Recent national reporting has highlighted how cities are struggling to finance initiatives and projects to help meet their ambitious local climate goals. In Burlington, our Net Zero Energy city by 2030 goal is one of the most ambitious local climate goals in the nation and is guided by our Net Zero Energy Roadmap.
Burlington Electric Department (BED) has launched dozens of incentive programs in the last few years to encourage customers to switch from fossil fuels to electric vehicles (EVs), cold climate heat pumps, electric bikes, electric lawncare equipment, and other technologies that rely on Burlington’s 100 percent renewable electricity. Customers have utilized more than 1,350 of these incentives so far. Our City also has initiated new policies aimed at requiring weatherization for rental properties and renewable primary heating systems for new construction buildings. While our most recent Roadmap update indicates that Burlington is keeping pace with the greenhouse gas emissions reductions required to achieve our Net Zero Energy goal, we know that part of our progress is due to reduced driving during the pandemic. We still need to increase the pace of adoption for clean energy technologies to stay on track with, and ultimately to reach, our local climate goal. We know that, based on the recent IPCC report, we must take action now to reduce emissions. The City is pleased to present the Net Zero Energy Revenue Bond proposal to the community as a fiscally-responsible approach to accelerating our climate progress.
BED Net Zero Energy Revenue Bond
The BED Net Zero Energy Revenue Bond is among the first of its kind in the nation. The proposal, unanimously approved by the Burlington Electric Commission and the Burlington City Council, is aimed at accelerating our climate progress during these next few critical years while also making critical investments in our grid and infrastructure.
The Net Zero Energy Revenue Bond would invest $20 million over the next three years in the following key areas:
- Grid upgrades for reliability and to accommodate new loads from EVs and heat pumps;
- Technology systems to better serve our customers and to offer new dynamic rates to help more customers switch economically from fossil fuels;
- Maintenance of our renewable generation plants and conversion of our gas turbine peaker plant to run on renewable biodiesel instead of oil; and
- New EV charging stations, a new electric bucket truck for our line crew, and new demand management technologies.
This proposal is beneficial to BED customers from a rate standpoint as well. With the Net Zero Energy Revenue Bond, BED will be able to continue investing in reliability and climate progress while reducing upward rate pressure over the next several years. While we anticipate more frequent rate adjustments going forward, BED will be able to keep those increases more moderate with the Revenue Bond than without. In addition, on August 16, 2021, Moody’s Investors Service affirmed BED’s A3 credit rating.
Strategic Electrification
In addition, utilizing $5.3 million over three years from our annual general obligation-backed bonds, BED is proposing to double funding for customer incentives to support a faster pace of adoption and continue our Green Stimulus level of incentives for heat pumps and EVs. The Green Stimulus has helped to nearly double adoption of electric and plug-in hybrid vehicle incentives and has increased by 10 times the number of heat pump incentives Burlingtonians have utilized in just over one year. Importantly, through the Green Stimulus, we have increased access to these technologies for our low- and moderate-income customers with enhanced rebates that, for example, cover up to 75 percent of the cost of a single heat pump.
Doubling funding for our strategic electrification customer incentives will:
- Provide incremental reductions of an additional 47,000 tons of greenhouse gas emissions lifetime compared with business as usual, equivalent to nearly 100,000 barrels of oil consumed.
- Provide revenue in the form of increased electric sales that will help pay the debt service on the proposed bonds.
- BED has nearly $700,000 in savings from maturity of existing revenue bond debt, which will help pay for debt service on the new Net Zero Energy Revenue Bond, and
- The new strategic electrification projects funded by the bond proposal are projected to generate incremental net revenues of $467,0000 annually between fiscal years 2025 and 2032, and these projects will also contribute approximately 40 percent of BED’s obligation over the 20-year debt service life of the bonds.
Just as our energy efficiency revenue bond jump-started our progress toward reducing energy use in the 1990s, so too will the Net Zero Energy Revenue Bond provide foundational support for the transition from fossil fuels to renewable energy during this critical decade.
