Originally created 01/20/99

Vermont utility, home generator in tussle



ROCHESTER, Vt. -- Tom Pierce and Charlie Martin have been friends for years, frequently taking to the snow machine trails that surround their Green Mountain hamlet.

Both inherited small energy companies from their fathers. Tom is the fourth generation in a line of Pierces that have run the Rochester Electric Light & Power Co. since 1897. Charlie and his brother Steve operate the Central Vermont Oil Co. Inc., which their father, a former dairy farmer, bought in the 1960s.

Tom gets his oil from Charlie and Charlie gets his electricity from Tom. Things seemed to be just fine until Charlie got it in his head to use some of his oil to make more electricity for Tom.

Since then, their friendship has run into some tough sledding.

"He told me right from the beginning that he didn't like the idea and that he was going to fight me on it," Martin recalled recently.

Sure enough, the dispute over Martin's bid to make electricity in his basement and get Pierce to buy it still simmers in front of the Public Service Board.

It's a case that encapsulates in microcosm many of the big issues facing Vermont's larger utilities.

Central Vermont Public Service Corp. and Green Mountain Power Corp. share Pierce's complaint that, under federal law, they must buy electricity made by small power producers -- for as much as twice what they can recoup in rates from customers.

There's talk now in utility circles that the next century will see a boom in "distributed generation" -- tiny power plants scattered in homes and businesses across the landscape, generating power for their own use and for distribution on the power grid.

Martin's idea was to install a new Intelligen Energy Systems Inc. combination boiler-generator that would heat his big ranch-style house overlooking Route 100 and make power, all by burning common No. 2 home heating oil.

When he didn't need the electricity it was making, he would put it onto the electric company's tiny, 850-customer power grid. His electric meter would spin backwards, reducing his bill -- or even earning him a monthly check from the power company.

Instead, two years after Martin invested nearly $8,000 in the Intelligen unit, which he first saw at a home heating oil industry trade show, it sits idle next to a pingpong table in his basement. His legal bills have reached $2,000.

Not far from Martin's hilltop home, Tom and Sandy Pierce and Frank Severy operate their tiny power company out of a big 19th-century farmhouse the Pierces bought from Severy's family in 1986.

Tom and Frank are the line crew, going out in storms to fix power outages. Sandy keeps the books and tries to stay ahead of the state's demands that the company do more in energy conservation.

Sitting opposite the hearth around the corner from the big country kitchen, Tom has short words for his friend Charlie's basement generator: "It's a high-priced toy," he says.

While he wants to dismiss it, he also has several concerns about it. One is safety. "A car hit the pole where (Martin) wants to hook it in just this year," Sandy Pierce said.

The Pierces ask: What would happen if they were working on a line they had disconnected from their own live system while Martin was dumping electricity onto it?

Another complaint is economic. Martin's power couldn't be depended on all the time, so the Pierces would have to sign up for power from elsewhere while taking Martin's when he could provide it. Often, that would be late on winter nights, when demand at the Martin house for heat was high but the lights of Rochester would be shut off -- making Martin's electricity an unneeded expense.

"We have energy going to waste in the middle of the night -- that's the problem," Sandy Pierce said.

For his part, Martin expresses surprise at Pierce's reaction. His 5-kilowatt generator would be a tiny blip in Pierce's 1.5 megawatt system -- a third of 1 percent. He denies Pierce's assertion that he planned to sell Intelligen units around Rochester and elsewhere.

The debate before the Public Service Board is complicated by the fact that Vermont doesn't have a law that seems to fit Martin's proposal exactly.

Pierce and his lawyer, Alan George of Rutland, have asked that the board put Martin's generator through the same sort of review that big utilities would get if they wanted to build a coal-fired power plant.

Last spring, the Legislature passed a law allowing small generators to do exactly the type of "net metering" Martin has proposed. But the law applied only to wind, solar and other environmentally correct systems, nothing so retrograde as a generator running on No. 2 heating oil, a form of diesel.

The Pierces say they have other customers who make their own power, but for their own use. "We just wish he'd use the energy in-house."

Martin says one state official said if he pushed the matter, the state could force Pierce to take power from him. But he's not keen on bringing down the force of law. "That kind of turns me off. Tom's a good friend," he said.