The Vermont Electric Power Company (VELCO) is responsible for planning, developing,and maintaining Vermont's transmission system. Vermont's growing electric loads, particularlyin Northwest Vermont, are straining existing capacity. VELCO has implemented an integrateddistributed utility planning (IDUP) project to determine the optimal solution to ensure reliablesupply of energy services. A proper IDUP must address traditional transmission capacity, alongwith distributed generation and energy efficiency. Particular attention to the timing of resourceacquisition is critical, to match loads with capability, using a mix of appropriate resources.VELCO's analysis raises substantial issues regarding electric system policy, especiallyrelated to cost-effectiveness, funding and equity. In VELCO's case, the most cost-effectivesocietal solution is a mix of energy efficiency plus distributed generation. Energy efficiency,while substantial and important, was not sufficient in capacity and timing without some strategiccontribution of distributed generation. While this solution provides the least societal, long-runcost, it is substantially more expensive to Vermont ratepayers than traditional supply. Undercurrent Northeast Independent Systems Operator (ISO-NE) rules, Vermont's contribution to thetransmission system capital cost is only five percent, with southern New England's greater loadscovering the remainder of these costs. Vermonters, however, would likely bear the full costburden of implementing any energy-efficiency initiatives and distributed generation (DG).This paper will describe the IDUP process, analysis and results. It will address policyconsiderations currently under discussion in regulatory hearings. The pending resolution andissues surrounding the use and usefulness of the planning study will also be addressed.
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