Mayor Weinberger and Burlington Electric Department Propose Net Zero Energy Revenue Bond

Mayor Miro Weinberger and Burlington Electric Department (BED) have proposed a new, $20 million Net Zero Energy Revenue Bond that would accelerate progress toward Burlington’s bold climate goals, while reducing upward rate pressure for BED customers. In addition, the Mayor and BED announced that BED’s Green Stimulus program would continue, and that Moody’s Investors Service affirmed BED’s A3 rating.

“The urgent need to reduce emissions through electrification is clear, and Burlington’s 2030 Net Zero Energy goal is one of the most ambitious local climate goals in the nation,” stated Mayor Miro Weinberger. “This Net Zero Energy Revenue Bond provides a fiscally responsible path to invest in a more resilient and reliable utility and to aggressively advance climate action in Burlington, while saving ratepayers money compared to an alternative scenario without the bond.”

The Net Zero Energy Revenue Bond, combined with a portion of BED’s annual General Obligation (GO) Bond, would make numerous investments, including:

• $17.5 million to support projects that help advance progress toward the Net Zero Energy goal.
• $7.8 million to fund grid upgrades that support reliability and manage new loads from strategic electrification.
• Renewable energy generation plant maintenance and upgrades.
• Investment in electric vehicle charging and demand response infrastructure.
• Upgrades to technology systems to support new dynamic rates and load control.

The Net Zero Energy Revenue Bond would reduce future rate pressure significantly for BED customers relative to a scenario where BED made the above-mentioned investments without the bond. Debt service on the Revenue Bond proposal and that portion of the GO Bond used for strategic electrification would be supported by:

• Net revenue from strategic electrification projects between FY23 and FY25 that will contribute approximately 40 percent of BED’s obligation over the 20-year debt service life of the bonds.
• Savings of $684,000 of BED’s debt service starting in FY26, due to the maturity of existing bond debt.

Additionally, under a new Vermont Public Utility Commission (PUC) order approving a BED proposal, the utility will double funding at least through the end of fiscal year 2025 (FY25) for strategic electrification, including continuing its Green Stimulus program. The doubling of funding would be supported by approximately $5.3 million from BED’s annual GO Bond. This will:

• Reduce fossil fuel use through customer incentives for heat pumps, EVs, electric lawn care equipment, electric bikes, and more.
• Avoid over 47,000 tons emissions, equivalent to nearly 100,000 barrels of oil burned, compared to business as usual.

Further, Moody’s Investors Service affirmed BED’s A3 rating on outstanding revenue bonds on August 16, 2021, with a stable outlook. Moody’s cited BED’s 100 percent renewable power supply, the diverse local economy in Burlington, and recent action to adjust rates for the first time in 12 years as positive indicators.

“Just as we led nationally in 1990 with an innovative energy efficiency revenue bond that jump-started progress on reducing energy use, Burlington Electric Department is proud to present this innovative Net Zero Energy Revenue Bond proposal which, combined with the continuation of our Green Stimulus program, constitutes a groundbreaking effort to scale up programs that help our customers switch from fossil fuel to 100 percent renewable electric technologies, such as cold-climate heat pumps and electric vehicles,” stated Darren Springer, BED General Manager. “The affirmation by Moody’s of BED’s A3 rating is a welcome development as we bring forward the proposal for the Net Zero Energy Revenue Bond. I want to thank our customers, the Burlington Electric Commission, the Mayor and City Council, and the entire BED team, who share in this accomplishment.”

“The Burlington Electric Commission supported the Net Zero Energy Revenue Bond proposal as a means to spur action toward our Net Zero Energy goal in a way that reduces future upward rate pressure,” stated Gabrielle Stebbins, Chair of the Burlington Electric Commission. “The Commission has kept focus on the need to take meaningful climate action steps as a community, and to do so while ensuring that BED maintains strong financial metrics. We are pleased to see the affirmation of BED’s A3 rating from Moody’s as the community considers this Net Zero Energy Revenue Bond proposal.”

“Our IBEW Local 300 sisters and brothers appreciate the foresight of Mayor Weinberger, BED’s management team, and the Burlington Electric Commission that has led to the Net Zero Energy Revenue Bond proposal that will help keep our infrastructure strong and our generating stations current, while supporting quality jobs for union workers as we make progress along the path to Net Zero Energy” stated James “Duke” Dutra, BED’s Chief Union Steward for IBEW Local 300, to which approximately two-thirds of BED’s workers belong.

Among the first of its kind nationwide, the Net Zero Energy Revenue Bond proposal was recommended by the Burlington Electric Commission by a 5-0 vote. The Board of Finance and City Council will consider the proposal for placement on the November ballot at their September 13 meetings.

Please see attached documents:

• Net Zero Energy Revenue Bond proposal memorandum
• Net Zero Energy Revenue Bond proposed project list