GlobalFoundries and GMP working toward lower electricity costs
Like many companies, GlobalFoundries is looking to cut costs to stay competitive. One plan is to close a spending gap on electricity costs.
"Cost is a major competitive item for us as a company," said Dale Miller, GlobalFoundries Senior Site Executive.
GF is the number one energy consumer in Vermont. Every year, the Essex campus, also known as Fab 9, consumes 400 million kilowatt-hours of electricity. Miller says that's more than the City of Burlington annually.
That energy use, will cost $38 million dollars just this year, up from $35.5 million in 2017.
That rate GF pays in Vermont is 84% higher than rates at the Malta, and East Fishkill NY locations.
"If we were in New York, we would be spending $15 to $20 million less. So that's a significant disadvantage for us," said Miller.
So they decided to team up with Green Mountain Power.
"GlobalFoundaries said to us, what they really need is predictability and stability in their rates," said Kristin Carlson, Vice President of GMP.
Though a preliminary deal, GF'S rate will drop by 2.73 percent in January of 2019 and will stay that way through September of 2022.
Fab 9 agrees to maintain its energy use, but in return, will give up its federal tax credits to benefit GMP users.
"Our customers were set to see about a half a percent bill decrease in the upcoming year, because of that it's going, and a few other factors it's going to probably more than double to almost a 1 percent decrease," said Carlson.
Miller says while the company is satisfied with the deal, it's already planning Phase 2, trying to lower its electricity costs.
GMP knows how important the company is to the state's economy and plans to come back to the table at the end of the three year deal.
"It shows their commitment to Vermont, it shows their commitment to staying strong in this state and to protecting those really important 2500 manufacturing jobs in way that benefits every customer we serve," Carlson said.
The power is now in the hands of state regulators who have to review and approve the deal.