Updated at 5:33 p.m.
State regulators have cleared the way for GlobalFoundries, the Essex Junction semiconductor manufacturer, to set up its own electric utility — allowing the company to buy most of its power directly from ISO New England, the regional grid operator, rather than from Green Mountain Power.
The decision by the Vermont Public Utility Commission came two months after a longtime opponent of the project, the Conservation Law Foundation, announced an agreement with GlobalFoundries that resolved earlier concerns about whether the company would comply with certain environmental and tax obligations.
GlobalFoundries announced Friday it had received a certificate of public good from the Public Utility Commission approving formation of GF Power LLC, a utility wholly owned by the company that would supply electricity to the Essex Junction plant.
“GF is pleased with the PUC's decision to issue the (certificate) approving the formation of our electric utility, which will assist GF in making our Essex Junction site more globally competitive,” said Ken McAvey, GlobalFoundries vice president and general manager of the Essex Junction plant, in a statement.
GlobalFoundries is Green Mountain Power’s biggest customer. To offset the loss, GlobalFoundries plans to continue buying electricity from Green Mountain Power over a four-year transition period, and will also pay the electric utility a “transition” fee of $15.6 million.
While GlobalFoundries will continue to buy electricity exclusively from Green Mountain Power during that time, it will be free to generate its own power as well, according to Jeffrey Cram, senior manager and deputy director of facilities engineering at the company’s Essex Junction plant.
Under its agreement with the Conservation Law Foundation, GlobalFoundries committed to build a 5-megawatt solar facility in Essex Junction and to comply with Vermont’s environmental laws — in particular, the state’s renewable energy standard, which requires utilities to obtain more and more of their electricity from renewable sources.
“This agreement makes sure that GlobalFoundries does its part to reduce climate pollution, advance energy efficiency, and transition to clean, renewable energy,” said Elena Mihaly, vice president of Conservation Law Foundation Vermont, in a statement.
The solar plant would provide a fraction of the 381.2 million kilowatt-hours the Essex Junction factory consumes annually. That’s 8% of all electricity used in Vermont.
Cram said the company is exploring the potential to generate more than 5 megawatts of electricity at the solar plant.
The Vermont Chamber of Commerce welcomed the decision as good for business.
“This type of regulatory innovation will lead to increased investment and modernization in the GF Vermont semiconductor facility in Essex (Junction), ensuring a continued commitment to our state,” said Betsy Bishop, president of the Chamber, in a statement.
GlobalFoundries also agreed to pay taxes on the electricity it buys from its own utility. Those taxes help fund Vermont’s program to weatherize homes of people with low incomes.
GlobalFoundries pays significantly more for electricity in Vermont than it does in New York, where the company is based. In 2021, the Essex Junction plant paid 9.1 cents per kilowatt-hour for electricity, compared with the 6.3 cents per KWh it paid at its Fishkill, New York, plant and 5 cents per KWh in Malta, New York.
Cram said electricity accounts for about half of the cost of operating the Essex Junction fabrication plant.
“It’s very important for us to be able to manage that cost ourselves,” he said.
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October 25, 2022 at 12:34AM
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