FUTURE
Key AccountsOver the last several decades, Vermont utilitieshave experienced flat or declining loads.Meanwhile, in 2015 the state legislature introduced statute requiring utilities to participatein energy transformation projects that decreasecustomer fossil fuel use. VPPSA recognized earlyon that initiating electrification projects withcommercial and industrial utility customers couldboth combat load decline and meet statutoryrequirements at the lowest cost possible.Additionally, strengthened relationships withlarge customers could provide economic development opportunities for the communities wherethey are located.VPPSA took its first steps in developing a KeyAccounts program that will benefit both the customer and the utility. Select staff began trainingthrough an American Public Power Associationcertificate program, and a consultant was hiredto lead the program development process.From left to right: Village Manager John Morley III(Village of Orleans), Representative Johanna Donovan(Chittenden-6-5), and VPPSA General Manager Ken NolanVPPSA’S ELECTRIC GENERATION PROFILE6090%VPPSA anticipates launching its fully developedKey Accounts program in 2021.%renewableCustom Energy TransformationProjectsVPPSA members can tout an electric generationprofile that is 60% renewable and 90% carbonfree. Customers that switch from fossil fuel toelectricity reduce greenhouse gas emissions andsave on their energy bills due to the affordableelectricity many VPPSA members offer. VPPSAremains committed to encouraging energytransformation projects and provides incentivesto customers who choose electric over fossil fuel.Two commercial and industrial customerscompleted energy transformation projects withfinancial assistance from VPPSA members. A furniture manufacturer offset 41,666 annual gallonsof diesel by completing a transformer upgradecarbon freewith Lyndonville Electric Department. LyndonvilleElectric Department provided a financial incentive to cover a significant portion of the projectcost. Similarly, a maple sugaring operation inBarton chose to connect to the grid rather thanuse diesel generators for sap collection from its12,000 taps. Barton Electric provided 20% of thecost of the line extension, eliminating the needfor 2,330 annual gallons of diesel.Legislative AdvocacyPrior to the COVID-19 pandemic, VPPSA staff wasenthusiastically face-to-face with state legislatorson a near daily basis. In February 2020 VPPSAwas thrilled to host its first Legislative Receptionin decades, during which member utility managers had the opportunity to interact with theirVPPSA 2020 ANNUAL REPORT11Vermont legislatures, VPPSA Board of Directors, and VPPSAstaff gather at the VPPSA Legislative Reception.local senators and representatives and discussmatters of utmost importance to their utility.The rapidly spreading novel coronavirus createda quick shift in legislative operation and prioritiesin late March. As legislators learned to conductcommittee meetings virtually and federal fundingrolled in to assist Vermonters affected by theeconomic crisis, energy legislation becamerightfully less urgent.Rather than holding meetings in person, VPPSAmet virtually with senators and representativesfrom its utility territories to discuss a bill proposalto allow for more municipal ratemaking flexibility.The proposed bill includes the ability for publicpower utilities to make small adjustments torates through its local governing bodies whilemaintaining statewide oversight. This wouldprovide significantly reduced administrativecosts to utilities, and therefore lower costs forutility customers.Senator Ann Cummings volunteered to sponsorVPPSA’s bill and introduce it to the SenateFinance Committee during the 2021 legislativesession.LAYING THE FOUNDATION FOR THE FUTURE
2020 CondensedFinancialResultsA complete copy of VPPSA’s audited financialreports can be found at: https://vppsa.com/about-vppsa/ financial-reports20202019Net Capital Assets 15,057,025 15,920,689Current Assets, including cashand cash equivalents, accountsreceivable, and other assets 18,979,302 18,922,541Long-term assets, including investments 34,557,453 36,234,706 25,000 25,000 68,618,780 71,102,936 8,235,420 10,239,072 26,302,080 29,162,655 25,000 70,605Total Liabilities and deferredInflows of Resources 34,562,500 39,472,332Invested in Capital Assets, Net 1,660,359 1,340,689 27,648,731 25,792,070 4,747,223 4,531,181 (32) (33,336) 34,056,280 31,630,604 68,618,780 71,102,936Deferred outflow of resourcesTotal Assets and DeferredOutflow of ResourcesCurrent Liabilities, including accountspayable, short-term debt, currentportion of bonds and LTDLong-term liabilities, includingbonds and long-term debtDeferred inflow of resourcesRestricted EarningsUnRestricted EarningsOther Comprehensive IncomeTotal Retained EarningsTotal Liabilities and CapitalVPPSA 2020 ANNUAL REPORT12LAYING THE FOUNDATION FOR THE FUTURE
il StationProjectOperationsVPPSA owns 19% of the J.C. McNeil GeneratingFacility, located in Burlington. The McNeil Stationis managed by Burlington Electric Department,which is the majority owner. Additionally, VPPSAowns 100% of the Project 10 peaking generatingfacility, located in Swanton. This is a “fast-start”generator within the ISO-NE wholesale market,allowing New England power grid operators toquickly dispatch generation to keep the powergrid stable.51.9%72.0%20190.12%99%2020Project 100.08%VPPSA 2020 ANNUAL REPORT100%132019LAYING THE FOUNDATION FOR THE FUTURE
VPPSA 2020 ANNUAL REPORT14LAYING THE FOUNDATION FOR THE FUTURE
P.O. Box 1265195 Waterbury-Stowe Rd.Waterbury Center, VT 05677802.244.7678www.vppsa.com
port network to deliver exceptional service to their communities. In 1979, . RingCentral , allowed for seamless call forwarding and provided the ability to conduct meetings via videoconference. The Technology and Security Services department quickly jumped into action to ensure member utilities were expe-riencing the same smooth transition. The department was able to remotely connect .
