Vermont regulators are recommending an outside audit of the Burlington Electric Department’s management, saying the utility showed a “troubling pattern of regulatory errors, inconsistencies, and shortfalls.”
The suggestion, made Friday by the commissioner of the Department of Public Service, follows a public rebuke of BED’s management by the three-member Public Utility Commission. The utility commissioners, in a scathing July 31 letter, outlined 11 examples in which they said BED had made significant mistakes or oversights.
As Seven Days reported in July, the utility lost nearly $1 million in renewable energy credits due to lack of record keeping. It has also taken more mundane missteps, such as underpaying property owners for the power their solar arrays generated.
Taken together, however, the commissioners found the errors to be part of a troubling pattern that may require “a more holistic approach” to address.
“The Commission is concerned that BED has not implemented adequate quality-control measures or identified the root cause of these issues,” they wrote.
The commission asked the Department of Public Service, which represents ratepayers in cases before the PUC, to recommend “an approach to facilitate effective regulatory engagement.”
On Friday, that’s exactly what Kerrick Johnson, the new commissioner of the department, did. He proposed the department hire, at BED’s expense, an outside firm to perform a “focused management audit of BED’s key business practices. ” Johnson suggested a “business process audit with a specific focus on internal quality controls.”
The audit should explore whether the utility has the right systems in place to ensure it complies with federal and state regulations. It should also examine its operational and financial protocols, as well as employee qualifications, training and performance, Johnston wrote.
He noted that BED does some things well, such as delivering power reliably. He also noted that the state receives few complaints about the utility, and most customers appear to support it, as evidenced by recent successful bond votes.
“These are some of the reasons why the Department finds their poor performance in the identified areas so frustrating: they can do better, they know they should, and yet to date they have not,” Johnson wrote.
The commissioners would have to sign off on such an audit, and they may narrow or expand its scope, Johnson said in an interview. But it’s clear they support something of this nature.
“I think, in general, the commission and the department are in alignment on this,” Johnson said.
An electric utility veteran, Johnson has been through management audits before. He has held leadership positions at the former Central Vermont Public Service, a Rutland-based distribution utility that in 2012 was sold to the Canadian firm Gaz Metro, which merged it with Green Mountain Power; at VELCO, which runs the state’s transmission grid; and at VEIC, the Winooski nonprofit that runs Efficiency Vermont.
Management audits can be effective, he said. “When you have requisite experience and a clear scope of work and you have collaboration and commitment from the leadership of the utility, then it can really work.”
Johnson said he gave Darren Springer, BED’s general manager, a heads up the day before his letter went to the commission, and Springer pledged his full cooperation.
In a statement to Seven Days, Springer said that he and his team “acknowledge and take accountability” for the renewable energy credit error and the instances of BED “not performing to expectations” before the PUC.
“We take our regulatory responsibilities seriously and will be fully cooperative with the third-party review proposed by the Department of Public Service,” he wrote. “We know there are opportunities to improve our processes, and while we’ve taken some steps initially to do so, we welcome the third-party review and any recommendations or best practices that can be offered from that review.”
Mayor Emma Mulvaney-Stanak said BED would fully cooperate with the audit.
“I continue to have full confidence in our Burlington Electric team and the steps they are taking to address the [renewable energy credits] error and concerns raised by the PUC and DPS,” she said in a statement.
Johnson said he could find no comparable examples of a municipal power utility undergoing a PUC-ordered management audit.
He acknowledged that BED is a bit of an anomaly in the state. The municipal utility owns and runs its own power generating plants, including the wood-powered McNeil Generating Station in the Intervale and a hydro plant in Winooski. In addition, BED runs its own energy efficiency programs.
While BED’s complex operations may make its regulatory burden higher than other utilities, that’s no excuse for the shortcomings, Johnson said.
“Is it complicated? Yes it is. That is why leaders of utilities are well paid and have training,” Johnson said. “When you have a team that ostensibly has the resources and clearly has the intellectual wherewithal to complete these tasks, we expect them to.”
Springer, who was appointed by former mayor Miro Weinberger in 2018, earned $282,000 in 2024, according to public records.
He moved to Vermont from Florida in 2002 and earned a master’s degree in environmental law from Vermont Law School in 2005. He has clerked for former U.S. senator Patrick Leahy, been an adviser and chief counsel to U.S. Senator Bernie Sanders (I-Vt.) and worked as a deputy commissioner for the Department of Public Service during the administration of then-governor Peter Shumlin.
He has been pushing to achieve Net Zero impact — in which greenhouse gases emitted equal the amount removed from the atmosphere — in BED’s heating and transportation sectors by 2030. In pursuit of that goal, the city department has encouraged the purchase of EVs and walking and biking to reduce emissions from gasoline, and thermal efficiency programs to reduce natural gas used for heat.
Springer has strongly supported a district energy project that aims to use waste heat from the McNeil Generating Station to heat buildings. The ambitious effort was approved by the City Council in 2023 but has stalled absent commitment to use the steam from the University of Vermont.
Critics have argued the project would tie the city to its decades-long pattern of burning wood chips to generate electricity, something supporters acknowledge is renewable but which climate advocates argue is inefficient and releases huge amounts of planet-warming carbon into the atmosphere in the short term.
The PUC has taken an interest in the city’s pursuit of a district energy system. In its letter to the Department of Public Service, commissioners noted that it is investigating the utility’s spending of about $2 million on the project between 2021 and 2023, including “whether BED had proper regulatory approval for these expenditures.”
