- Burlington VT - Ward 4 and Ward 7

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FAQs on BED Bond Item

Why are Burlington voters being asked to approve a $39.6 million bond for BED?

BED often bonds for projects that have a long-range benefit. This bond will include several projects that will enhance our system and its reliability, allow us to acquire renewable generation, reduce NOx emissions and provide greater rate stability in the future. The bonds will be purchased when needed to begin those projects.


Will the bonds increase the electricity rates of residents and businesses?

No. The projects that the bonds will fund should generate enough revenue to cover the cost of the debt service (principal and interest for the bond).

What are the projects?

There are several.

*$10 million for power supply acquisition. BED is planning to contract for and possibly purchase generation. As our long-term power contracts come to an end and we transition to the post fossil-fuel economy, we expect to acquire more electricity from renewable instate generation, which is expected to be more secure and stably priced over the long term than other sources. 

*10.8 million for an equity investment in VELCO. A higher share of equity by BED in VELCO provides more security for BED ratepayers, maintains our current VELCO ownership interest level, helps fund major transmission upgrades within the state and provides a very high rate of return (12.5 percent) on the investment.

*$5.4 million to pay for BED’s share of the East Avenue Loop Transmission Upgrade project. This project will greatly enhance system reliability within Burlington by providing a looped feed between VELCO’s substation in Essex and the East Avenue substation and by providing BED with a direct connection to McNeil power rather than paying to wheel this power over GMP’s lines.

*$4.5 million for a NOx reduction unit at McNeil. Not only will this improve air quality in the Burlington region by reducing nitrogen oxide (NOx) emissions by over half and also reducing carbon monoxide emissions, but, once completed, McNeil power will qualify in high-value REC (Renewable Energy Credit) markets in Connecticut and possibly Massachusetts. Under current assumptions, this project has a two-year payback, after which Burlington ratepayers will reap the monetary benefits of this investment. The air quality benefits begin as soon as it is completed, which is scheduled for this fall.

$4.3 million to convert more sections of the BED distribution system from 4 to 13.8 kilovolts. This conversion began several years ago and is greatly improving reliability within Burlington. It substantially reduces line losses, which saves ratepayer dollars. Once the entire city is converted BED will not have to maintain two separate distribution systems, which will save money.

$1.8 million to underground the BED distribution lines on the Waterfront. There has long been a goal to remove overhead power lines along Burlington’s beautiful Waterfront. This project will remove BED’s distribution lines. GMP’s subtransmission lines will be removed during a later phase.

$3 million for debt service reserve costs. Setting aside this amount is required by the bonding authority until the bond is paid off.


If the bond item is approved, does it mean that all of these dollars will be drawn down immediately?

No. This bond vote is to give BED the authority to sell bonds up to the amount of $39.6 million. If any one of these projects does not go forward, then BED will not sell that portion of the bond. 


Regarding the NOx reduction project at McNeil, would this process involve the use of ammonia?

Yes, the chemical process to achieve the NOx reduction uses ammonia, which acts similarly to a catalytic converter. About one truck a week will transport ammonia into Burlington. Unlike the ammonia that is transported into Vermont for agriculture, which is at 100 percent strength, this ammonia will be only at 19 percent strength.


Are there safeguards in place for storing the ammonia?

Yes. The ammonia will be stored in a double-walled tank, and an alarm will sound if the inside tank leaks.  On the outside chance there is a spill, McNeil personnel would contact the emergency responders and clean up contractor to have the spill cleaned up.


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