Vermont Legislature SmartTranscripts:

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: Okay.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: We're live. Yeah.

[Rep. Kathleen James (Chair)]: Okay. Welcome back, everybody. It's House Energy and Digital Infrastructure. It's Thursday, May 7. And we are here to learn today about an exciting new community scale geothermal project in Hinesburg. My name is representative Kathleen James, I am from Manchester.

[Rep. Michael “Mike” Southworth (Member)]: Scott Campbell, St. Johnsbury. Chris Morrow, Windham, Windsor Bend, Michael Southworth, Caledonia too. Christopher Howland, Roland Ford. Dara Torre, Washington too.

[Rep. Bram Kleppner (Member)]: Graham Kleppner, Chittenden thirteen, Burlington.

[Rep. Kathleen James (Chair)]: Great. And joining us. Katie Gleason. Interim provocate. Super.

[Rep. Michael “Mike” Southworth (Member)]: Thank you.

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: That looks like you.

[Rep. Kathleen James (Chair)]: Great, all right. For the record, we have two witnesses joining us here.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: All right, should we let Amy introduce herself first and then That I'll move into the

[Rep. Kathleen James (Chair)]: sounds great.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: All right.

[Amy Demetowicz (Champlain Housing Trust)]: Hi, I'm Amy Demetowicz from the Champlain Housing Trust.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: Nice, great, welcome. And I'm gonna get us started and then I will kick it over to Amy and then I'll take it back again. I'm Morgan Hood, I am the Director of Product Management at Vermont Gas Services. And today I'm gonna talk to you a little bit, just to break it down for you in advance, about a little history of remote gas for those of you who might not, you know, be totally familiar, and our electrification efforts, our effort to diversify our product portfolio beyond natural gas. Then I'll talk to you a little bit about how we're approaching geothermal, and a little bit about how nationally we're seeing others, across North America actually, we're seeing others approach geothermal. Then I'll move into the project, at which point I'll pass it over to Amy, who will discuss project on broader terms. I'll dive into how geothermal is gonna be applied there, and then I'll move into what our next steps are, what our plans are with geothermal and geothermal moving forward. Great. So now that I've set this stage, so Bramante Gas Services, we're the state's only natural gas utility. We serve about 56,000 commercial, industrial, and residential customers. We're only in the Northwest corner of the state. We have been around since the mid sixties. We started offering energy efficiency services pretty early on in the nineties, so we've had a really active weatherization program and efficient equipment program. And then in 2016, we became a regulated energy efficiency utility with the state. I came on in 2020 because Vermont Gas Services had announced a climate action plan and they needed people to help design and then implement new products and services that would help the company meet their decarbonization goals. Since I came on, along with my colleague who is stuck behind a burning car on 89 South, Richard Donnelly, we introduced our first heat pump program in 2021, think, 2022. The company, Vermont Gas, has offered in home services, like we'll fix your hot water heater. We also would sell you a new hot water heater, or lease you a new hot water heater, since we started in the sixties. And we decided to build upon that program initially and start offering people heat pump water heaters, in part because it aligns with our decarbonization goal and I think even more significantly because it was something our customers wanted. And so we wanted to be able to be to hold on to these customers and provide them with options as they look to potentially move away from natural gas. Each year after that, we'd introduce a new heat pump product. Our folks would install and service them. We lease and sell them. We did centrally ducted heat pumps first, which are heat pumps that integrate with usually your home hot air furnace and use heat pump to deliver heating and cooling efficiently throughout your home. And then the following year we started offering ductless mini split heat pumps, which are what you see all over the place when you see those wall cassettes that are delivering heating and cooling. And they're great for, they can be a whole home solution for our homeowners with boilers. They also can be great if you just want to sort of spot treat different rooms of your home. So we're trying to position ourselves as the people who are there to help you efficiently address your home energy needs with our services and products. And to that end, we also started exploring what a utility geothermal offering could look like. Our efforts began in 2022, and I'll give you a little overview of geothermal just because I don't know how familiar the people in this room are. If it's stuff you already know, I apologize in advance. We'll try to keep it high level and brief. But geothermal uses a heat pump much like the air source heat pumps that draw air from our environment to efficiently heat and cool your home. It draws from the temperature of the earth. So if you have an in ground loop and you go down maybe 400 feet, so it's a fair amount, You're able to constantly pull maybe a 50 degree temperature from the earth year round. So the heat pump, theoretically, should have to work far less hard in the home. Instead of moving a temperature from zero outside with the air to 70 indoors in the winter, it's now working with that sort of 50 degree starting point. There's water. In our climate, oftentimes a little bit of glycol to keep the pipe from freezing that's constantly moving through the system. The heat pump draws from it. You get efficient heating and cooling. There's also something I just wanna touch upon really briefly that we're not gonna talk about today, beyond this, which is deep geothermal, which is getting a fair amount of attention, and interestingly, is one of the only renewables that the current federal administration seems to be really gung ho about. And that's when that's like what you'd see in Iceland, you see it in Nevada. That's when you go super deep into the earth and you use the earth's temperatures to generate electricity. You can create your own power facility. This is shallow geothermal. Again, we're drawing that 50 degree temperature to make our heat pumps work more efficiently. There are two approaches to geothermal that we're exploring. One is, and I'm sorry, this is repetitive for you because we had this discussion prior to my but coming one that you'll be seeing in the news a bit is a networked geothermal system. And this is when you have a community, all the buildings are connected using a pipe with some water and a little bit of glycol, and everybody in that community is drawing their heating and cooling from this thermal energy network. Network systems can be great when you have buildings within the community that aren't producing waste heat would be an example. So grocery stores, skating rinks, data centers, we won't be having any of those. But anything that produces excess heat, that heat theoretically can go into this loop and then the neighborhood can benefit from the heat in the loop. You also, when you're doing a network system, something of value is load diversity. So when you think about a standard residential neighborhood that's just homes, nothing else going on, we're all using our thermal energy kind of the same way at the same time. That isn't beneficial to a network system because we're all drawing at the same intensity at the same moment. But if you're in an area that has a lot of energy used for commercial purposes during the day and then the energy to use shifts to residential purposes in the night, you might get that low diversity that will start making a thermal look like makes sense. VGS loves that and we're looking for opportunities to pilot that approach in our service territory as well. But our first project and what we'll talk about today is independent systems in a residential neighborhood. So each building would have its own thermal energy loop and the units within that building, or if it's a single family home, would draw from that loop. The utility would own the in ground asset, which would be the thermal energy loop in the ground, and the customer would own their internal home heating and cooling equipment. We like this approach as well because it's cheaper. It has less engineering complexity compared to a lube. It's clear cut. So we're also thinking a lot about our staff. We want to make sure that we are positioning our Vermont Gas staff to have skills that will serve them long into the future when people potentially are less reliant on natural gas. So it's sort of upskilling our, you know, our employees. And this is a good way to introduce them to a technology that they aren't installing today, these independent systems. So with that, I'm going to if it's okay with you, Amy, I'm going to kick it over to you to talk about the project we're gonna go into in more detail today, which is, it's the Windy Ridge development in Hinesburg. And then more specifically with this geothermal project we're going to detail, it's the Riggs Meadow sort of division of that department, of that development, which is the piece of that development that I think is anticipated to move forward soon. So with that, Amy, do you wanna share a screen or share your because you have a nice visual of the site. And then tell us a little bit about the project overall and why geothermal is something that CHT is curious to explore.

[Amy Demetowicz (Champlain Housing Trust)]: Yes, thank you, Morgan. If it's okay, I will share my screen just to show you the location of the project. Great. Oh, it's not turned on. Got it. Okay, are you seeing my screen?

[Rep. Bram Kleppner (Member)]: Yes, we are.

[Amy Demetowicz (Champlain Housing Trust)]: Great, great. First, thank you for the opportunity to talk about this exciting project. We're really excited about this partnership with VGS, who we've partnered with probably on all of our projects historically. Our Windy Ridge project, as Morgan said, is located here in Heinzburg between Heinzburg Village and CVU High School. It was made possible it actually has another alternative energy connection because the property was donated to us by Jan Blomstrand, who was the co founder of NRG Systems here, which does wind energy, and she's been a longtime advocate for renewable energy. Her vision when she donated this land to us was not simply to conserve the land, but to create housing and economic opportunity for the community, and right from the beginning, she challenged us to incorporate alternative energy solutions into the development. Have CHT has incorporated solar energy into many of our affordable housing developments over the years, but we've not undertaken a geothermal project, mostly because of the barriers. There's a very high upfront capital cost to digging those wells and putting in that infrastructure, the operational uncertainty, and in fact, we are located in natural gas territory, where gas has historically been the cheaper and more reliable option. But at the same time, we're actively working toward decarbonizing our housing portfolio and reducing our long term operating costs. When VGS approached us with the opportunity to pilot a geothermal, community geothermal system, we were very excited. It was a great opportunity for VGS to check out that new model, and for CHT, it was an opportunity to test this geothermal operations in a practical, affordable housing setting. This is exactly the kind of cross sector partnership that we're so good at here in Vermont and that we need to continue if we're serious about both housing production and climate goals. So what our project includes, phase one, as Morgan was talking about, is in this southern quadrant of the property. The property is essentially here. This southern portion is called Riggs Meadow. We're partnering with Ever North on a 36 unit affordable rental community here, as well as eight permanently affordable shared equity homes that we're partnering with Habitat for Humanity to build. We're going to get started on that construction this summer. We're ready to go fully funded and ready to begin construction. We're excited to test this new model of accessing geothermal energy through a utility style arrangement, which is a very familiar arrangement for us. We won't bear that high upfront capital cost, but instead we'll pay an access fee to VGS to connect to their geothermal loop system, much like right now we pay VGS for our natural gas connection. So it's a very it's a great simple model of making geothermal a utility type arrangement. We're also going to pay an ongoing maintenance fee to VGS for the operation and maintenance of the system, including the interior equipment. This is a really important component for us because it provides reliable, expert routine and emergency service for a type of mechanical system where honestly qualified contractors can sometimes be difficult to find. Knowing we can call on VGS for emergency and for regular maintenance is really important and valuable to us. The system is still operated by electricity, but what we're hoping is that there will be efficiencies in using the geothermal model, that instead of the conventional air source heat pump, which is, you know, working off of the very variable outdoor air temperatures here in Vermont, we'll be able to tap into, as Morgan was saying, that consistent temperature of the earth. I think that the physics make total sense to me. We're waiting to see if operationally that actually leads to lower electrical costs than what we're seeing in our air source heat pump modeled housing. One of the key goals of this pilot really is to better understand whether those operational savings are realized in practice. Again, the theory makes sense, and we want to test this out. We're very cost sensitive, and if it doesn't work, then we be moving forward with other projects. So it's very much about testing that long term practicality for this type of model. What excites us is that it will work, that the physics will in fact prove true, and we will certainly be looking to replicate this model and continue our partnership with VGS.

[Rep. Kathleen James (Chair)]: So just to make sure I'm understanding on this pilot, I think this is so cool. So obviously we know about the efficiency and the climate benefits of a geothermal system like this. What we're piloting or making sure or finding out is whether it will result in actual savings on the electric bill do you guys pay the electric bills in each unit or do the tenants pay? Sorry, I don't know how that works.

[Amy Demetowicz (Champlain Housing Trust)]: Yeah. You know, we have moved to a model more regularly where the landlord, we as the landlord, pay that utility cost. So it's included in the rent. So it's still an impact obviously on the affordability for the tenant.

[Rep. Kathleen James (Chair)]: Okay. So that's where the big pedals get hit the metal here is we're installing this costly system with upfront costs and does it pay us back over time?

[Amy Demetowicz (Champlain Housing Trust)]: Exactly. And does utility charge that we're going to be paying VGS for this geothermal loop plus the electrical costs of running the inside heat the buildings, how does that compare to I'll what we're tell you honestly, at this point in all of our affordable housing, we're doing all electric. We're doing air source heat pumps, and so this will be compared against our air source heat pump projects.

[Rep. Kathleen James (Chair)]: I see. Okay. That's cool. Rep. Kleppner and Southworth.

[Rep. Bram Kleppner (Member)]: Presumably also for Vermont Gas Systems, you wanna figure out if you can make money doing this, Absolutely.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: We can't do anything that has a negative impact on ratepayers. Right now, these projects, we have a relatively small innovation fund we could tap into for the purpose of learning, really, or encouraging market adoption. But longer term, what we're really pursuing is a business model that allows us not to pass along the cost of these systems to ratepayers and to have them be sort of self sustaining. We charge the customers and we come out, okay, it's never going to be a huge money making endeavor, but if it comes anywhere close to comparing with our natural gas business and we're able to provide customers with a valued alternative, that's a win. Question?

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: Nope. So is this is is this So

[Rep. Kathleen James (Chair)]: Yeah. I'm sorry. Representative Southworth. Oh. He was totally Oh, First Yeah.

[Rep. Michael “Mike” Southworth (Member)]: What is your projected payback period on this project?

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: This project is a little different because we do have some innovation funds going toward it and I don't need to get into, I don't think, our climate and innovation fund, but we have regulatory approval as part of our alternative regulation plan to spend x number of dollars a year. I think 2,000,000 total on all R and D. And we have to make sure that these every time we present a project that is more where we're bringing more than $25,000 to the table, we have to go back in front of our regulators and show them that it's a thoughtful that's a thoughtful project. So we're giving a little bit of that money to it and then we are charging the customer an access fee, which covers things like property tax that we'll have to pay on these systems, and the maintenance, which is pretty low compared to the alternatives on a thermal energy loop. You kinda check it out once a year, like you monitor your pool and you make sure that it's performing well and it's well balanced. So we're charging them to cover that and that's about it. And the hope is with most of the project we're pursuing, kind of break even at these systems. Yesterday we were saying it's around the seven year mark, but that's probably overly simplistic right now. And if you want more detailed analysis, because we definitely have folks running it and we are not allowed to spend money frivolously, I think it's something that we could share with you.

[Rep. Michael “Mike” Southworth (Member)]: So it'd be safe to say somewhere between seven and ten year.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I think that's pretty safe to say. Thank you.

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: Yeah. Well, my my questions are on same thing. So this is part of of your regulated spends. Right?

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: And It is.

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: Yeah. Even though you're not selling gas, it's still you're still you still have customers that you're basically. So it seemed it seems like a different business. It seems like a different, you know, thing.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I mean, there's some commonality for sure that made us think that we would be capable of delivering this service.

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: Oh, yeah. No. No. I I

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I Right. But it is pipes

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: in the ground and all

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: know that. You know how to invest in infrastructure over Yes, a long term time I'm just saying

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: in terms of the regulation, it seems like a different business.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: And right now there's a bill that was passed, think I it was a couple of springs Yeah. Ago Isn't it already a couple of springs ago? Or was Anyways, it's been quite a bit, but we've definitely worked with Vermont Community Thermal Energy Networks on that to inform the language. And we'll continue to respond to whatever approach is dictated to us as to how we handle these projects. Right now I think there's still it's still sort of a trial period as to how they'll be addressed long term.

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: I guess I'm wondering why it falls under the same regulatory structure. But that's not a question for you.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: It's probably not a question. I'm not the best equipped to answer it. And I'm not sure if that's what the long term plan will be. So yeah, I would say our thinking there is continuing to evolve and ultimately we're responsible to what our regulators want from us. Thank you. But yeah, some similarities, some key differences.

[Rep. Bram Kleppner (Member)]: So the conversation about a seven to ten year payback made me curious as to what your expectation is for how long these systems last. Is there data from Iceland and the There

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: are data all over the place. There's something that I didn't touch upon in geothermal systems have been up and active and performing since, I don't know. I mean, we've got systems in Burlington that have been performing since the fifties. We know the technology works. We also, back in 2022, co founded a group with Northwest Natural Gas Only Utility out of Portland, Oregon. We co founded what we call the Utility Network Geothermal Collaborative, so that all utilities, all gas or dual utilities, gas electric, could share learnings about this. Because in some states, the regulators were saying, you know or policy was dictated, gas utilities have to deliver thermal energy network projects, or they'll get incorporated into future gas proceedings. They they're popping up all over the place, and we thought we should convene a group so that we can all share best practices, learn from one another's pilot projects, learn from one another's financial and business modeling, and also power and numbers. We have easy access to all the manufacturers within the industry, everybody really pushing to move this thermal energy solution forward. So that started with about 10 utilities and now it's up to 31 utilities, about a 100 participants across North America. And they represent, I think it's around 60,000,000 natural gas users. So I don't feel we're going out on a limb here. We're really part of a well established collaborative group doing its due diligence to deliver these systems thoughtfully, effectively, in different climates, obviously.

[Rep. Bram Kleppner (Member)]: So you've sent us decades, these things.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: 100% decades. They last for decades. I think another perk is the, I don't know how familiar you are with air source heat pumps, but they have that exterior component, you know, the outdoor condenser, the fans. It's just vulnerable to the elements because it's outdoors. Yeah. Geothermal systems, it's in the ground, it goes directly into your home, so you just don't have that vulnerability to exterior elements. I think that alone makes the interior components of a geothermal system, they have about between a twenty and thirty year lifespan compared to an air source, which is more around fifteen if you maintain your system well. And then the thermal energy loops are actually made with the same pipe that natural gas infrastructure utilizes, which is another reason why our folks are so well equipped.

[Unidentified Member (House Energy & Digital Infrastructure Committee)]: Like they put this pipe in

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: the ground every day, the different colors so you know what you're dealing with once you start digging. But this pipe we've seen from the gas industry can last for a hundred years. So I think they have a fifty year sort of anticipated life cycle on the in ground component, but we've seen this in ground component last much longer. So it's a long term solution and we've got the data to make us really confident about that. So

[Rep. Michael “Mike” Southworth (Member)]: this uses a standard diameter well pump, but instead of putting one pipe down, you put two so you have a closed loop?

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: With the systems, that's a great question. Didn't touch upon it actually. There are closed loop systems and there are open loop systems. Right now we're pursuing closed loop systems which do pretty much exactly what you're saying.

[Rep. Michael “Mike” Southworth (Member)]: Oh, I kind of think if you're putting glycol in it, you have a open loop system.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: Yeah, you don't put glycol in the open loop ones. But that's, you know, if you're drawing from a water source or something and then you can express it elsewhere, those systems can be cost effective in some applications.

[Rep. Michael “Mike” Southworth (Member)]: And then in a new build, is this well internal to the home, so it's in the basement or external outside the structure?

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: It can be either. So you don't want it too far away from the home if you can help it because you don't want to have that piping. You can put it, you know, four feet away from the foundation. We went and visited a project down in Colorado this past fall where they are putting the, they're putting the connection directly under the foundation of the house. So you get in there when the new construction is being built, comes up right through the foundation, hits the interior heat pump, and then you have no exterior

[Rep. Michael “Mike” Southworth (Member)]: So it's probably a plastic pipe. Yeah, PVC. Correct. I had a hard time, well, the old steel pipe, yeah, taking part every eight feet if you're in the basement.

[Amy Demetowicz (Champlain Housing Trust)]: We wouldn't be able to do that. Well, no. Please go deep.

[Rep. Michael “Mike” Southworth (Member)]: They can make a hatch to stumps the roof.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: Yeah. They're pretty great. They're pretty established. Is it okay if I Yeah. Okay. And something else that you touched upon that I didn't share previously. Right now our thinking is we want to pursue these projects in new communities that are being developed, that are considering all electric, although if they were considering natural gas and wanted to go this direction, we would support that as well. And we're just, we're not, we're pacing ourselves. Retrofits going into existing neighborhoods and delivering this service can certainly be done, but you then enter into, know, is the home weatherized? You're gonna wanna install this in a weatherized home, much like you would with an air source heat pump. And you also need to know that the interior system, how heat and cooling are distributed throughout this home will work with a ground source heat pump. So the project's increasing cost and complexity when you're going into existing buildings, and we think we'll get there, but we need to get comfortable with the systems first, and new construction is the least cost, most effective way to learn.

[Rep. Michael “Mike” Southworth (Member)]: Yeah, so it's a standard, like a eight inch diameter, if you will. I I kinda have difficulty making that loop on the bottom.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I wish I had a picture for you.

[Rep. Michael “Mike” Southworth (Member)]: Out of

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: What I mean, it can look a bunch of different ways, but one of the standard things you see is that the loop actually has a slight point to it at the bottom and it goes down so that you've got two, you've got the full loop. It's not just one and you curve it, that there's a point where it loops that's built into what you're inserting in the ground, and it goes down 400, 500 feet. So it's already looped before it enters into the ground. Right? You don't have

[Rep. Michael “Mike” Southworth (Member)]: to get the attachment, the base, it's like having the pump on the bottom of your well pipe. Yeah. That's all. Okay. Alright. I got

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: You're making me feel bad. I don't know more

[Rep. Kathleen James (Chair)]: about our regular I'm all set on.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I have one too. It ran dry.

[Rep. Kathleen James (Chair)]: It's terrible. But Do individual follow-up and answer Happy some questions about the schematics.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I think you all know where to find me, and I am happy to, have individual conversations anytime. Great. With that, I just wanna give you all, if it's okay, we can put a little history of the project because it relates to your work. So this project originated and we reached out to SharePoint Housing Trust back in 2022 because there was a federal grant that would allow us to explore the feasibility of a network system. So Champlain Housing Trust hopped on board and we built this collaboration with a group called Gas Technologies Institute, National Renewable Energy Labs, and Frontier Energy. We applied for a grant. That grant covered costs for we did a lot of community engagement in Pittsburgh, educating anybody who's interested about thermal energy networks and geothermal. It allowed us to do test boreholes to make sure that the ground was, you know, well suited for geothermal, most around here is. And it allowed us to do some initial design and costing of a system. It was a two staged grant. So that was phase one. We had this national partnership, we designed the system, and then, we had to go back to ask for phase two funding. We went back, we asked for phase two funding. We were awarded phase two funding in December 2024. And then the new administration came into office in January and all the funding froze. And we couldn't wait and see what was going to happen because we had to be really respectful of Champlain Housing Trust and Ever North's project timeline. So because that funding was frozen, we had to do a quick pivot. So this was originally thought up to be a network system, even though there's not that low diversity or waste heat I mentioned.

[Rep. Kathleen James (Chair)]: We were

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: gonna see, Does human behavior vary more than we think it does in our energy models? And if the government was gonna pay for it, because phase two would have covered the cost of the project for the most part, we were willing to take that risk. Fortunately, when the funding froze, we still had a really engaged partner with Champlain Housing Trust, and they were like, we wanna bring our residents geothermal, but it has to cost the same as had been proposed when you were getting this federal funding. So that was what forced our pivot and encouraged us to build this partnership with a group called Dandelion Energy who works with new housing developers on geothermal installations. And we remodeled the project. It's, I don't think Amy went into it. The initial stage of the project, those 36 units are in two sort of apartment multifamily buildings and then some townhomes, and we made it no longer networked, independent systems, and that was in an effort to bring down cost and make sure that we were able to provide this service to Champlain Housing Trust and its residents, at that original cost that they were comfortable with. So that forced us to flex. It also forced us to start thinking about how we wanna be able to offer these two different models of geothermal long term. So we sharpened our pencils and we evolved. And then I'll close with it's presenting us with a great opportunity to educate local developers, get them familiar with these systems. It's providing us with a path to upscale our employees. As I mentioned, I think those are the primary things. We'll also do the modeling that we touched upon and see how it compares with air source heat pump alternatives, so we can figure out what's going be most cost effective for what customer types moving forward. And then we'll, in an ideal world, grow the business if the customer experience and the cost is attractive. And this project, as Amy mentioned, should break ground this summer. So if we have people who wanna stop by, we could probably coordinate with DHT and you could see these drills in action. And then we have I mean, developers are really interested. We kind of put our flag out saying we were looking for pilot projects a couple of years ago and we were inundated and we had to slow down honestly because we couldn't address the demand initially. But we're looking to build back up to that again, and we've got a couple of projects we're working with developers on right now for network systems and non network systems, depending on the neighborhood type, that are in development. So hopefully this is just the beginning of a long term new service, remote gas services we'll be able to provide. That's all I got for you. Additional thought, questions?

[Rep. Bram Kleppner (Member)]: Yeah, I'm looking at the drawing here of the development, and when you say you went from network to individual, is it one well per building?

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: Excellent question. It varies a little bit depending on the number of units in the building, but the two multi family buildings with more units, they have four wells that all contribute to one loop, and then the interior equipment draws off the one shared loop. There's four holes in the ground. And then the townhouses, I believe are, and I could be wrong, one loop per home, per unit. So it's row houses. Got it. And that's how it will look. If you are looking at that picture, what's closest to you, those are the Champlain Housing Trust, Brooks Meadow Buildings. And then once you get past the two multi family buildings, the ones in the back are the Green Mountain Habitat for Humanity townhomes that will be next

[Rep. Michael “Mike” Southworth (Member)]: up. So cool.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: Oh, wow, you think so. I love that. I think so too.

[Rep. Kathleen James (Chair)]: You're a cabinet.

[Rep. Michael “Mike” Southworth (Member)]: So you spoke about the taxes on it. Is the town assessing these at a different rate than they would just a normal water well in the side of the house or on the lot?

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: I'm not the best person to speak to that. I just know that in all of our modeling, we do have to full property tax. I think we're we're more modeling after what Vermont Gas would pay on property tax on each property, but I could be wrong. So I don't have my two buddies here to support me. But it's a standard property tax equation Vermont Gas uses. We're applying it to geothermal. It does force us to charge customers more. And there are other states that have no property tax requirement for geothermal systems. I think in Vermont we have it for solar. I'm not sure. But some states got rid of that requirement to encourage more geothermal development. Rutland? Oh, I was just curious, I might have missed it. Do you have the ability to do these kinds of projects outside of your territory? I, you know, I think we would love to because, especially for new developments that are considering propane or fuel oil that are so costly. Think we'd love to, right now we have regulatory approval to work within five miles of our service line. And I also think we have, we do have, like there was a time where we did have permission to operate statewide, but we have no intention to expand our gap at the structure statewide. I don't know if that could be reapplied in a different context over time. It would be a conversation with regulators before we move forward with any projects outside of our footprint. Great.

[Rep. Kathleen James (Chair)]: Thank you so much for your time. Thanks, Rutland. Really appreciate you. It. Yeah, and sorry folks couldn't make it. But we appreciate it, that was super interesting. And for the committee, at this point, we don't have any testimony scheduled the rest of the week, but stay tuned, in case we add something. Great. Alright.

[Morgan Hood (Director of Product Management, Vermont Gas Systems)]: We're live live. Thank