Associated Industries of Vermont concerned about high cost of renewable energy requirements

From: William Driscoll [mailto:[email protected]]
Sent: Wednesday, March 21, 2012 4:24 PM
Subject: press release on renewable mandates bill, H. 468
Importance: High

For Immediate Release
March 21, 2012

Contact: William Driscoll, AIV Vice President, (802) 734 7556, [email protected]

24 Business, Economic Development, and Labor Organizations Oppose Renewable Mandates Bill

Concerns about High Costs, Questionable Benefits

Montpelier – Business, economic development, labor, and related organizations representing the full spectrum of the state’s economy and workforce today joined to express their opposition to H. 468, legislation imposing new renewable energy mandates on the state’s utilities. Associated Industries of Vermont, a leading voice on energy and economic issues representing the state’s manufacturers and related sectors, was joined by 23 other groups.

H. 468 was passed by the House of Representatives by a vote of 91 to 46 despite the lack of a well-vetted analysis of rate impacts and resulting economic consequences for the state.

The legislation now goes to the Senate, where the groups hope that the bill’s consequences for Vermont jobs, wages and benefits, and economic investment will be more thoroughly analyzed and debated. They continue to believe that Vermont’s already clean energy portfolio, extensive existing reliance on renewable energy, and growth in the renewable energy sector can be maintained without costly new mandates that would increase burdens on employers across the economy as a whole.

The text of a letter opposing H. 468 and the list of 24 organizations signing the letter follow:

PLEASE VOTE NO ON H. 468

Dear Legislators:

As organizations representing employers and employees across Vermont, we are writing to express our concerns about H. 468, which will increase renewable energy mandates on Vermont utilities through a Renewable Portfolio Standard (RPS) and related mechanisms.

H. 468 has been advanced with the stated goals of reducing greenhouse gas emissions and promoting the renewable energy sectors in Vermont’s economy. However, we are concerned that these otherwise laudable goals do not justify the costs entailed for Vermont employers and the economy as a whole. We believe that these goals can be achieved in a more cost effective manner.

Electricity costs, reliability, and quality are critical concerns for Vermont employers, especially high value employers who tend to be energy intensive. Average electric costs in Vermont for commercial and industrial customers have run 30% to 40% higher than the average in the other lower 48 states against which we compete for jobs, investment, and markets. Our rates are already increasing owing to factors including existing renewable energy mandates, the loss of Vermont Yankee power contracts, and looming regional reliability projects. Additional rate increases owing to new renewable energy mandates, particularly those that focus on smaller scale, less cost-effective and reliable generators, would exacerbate these increases.

Vermont already has one of the cleanest electric portfolios in the country, and more dependence on renewable energy than other states with an RPS are seeking to reach. Vermont utilities have pointed to existing regulatory requirements and market expectations to support the conclusion that Vermont’s dependence on renewable energy is unlikely to decline in any meaningful way going forward, even if no further renewable mandates are enacted.

Unfortunately, passing H. 468 would commit Vermont to a twenty-year policy that would lock us into even higher electric rates with only a very modest impact on greenhouse gas emissions, which on balance is not in the best interest of Vermont companies and working Vermonters and their families. Vermont can better promote our renewable energy sector through other economic development policies that could in fact benefit Vermont companies more broadly, and we can have a more cost-effective impact on our greenhouse gas emissions by looking to sources outside our electric portfolio.

Please vote no on H. 468.

Sincerely:

Associated General Contractors of Vermont
Associated Industries of Vermont
Barre Granite Association
Central Vermont Economic Development Corporation
Champlain Water District
Franklin County Industrial Development Corporation
Greater Burlington Industrial Corporation
Green Mountain Economic Development Corporation
Green Mountain Dairy Farmers Cooperative Federation
Home Builders and Remodelers Association of Vermont
International Brotherhood of Electrical Workers Local 300
Lake Champlain Regional Chamber of Commerce
Lamoille Economic Development Corporation
National Federation of Independent Business/VT
Rutland Economic Development Corporation
Vermont Business Roundtable
Vermont Chamber of Commerce
Vermont Energy Partnership
Vermont Farm Bureau
Vermont Fuel Dealers Association
Vermont Grocers’ Association
Vermont Ski Areas Association
Vermont Truck and Bus Association
Vermont Vehicle & Automotive Distributors Association

Comments

  1. Townsend Peters :

    Half a cent on rates more than a decade from now. The sky is falling!

  2. Renewable energy in Vermont is not about CO2 emissions reduction; Vermont already has one of the lowest emission rates per capita and per $ of GSP. Vermont’s CO2 emissions are primarily from buildings and transportation. Hence, increased energy efficiency should be done first.
    RE is about building RE businesses; one Vermont, multi-millionaire, solar oligarch told me: “I am trying to build a business here…..”. VPIRG splitting off a privately-owned solar entity, headed by former VPIRG leaders, will depend on subsidies and write-offs to succeed and the ER5 “investor” program. Those businesses would not exist without federal and state subsidies.
    State rules and regulations are changed, such as the RPS, so that these RE businesses can sell their intermittent, variable, uncompetitive, expensive, not-so-CO2-free energy to utilities that are required, by the RPS, to buy it at high above-market prices that are 3 to 5 times annual average grid prices.
    The resulting rate increases are much larger than they need to be, because the extra costs, including for transmission and distribution, the utilities will incur are rolled into the rate schedules. The utilities will come out ahead with larger than usual rate increases for their “cooperation” with the state.
    The defenseless, already-struggling, poorly-organized, easily-swayed households and businesses that are trying to cope with the multi-year Great Recession and the flood damage of Irene will bear the brunt of the burden; higher energy costs, increased costs of goods and services leading to lower living standards, lower profits, and lower tax collections.
    Subsidies usually SHIFT jobs from one sector to another; there is little NET job gain; there may be even be net job losses.
    In a slow-growing economy, the subsidized job creation in inefficient, expensive-energy-producing renewables sectors will result in up to 3.7 times the job destruction in other sectors due to scarce capital being diverted from more productive uses, such as energy efficiency, and due to more expensive energy increasing the prices of goods and services.
    There are numerous studies performed in Spain, Germany, Denmark, The UK, etc., and even by the Department of Public Service, VT-DPS, that show for each job created in renewables, there are 2 to 5 jobs lost in the private sector.
    Good RE job creation is a hoax:
    Wind turbines from Denmark and Spain (Lowell, Sheffield, etc.)
    PV panels from China
    Inverters from Germany.
    Wind turbine O&M is usually done by highly-paid out-of-state specialists.
    So-so RE job creation is for Vermonters consisting mostly assembling and installing.
    http://www.aei.org/article/energy-and-the-environment/the-myth-of-green-energy-jobs-the-european-experience/
    http://www.american.com/archive/2011/april/on-green-energy-renewable-energy-fails-to-green-the-u-k-economy
    http://publicservice.vermont.gov/planning/DPS%20White%20Paper%20Feed%20in%20Tariff.pdf

  3. Alex Barnham :

    Yes…these fears and allegations are as preposterous as to make Grandpa’s Knob seem like Mt Everest. Get a life…The Vermont Truck and Bus Association? You should be happy someone is finally taking the bus.

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