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Public utilities

Vermont Public Utility Commission Approves Accounting Order for Vermont Electric Cooperative

Strategic Insights

— 2 min read

The Vermont Public Utility Commission has issued an accounting order for Vermont Electric Cooperative, Inc. (VEC) to record up to $1.8 million in certain storm-related costs for 2024 to a deferral account. VEC had requested the accounting order after experiencing significant storm-related costs due to winter storms Finn and Gerri and tropical storm Debby. The commission found that the costs were material to VEC's operations and that the event was unusual and not likely to be repeated. The accounting order will allow VEC to reduce the amount of the deferral account by applying credits when it spends less on storm-related costs than approved in rates and when its earnings exceed a 2.0 Times Interest Earned Ratio in a given year.

Key Takeaways:

  • The Vermont Public Utility Commission has approved an accounting order for Vermont Electric Cooperative, Inc. (VEC) to record up to $1.8 million in storm-related costs for 2024 to a deferral account.
  • The commission found that the costs were material to VEC's operations and that the event was unusual and not likely to be repeated.
  • The accounting order will allow VEC to reduce the amount of the deferral account by applying credits when it spends less on storm-related costs than approved in rates and when its earnings exceed a 2.0 Times Interest Earned Ratio in a given year.
  • VEC will maintain detailed and separate records substantiating all funds covered by the order to facilitate further review.
  • The accounting order does not bar any party from contesting or the commission from determining or disallowing the reasonableness or prudence of such costs in a rate proceeding.
  • The case will be closed 90 days after the issuance of the order unless VEC requests a modification to increase the amount to be recorded to the deferral account prior to that date.

Statistics:

  • The accounting order allows VEC to record up to $1.8 million in storm-related costs for 2024 to a deferral account.
  • The commission found that the costs associated with the three storms (net of FEMA funds) contribute to 2024 being one of the highest annual storm-related costs experienced by VEC.
  • The costs associated with the three storms total $2.087 million (net of FEMA funds).
  • VEC estimates that absorbing these costs in a single year would require an additional rate increase of 2.47%.

Sources:

  • Vermont Public Utility Commission Case No. 24-3724-ACCT Petition of Vermont Electric Cooperative, Inc. for an accounting order for extraordinary storm costs (Order entered: 01/17/2025)
  • VEC Request at 2
  • Department Comments at 2
  • 30 V.S.A. § 221
  • 3 V.S.A. § 811

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