Semiconductor manufacturer GlobalFoundries’ plan to become a self-managed utility in Vermont has raised concerns about the future of a proposed 100% renewable energy standard (RES) for the state.

During a public comment session on Tuesday, Ed McNamara, director of the Regulated Utility Planning Division at the Vermont Department of Public Service (DPS), avoided answering questions about how the company’s plan might affect the RES straw proposal.

The manufacturer, which has a facility in Essex, Vt., is responsible for about 8% of the state’s electricity load. It claims that global semiconductor market conditions are such that if the company does not reduce its energy costs, it will need to move out of the state.

GlobalFoundries’ petition for utility status is a hiccup in an already tricky situation that has the DPS updating the state’s comprehensive energy plan and trying to align it with the pending state climate action plan. Drafts of both plans are due this fall.

In July, the Vermont Climate Council’s Cross-sector Mitigation Subcommittee recommended that the full council increase the state’s existing RES in the final climate action plan from 75% by 2032 to 100%, with no proposed target year. The subcommittee’s members, which include McNamara and Green Mountain Power’s (GMP) chief legal officer, Liz Miller, cooperated with DPS staff on a public meeting Tuesday to gather input on the potential design of a 100% RES.

But the officials from both camps were unable to answer questions from attendees on how GlobalFoundries’ plan would fit into the new RES. That’s because McNamara and another representative of GMP are witnesses in the case for GlobalFoundries’ petition filed in March with the Vermont Public Utility Commission (PUC) (21-1107-PET).

In its petition, GlobalFoundries asked for approval to purchase its electricity through the ISO-NE market instead of being a GMP customer.

Central to stakeholder concerns about the petition is the company’s request for exemption from compliance with Vermont’s existing RES because it would not distribute or sell electricity. Vermont’s RES requires its electric utilities to procure a percentage of their retail sales from renewables.

If the PUC exempts GlobalFoundries from RES compliance, the power it procures through ISO-NE “potentially could be from the general mix, which as we know, contains lots of fossil fuel in the form of natural gas,” Chase Whiting, litigator for the Conservation Law Foundation (CLF), said during the public meeting.

Given that DPS and GMP generally support the petition, Whiting said, and they are considering a possibility in which 8% of the state’s electricity load is not subject to a 100% RES, those positions “seem a little bit in conflict with one another.”

GMP’s support, according to Miller, is based on GlobalFoundries’ commitment in its petition to meeting the state’s greenhouse gas (GHG) reduction goals.

But a commitment isn’t enough, said Ben Walsh, climate and energy program manager at the Vermont Public Interest Research Group.

“They should bind themselves to the same requirements that every other electricity user in the state has and be part of the renewable energy standard going forward,” he said.

If the company continues to seek an RES waiver, he added, the DPS and the council should not be leading the conversation on how to design a new standard.

McNamara acknowledged that there are outstanding issues related to GlobalFoundries’ petition and the RES proposal, but he said he had concerns about CLF questioning him outside of the litigation.

Impact on Vermont

Altering GlobalFoundries’ position as an energy customer of GMP would not be without significant consequences for the state, according to witness testimony.

If the PUC approves the petition and waives RES compliance, Vermont’s GHG emissions “likely would increase,” Asa Hopkins, vice president at Synapse Energy Economics, said in testimony on behalf of CLF.

The company would not be obligated to purchase renewable energy in the market, and “purchasing and retiring RECs beyond what is strictly required would be contrary to GlobalFoundries’ focus on the lowest-cost power supply,” Hopkins said.

State emissions would increase by 88,000 metric tons in 2027, rising to almost 100,000 metric tons in 2032 and each year after, he said, adding that the social cost of those emissions would be $10 million in 2032 and each year after. Furthermore, the company’s emissions increase would equate to 2.3% of Vermont’s total emissions in 2030.

“To meet the [GHG emission-reduction] requirements of the 2020 Global Warming Solutions Act, Vermonters would have to take substantial additional other actions in order to compensate for GlobalFoundries’ lower contributions,” Hopkins said.

If the petition is denied and the company moves out of Vermont, the economic consequences would be “unprecedented,” Arthur Woolf, of Arthur Woolf Economic Consulting, said in testimony on behalf of GlobalFoundries.

With 2,200 in-state employees, GlobalFoundries is the largest for-profit employer in Vermont, and it pays $2.6 million in property taxes in Chittenden County. In addition, GlobalFoundries exports $1.3 billion in products from its Vermont facility, an economic activity that Wolf said brings additional value through “intellectual property, education and workforce development potential.”