Climate Challenge Participation Letter

DOE's Energy Partnerships for a Strong Economy

This Participation Accord describes the commitments that Vermont Public Power Supply Authority (VPPSA) and the U.S. Department of Energy (DOE) have made to participate in the Climate Challenge Program in pursuit of the President's goals for reducing greenhouse gas emissions. The Climate Challenge Program is a joint, voluntary effort of DOE and the electric utility industry to reduce, avoid or sequester greenhouse gas emissions. The framework of the Climate Challenge Program was established in the Climate Challenge Program Memorandum of Understanding and exhibits thereto dated April 20, 1994 (the Climate Challenge Program MOU) (see Attachment A to this Participation Accord).

VPPSA is a private authority of the State of Vermont empowered to issue tax-free debt on behalf of municipal and cooperative electric utilities located in Vermont. VPPSA also has broad authority to contract to buy and sell wholesale power and provide energy efficiency service. VPPSA receives no funds from the State and its debt is not secured by the State. All of its income is derived from participating municipals and cooperatives on a voluntary basis for services rendered. VPPSA member systems serve 23,733 customers in a number of rural Vermont communities with a diverse mix of residential, commercial and industrial activities, including two of the larger ski areas in the Northeast. In 1994, the aggregate load for the VPPSA member systems was 333,119 MWH's and 67.9 MW's. Each VPPSA member system contracts individually for the supply resources necessary to serve their respective loads, including power from their own hydro and diesel plants, a wood chip plant, a nuclear unit, and number of system power contracts. These contracts cover the gamut from life-of-the-unit contracts to six month power sales agreements.

I. VPPSA Commitments

A.
Consistent with Paragraph II.B.1 of the Climate Challenge Program MOU, VPPSA will reduce greenhouse gas emissions by 2,808 tons OF C02 annually by the year 2000. The tonnage savings are based upon the Vermont emission factor of 159 lbs of CO2/MWH, which was taken from the General Guidelines, Voluntary Reporting of Greenhouse Gases under Section 1605(b) of the Energy Policy Act of 1992, Volume 1, Table C.1, (United States Department of Energy, October, 1994). This reduction is measured by comparing projected VPPSA emissions in 2000 in the absence of the activities listed below with estimated VPPSA emissions if the activities listed below are included in 2000. VPPSA emissions encompass all of its members' generation and all of its members' ownership share of co-owned generation.

In order to achieve the commitment, VPPSA member systems will reduce their MWH consumption by 35,321 MWHs annually through implementation of the following energy efficiency measures:

Category:  END USE (DSM)

	          	Program			        MWH

Residential Electric Space Heating and 
       	Domestic Water Heating Fuel Switching	        3,207
Residential "Top Ten" Large User			  468
Residential Water Heating Efficiency and
       	Direct Install Lighting				2,501
Residential Appliance Disposal			          489	
Residential Low Income Weatherization		       82
Residential Mail Order Lighting			          472
Residential Off-Peak Water Heating			 4
Farm Efficiency						  272
Small Commercial Retrofit				4,257
Large Commercial &

amp; Industrial Retrofit		        4,635
Street and Area Lights					  509

	Subtotal				       16,896


Category:  RENEWABLE ENERGY GENERATION (HYDRO)

		    	Program		     	         MWH

Develop Hydro Site				       18,305

	Subtotal				       18,305

Category:  DISTRIBUTION SYSTEM EFFICIENCY IMPROVEMENTS

          		System				  MWH

Enosburg Falls					          N/A	
Hardwick						  N/A
Hyde Park						  N/A
Jacksonville						  N/A
Ludlow							  120
Lyndonville						  N/A
Morrisville						  N/A
Stowe 							  N/A
Swanton							  N/A


	Subtotal					  120

Total Annual Savings in 2000:			       35,321	

Savings estimates for distribution system efficiency improvements will not be available until system efficiency studies are completed for each utility. These studies will be completed at various times throughout 1995 and 1996.

B.

VPPSA will report annually on activities and achievements under the Climate Challenge Program. Results achieved during each year shall be reported in a clear and understandable manner that is consistent with the guidelines adopted pursuant to subsection 1605(b) Energy Policy Act and the Climate Challenge accounting protocols in Exhibit B of the Climate Challenge Program MOU. The first such report may include a description of the activities and achievements of VPPSA prior to its becoming a participant in the Program, expressed on an annual basis to the extent possible.

C.

VPPSA will confer with DOE on or before December 31, 1996 to evaluate jointly the progress of VPPSA in achieving its Climate Challenge Program goals and to discuss possible adjustments to its voluntary commitments.

D.

The Climate Challenge Program representative for VPPSA will be Charles Underhill, P.E., Vermont Public Power Supply Authority, P.O. Box 298, Waterbury Center, Vermont 05677, Telephone No. VPPSA agrees to notify DOE prior to or, in any event, no later than 30 days after any change in the contact.

A.
DOE's commitments to VPPSA are those set out in Section III of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.

DOE will consider VPPSA requests to intervene in regulatory proceedings of federal, state and local commissions and boards on issues pertinent to the Climate Challenge Program. Before DOE intervenes in regulatory and other proceedings pertaining to VPPSA for purposes of addressing Climate Challenge Program issues, it will provide notice to VPPSA.

C.

DOE will provide an annual report to VPPSA describing the actions that it has taken to fulfill its commitments under Section III and Exhibit C of the Climate Challenge Program MOU and the results of those actions.

D.
The Climate Challenge Program representative for DOE, who will serve as liaison to VPPSA, will be Larry Mansueti, Director, Climate Challenge Program, Office of Utility Technologies, (EE-10), U.S. Department of Energy, 1000 Independence Avenue, SW, Washington, D.C. 20585, Telephone No. (202) 586-2588. DOE agrees to notify VPPSA prior to or, in any event, no later than 30 days after any change in liaison responsibilities or personnel.

A.
Use of DOE-developed materials by VPPSA will be governed by the provisions of Section IV of the Climate Challenge Program MOU, which are hereby incorporated in this Participation Accord by reference.

B.

In addition to the foregoing provisions, DOE and VPPSA agree to act in accordance with the principles set out in Section I of the Climate Challenge Program MOU and the general provisions set out in Subsections V.A.-V.D, V.F and V.G of the Climate Challenge Program MOU, which are hereby incorporated by reference.

C.

Either party may withdraw from this Participation Accord or any of its activities under the Climate Challenge Program without penalty and without being subject to remedies at law or equity.

General Manager
Vermont Public Power Supply Authority

_________________________________(date)

________________________________________

Secretary of Energy or designee
U.S. Department of Energy

_________________________________(date)

Attachment:

Attachment A -- Climate Challenge Program MOU and exhibits.

Please send comments to:
Lawrence.Mansueti@hq.doe.gov