Committee starts over on renewable power bill

Rep. Tony Klein. VTD/Josh Larkin

Rep. Tony Klein. VTD/Josh Larkin

Legislation that would require utilities to purchase green energy will go back to the drawing board, according the chair of the House Committee on Natural Resources and Energy.

The bill, H.468, would have required utilities to purchase 80 percent of their power from qualifying renewable sources in 2025.

The bill set out ambitious goals for utilities, but after weeks of testimony, the second draft eased these qualifications by requiring 75 percent renewables by 2032. Thirty-five percent of those would have to come from “new” generation that came online after Dec. 31, 2004.

That draft, Rep. Tony Klein, D-E. Montpelier, said, is history.

“Where it would end up is by 2032 we would have a renewable portfolio standard, which would make all the techno geeks and academics happy,” he said. “Would it do anything? Not in my estimation. In my estimation we need to move faster. We need to move further.”

Klein’s bill would require utilities in Vermont to purchase renewable energy and retire the renewable energy credits. Under current law, utilities have to meet a percentage of their electric load from renewable energy projects. Power companies in Vermont can then sell the renewable energy credits. Other states require utilities to retire the credits.

Vermont is the only state in New England that does not distinguish between small and large hydroelectric projects and deems both types renewable.”

The result is lower rates, but because utilities in Vermont are double dipping, the power is considered “brown” power — even if it comes from something like a wind turbine. This is a result of selling the credits or “environmental attributes.”

Utilities and some business groups have lobbied for the ability to keep these credits. Requiring utilities to retire them in the state will raise costs for ratepayers, they claim.

The renewable energy bill has seen somewhat of a softening in recent weeks. Klein said he plans to go back to the original version of the legislation.

Klein said he plans to propose that “new” renewables include projects that go online in 2012, not 2005, and that by 2025 utilities carry 30 percent of these “new renewables” in their portfolio.

Klein said he plans to propose another “standard offer” for small renewable energy projects that will guarantee long-term contracts between producers and utilities.

Environmental groups have questioned what the Legislature plans to do about energy from large-scale hydroelectric projects like those in Quebec. Vermont is the only state in New England that does not distinguish between small and large hydroelectric projects and deems both types “renewable.”

Klein proposes limiting the “new renewable” category for these dams to those online after 2012 and limiting the amount of what a utility can claim in its portfolio as an even smaller percentage of that “green” power.

“Hydro-Quebec is never going to be able to build a new dam and say all the power they are selling to Vermont came from that dam,” Klein said.

The concern among environmentalists has been that energy from Hydro-Quebec would essentially flood the New England market and produce an abundance of cheap renewable energy credits, undermining the entire accounting system for renewable energy credits.

As for these renewable energy credits, which utilities currently sell in large part to Massachusetts or Connecticut, they must be paired with the electricity at least for new projects, Klein said.

Klein said people should expect new proposals soon.

“We were not happy with the first two drafts,” he said. “They were way too complex, way too long and they did not deliver enough.”

While Klein and his committee got kudos from some local businesses at a press conference Thursday by Renewable Energy Vermont, at least one business group said the legislation goes too far.

Bill Driscoll, vice president of the Associated Industries of Vermont, said the proposed legislation raises cost and reliability concerns.

Excluding Hawaii and Alaska, Driscoll said, commercial industrial electric rates are already more expensive than most other states.

“Why are we trying to make things more expensive and more risky for businesses,” he said.

With Vermont’s small size and limited industry, Driscoll said, it absorbs more carbon than it emits. That’s according to a study by the Douglas administration three years ago.

With programs like the standard offer, Vermont already has a great deal of renewable generation, Driscoll said, and more small renewable projects can lead to reliability issues in addition to the increased costs.

Alan Panebaker

Comments

  1. Rep. Klein is all over the lot with his versions of renewable purchase standard, RPS; first it is 80%; then after adverse comments it is 75%; then after more adverse comments it is 30%.
    Why does he need advisors, such as Jochen Flasbarth from Germany (who is the hot seat at present because of Germany’s rethinking of renewables) and Bill McKibben, a far-out renewables activist, trained as a journalist.
    Could it be Rep. Klein is too zealous trying to please the environmental community at the expense of Vermont’s households and businesses and not really understanding the economic and technical implications.
    What is being proposed is a renewables-oligarchy’s dream so they can sell their somewhat-CO2-free, high-cost, variable, intermittent energy at high prices to utilities which will be REQUIRED to buy it (per RPS) for whatever price, whenever offered.
    This will benefit the top 1% with tax LLC shelters at the expense of the bottom 99% whose “benefit” will be higher electric rates for already-strapped households and businesses.
    Does Rep. Klein not know there is a Great Recession in Vermont and that Irene was a big setback?
    That households and businesses are skimping in many ways just to survive?
    That electricity use is down due to that skimping and maybe some energy efficiency efforts?
    That birthrates in Vermont and New Hampshire have sharply declined since 2008 which usually happens during a depression or wartime?

  2. Lance Hagen :

    Unless I am missing something, it appears that Mr. Klein’s version (or in case versions) of a renewable power bill has, absolutely, no consideration for the price the rate payers will need to pay. It basically forces utilities to purchase power from renewable, to meet a targeted level, without any conditions on price.

    It would be easy to add a condition, to any legislation, that the price, at some point in time, for renewable energy is within a set percentage from the price on non-renewable energy. In this way it would drive the renewable energy industry to work on reducing costs.

    With the existing system the renewable energy industry is living off of subsidies and guaranteed profits. There is no driving force, in the existing legislation, to lower the cost of renewable power, which at this time is not cost competitive.

  3. Coleman Dunnar :

    Rep. Klein, is right when he said. “In my estimation we need to move faster. We need to move further.” If we move too deliberatively the average rate payer will eventually catch on to the fact that he/she is paying almost six times current market (3.5cents) for some of these renewables priced at 27 cents for solar and 24cents for wind under the current SPEED program (is it a coincidence the acronym for the program is “SPEED”?). Yes let us rush into these long term contracts at these grossly above market prices. Haven’t we learned anything from our experience with the PURPA contracts. Guess not Rep. Klein is probably planning a deal to secure another sweet heart deal and having rate payers pay again for projects they have already paid dearly for. November can’t come too soon.

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