SUSTAINABILITY REPORT 2008 SECTION 1: Performance Overview

 

Welcome to Green Mountain Power's 2008 Sustainability Report.  This report documents Green Mountain Power's progress towards sustainability, reports on activities in Fiscal Year 2008 (September 2007-September 2008), but includes some developments in 2009.  Green Mountain Power transmits, distributes, and sells electricity and utility construction services to 94,000 Vermont customers.  In 2007, we were acquired by Gaz Métro, but we continue as a locally-managed company led by our Vermont-based senior team.  In August 2008, I became Green Mountain Power's President and Chief Executive Officer when CEO Chris Dutton retired after 11 years of leading the company.  At Green Mountain Power, we believe that we have a responsibility to contribute in meaningful ways to the economic health of Vermont, while doing our best to protect and enhance the environmental and social qualities of life in the communities we serve.  In this way, pursuing sustainability is highly relevant to our overall business strategy and the way we run our Company. 

My focus will be on our own triple bottom line of cost, carbon, and reliability.  There are many challenges associated with balancing these three elements, including the recent economic downturn that has affected many aspects of our operation, including investments in renewable energy projects.  Another big challenge is the effective replacement of our Hydro-Québec and Vermont Yankee contracts, which are due to expire in the next several years. Our power profile in 2008 was dominated by hydro (47.6%) and nuclear (39.7%), and supplemented by market purchases (6.8%), biomass (4.1%), wind (0.5%), and oil/natural gas (1.2%).  Our energy vision is to create a portfolio that is low carbon, low cost and reliable.  Our current low carbon profile is primarily due to our two largest contracts, with Hydro-Quebec and Vermont Yankee, as well as in-state renewables.  Our energy and climate strategy is based on the development of a smart, green transmission grid that taps into in-state renewable energy projects, including wind and solar.  We know that in the long-term, renewable energy means less price volatility and more financial benefit to our customers.  However, investing in new renewable projects will be particularly difficult considering today's economic climate and limited access to capital.  A tangible example of our commitment to renewable energy is our commitment to help install 10,000 solar panels in 1,000 days, both by building it ourselves and by offering customers incentives to install solar.  So far, 1,500 have been installed, and we anticipate many more in the future due to the new, attractive renewable rate in Vermont's new standard offer.  Green Mountain Power is in the permitting process to build a 200 kw solar plant in Berlin, Vermont, which will be the largest solar installation in northern New England.  In early 2009, we completed a 58 kw array for our new Westminster service center, providing nearly 80 percent of the building's needs, and we have a 4 kw array in Colchester to power two plug-in hybrids.  We have also given grants to Hannaford Supermarkets, National Life and Green Mountain Coffee Roasters to build solar arrays on their buildings.  All customers are eligible for SolarGMP, which provides financial incentives to install solar generation at homes and businesses.  We're excited to help our customers embrace solar generation in a meaningful way, as we believe solar power will play an important role in Vermont's energy future. 

For a long time, we've anticipated climate change legislation.  To prepare, we became involved with the Chicago Climate Exchange and identified goals to have a power supply with low emissions.  Also, we've been following Vermont's renewable goals and requirements, which will help us to prepare for federal standards.  One challenge is the availability and cost of capital to develop renewables, particularly as returns are lower for the utility sector than for developers.  We believe that there will be more

opportunities for renewable generation under the Obama administration and hope to take advantage of any stimulus dollars available in that area.

This annual Sustainability Report, which follows the 2006 Global Reporting Initiative (GRI) guidelines (the "G3" guidelines), describes our commitment to sustainability.  We highlight our progress, but also offer a transparent view of opportunities for improvement.  This report not only tells the story of our brand but also highlights some recent projects that are really exciting, including our commitment to renewable energy, our plug-in hybrids, a new high-performing Westminster service center, and new prospects for wind development and micro hydro. I encourage you to review our Key Performance Metrics, where we have identified environmental, social, and financial data that directly relate to our material issues.  As part of our sustainable business strategy, we recently determined which issues are most significant to our stakeholders.  These "material" issues are:

1.       Vermont's Energy Future and Reducing Climate Change Risk - how can our power mix effectively balance low carbon and low cost while maintaining our excellent track record for reliability? How can our energy strategy also minimize our climate change risk?  What role does Vermont Yankee play in Vermont's energy future?

2.       Safety & The Work Force - how can we ensure that our workers remain safe while providing exemplary service? How can we replace our skilled workforce as they retire?

3.       The Recession - how can we weather the global economic crisis while still pursuing our energy strategy of investing in new renewable generation? How can we help our limited-income customers maintain reliability electricity service?

4.       Education & Efficiency - how do we communicate important aspects of our business to our stakeholders, including the reasons to commit to long-term renewable generation and ways to be more energy efficient?

These issues are described in detail in this report.  We encourage you to read them, analyze them, and offer us your feedback. We know that our energy vision, energy strategy, and sustainability reporting is only as good as our stakeholder engagement efforts. In 2008, we launched numerous engagement methods, including telephone surveys, stakeholder meetings, employee engagement sessions, a blog, and our annual Community Energy Fair.  Each of these forums allows us to deepen our relationship with stakeholders while also gaining crucial insight into your thoughts on our performance, strategy, and future plans.

Our investor, Gaz Metro, fully supports our commitment to sustainability.  Another benefit of our relationship with Gaz Metro is greater financial strength because of its financial stability, which has been acknowledged by our rating agencies.

As a company that has provided electricity to Vermonters since 1893, Green Mountain Power's values are closely intertwined with those of Vermont.  We appreciate the opportunity to continue to report to you on Green Mountain Power's progress and challenges in our journey to serve Vermonters in an environmentally, socially and economically responsible manner.  Thank you!

 

Mary Powell, President & CEO

Green Mountain Power

Key Sustainability Performance Indicators

We have selected key sustainability performance metrics based on our material issues and on our core company values.   The "sustainability faces" symbolize whether our performance in 2008 was an improvement (J), a challenge (L), or maintaining the status quo (K).  Key performance metrics that relate to our material issues are in bold.  Please note that because this ye

Sustainability Performance Highlights

The following are a few highlights from FY 2008 and through the early part of 2009.

• CO₂ Emissions Reduction. The tons of CO₂ emitted from power generation this year decreased by 9,987 tons. This is mainly due to the fact that we relied less on oil/natural gas and market purchases this year than last.
• Innovative use of solar power. In November, we installed a four kW solar power system at our Colchester headquarters. The system is used to power a two-car Toyota Prius fleet that we converted into plug-in hybrids.
• Hybrid Bucket Truck. In 2009, we put our first hybrid bucket truck into service. It can run on batteries for up to 20 minutes when the truck is parked, which means less idling emissions and noise, and less maintenance on the diesel engine.
• Green Service Center. Our recently remodeled Westminster location is a high-performing building with a 58 kW solar installation, energy efficiencies, and native landscaping. There are even lampposts outside that are fitted with outlets for plug-in electric vehicles.
• SolarGMP Incentive for Vermont homes and businesses. We pay customers for every kWh they generate, in addition to their net metering benefit.
• Renewable incentives. We supported several large solar installations with renewable energy grants. National Life has installed a 73 kW system, Hannaford has installed a 25 kW system, and Green Mountain Coffee Roasters is installing a 100kW, 572-panel solar array on the roof of its Waterbury distribution center.
• Building solar generation. In spring 2009, Green Mountain Power announced plans to build a 200 kW solar plant in Berlin, Vermont, which will be the largest solar plant in northern New England. The project is currently in the permitting phase.
• New Wind Farms. In partnership with Kingdom Community Wind, and Vermont Electric Cooperative, we are pursuing a new wind power installation on Lowell Mountain. The wind farm being proposed would meet the annual electrical needs of approximately 15,000 average Vermont households.
• Fuel Efficiency. In the last three years we've improved fuel mileage over 25% through the purchase of smaller vehicles and hybrids, focus on idling reduction, and two conversions of hybrids to plug-in hybrid vehicles.
• Customer Satisfaction. Our telephone surveys in 2008 revealed that 81% responded "very high" when asked about their overall satisfaction with Green Mountain Power (as compared with 69% very satisfied in 3^rd quarter 2007) - this level of satisfaction is high by historical standards.
• Corporate Giving. In 2008, Green Mountain Power gave $100,000 in charitable contributions to organizations in our service territory and strategic gifts to significant statewide institutions. This included nearly $40,000 to support the WARMTH program, which helps limited-assistance customers.

 

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[1] Please note that the portion of our power profile that is derived from market purchases is very likely to contain fossil fuel sources.  Currently, we aren't able to quantify how much of the market purchases are from fossil fuels.

 

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SECTION 1: PERFORMANCE OVERVIEW                                         

SECTION 2: OUR MATERIAL ISSUES                                                

SECTION 3: THE SUSTAINABILITY OF OUR POWER PROFILE                     

SECTION 4: RESOURCE USE AND OPERATIONS                            

SECTION 5: EMPLOYER                                                                      

SECTION 6: CUSTOMERS AND COMMUNITY                                               

SECTION 7: FINANCIAL                                                                

SECTION 8: COMPANY FACTS & FIGURES                                       

SECTION 9:  GLOBAL REPORTING INITIATIVE (GRI) SUMMARY