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PUC Ruling: Burlington District Heating System Would Not Need State Permit

The exterior of the the Joseph C. McNeil Generating Station in Burlington
National Renewable Energy Laboratory
Associated Press

If Burlington is ever able to get its district heating proposal off the ground, the state would not have the authority to regulate the system.

The Public Utility Commission this week effectively ruled against itself, saying that the commission doesn’t have jurisdiction over the proposed heating service.

Burlington has been trying to use the excess heat from the Joseph C. McNeil Generating Station since it first went online in 1984. The biomass plant uses steam to produce energy, but most of the heat is lost during the electric generation.

It would be expensive and complicated to transfer that heat throughout the city, and even though there’s been support for the proposal, the plan has never gotten off the ground.

Still there’s been a question over whether the district heating system would be regulated by the state and if it would require a certificate of public good.

The Public Utility Commission has now ruled that the heating service, which would operate entirely within Burlington’s municipal boundaries, does not require a state permit.

The general idea behind the proposal is to capture the heat that’s produced in the plant and distribute it to some big customers in town, like the University of Vermont Medical Center.

The city argued that the state shouldn’t have a hand in regulating the heating service because it doesn’t generate electricity and that it’s a municipal entity.

“We’d be talking about setting up a new utility that would be managed and regulated locally as opposed to something that needs sort of broader state regulatory oversight," Burlington Mayor Miro Weinberger told VPR Friday.

The district heating system would operate independent of any other city utilities and maintain its own financial records.

Also, under a proposal that is currently under consideration, a third party would construct, operate and maintain the system, before turning it over to the city.

Corix, a Canadian company, is working with the city on the plan.

During testimony, the city said that about $80,000 in Burlington Electric Department ratepayer money has been used for feasibility studies, and that there is a chance that additional ratepayer funds could be tapped.

In its ruling, the Public Utility Commission said the use of ratepayer money could become relevant in future Burlington Electric Department proceedings.

Update 6:19 p.m. This post was updated to include comment from Weinberger.

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