Vermont Energy Partnership: Generation tax increase would expose Vermont taxpayers to risk, set bad precedent

For immediate release
April 26, 2012

Contact
Guy Page
Phone: 802-505-0448
Email: [email protected]

Montpelier, VT/April 25, 2012 – The Vermont Energy Partnership urges the Vermont Senate to reject the $7.5 million tax increase the Shumlin Administration is trying to impose on Vermont Yankee. The Administration’s proposal is contained in the Miscellaneous Tax Bill (H. 782) which the Senate Finance Committee has approved.

This $7.5 million tax hike will create legal risks for Vermont taxpayers, create an unfair and unwelcome precedent for taxing businesses in the state, and threaten the loss of 600 high-quality jobs and $100 million a year from the Vermont economy.

The Administration continues its efforts to shut Vermont Yankee down, only this time it is by taxing VY out of business. To target one company with a 140 percent increase is punitive and the Vermont Senate should reject it. That is not the way we do business in Vermont.

Vermont Assistant Attorney General Scott Kline, in testimony before the Senate Finance Committee last week said, “If you decide to go forward and increase (the tax), you should be aware that we think there is a risk associated with that.”

The Vermont Energy Partnership hopes that fairness and common sense will prevail in the Senate and that this proposal from the Shumlin Administration will be defeated. To do otherwise could open the door again to more law suits involving the state and more costs for Vermont taxpayers.

Last year a Vermont federal judge ruled the state legislature has illegally interfered with the renewal of Vermont Yankee’s federal operating license. That ruling is currently under appeal.

The state says the proposed generation tax increase merely replaces the Clean Energy Development Fund assessment, but in fact, that assessment was based on two memorandums of understanding (MOUs), one with an agreed upon cap on the total amount of payments. The other only requires a further payment if power prices are higher than a specified amount in the MOU, which is not the case today.

Vermonters will not accept another round of legal bills and millions of dollars in additional penalties caused by the legislature’s lack of planning for the continuation of the Vermont Clean Energy Development Fund (CEDF). The future funding of the CEDF requires long-term, sustainable planning, not a fruitless, end-of-session money grab from a single source that is virtually guaranteed to face intense legal scrutiny.

The proposed tax increase sends Vermont down a slippery slope for singling out specific employers for legislative retribution through tax policy. This will not go unnoticed. Other manufacturers and employers will conclude, justifiably, ‘this year it is Vermont Yankee, next year it could be our turn.’ Their expectation of fair, stable, nonpolitical taxation, as the Vermont way of doing business and public policy, so essential for planning for a healthy future, will be eroded. Tax policy relies in part on precedent: what survived unchallenged before will be tried again.

In light of the above, the Vermont Energy Partnership recommends that the legislature:

Abandon the $7.5 million generation tax increase for a less risky, more equitable solution; and
Continue the ongoing policy discussion of creative, broad-based Vermont Clean Energy Development Fund funding sources, as well as spending goals.

Comments

  1. Gary Sachs :

    Mr Page.

    Your bully pulpit, your authority is challenged. Your position is one of Entergy supporter from a distance. VT energy partnership is an offshoot of Entergy back when Entergy was convincing the state of something- the benefit to the state of running the 36 year old reactor at 120%, or how great it is for VT to have 90 ton independent spent fuel storage casks outside the reactor on the Connecticut river banks.
    Go on – speak as impartial. Consider yourself called out.

  2. Russell Aminzade :

    What a huge, stinking load of manure this press release is!

    Most of this “new tax” replaces the money that Entergy had promised to pay to the Clean Energy Development Fund before it unilaterally decided to throw out all of its agreements with the State of Vermont and continue operating without a permit.

    Huge Tax Increase!!! Next Year it could be your turn!!! OMG!!! Just how dumb do Entergy and its hired guns think Vermonters are?

  3. Bob Stannard :

    The electrical generation tax was first established in 1972 when the plant was brought on-line. It was modified in ’99 when the state adopted a state-wide education tax.

    The tax rate on the VY plant was well below average, because in ’02 Vermont was getting a pretty good deal on power.

    However, in 2010 we learned that Entergy officials had lied to us under oath. Their plant leaked and both plant and corporation were showing signs of not being reliable. Then Entergy sued. Then Entergy stopped selling power to us.

    Then why should Vermont continue to give this corporation, that has clearly shown they cannot bargain in good faith and keep a promise? They shouldn’t. What is now being proposed is to bring the rate on par with neighboring states. The rate is still 17% below what we charge electrical generators from other, alternative sources such as wind. In addition, we are still letting this plant dump 105 degree water into the Ct. River so that they can save money by not using their cooling towers year round.

    The only real question is after all of the mistreatment exhibited by Entergy is Vermont still willing to give this rogue plant a break?

  4. Alex Barnham :

    Guy, we’re all on the same page…you do not represent the health and well-being of Vermonters.

  5. Steven Farnham :

    We should be concerned about cited “memorandums of understanding,” as if Entergy Nuclear has been a pillar of compliance with other agreements it has entered into with the state of Vermont that bind Entergy to certain provisions in the State’s favour.

    If you think selectively taxing is something new, I have two words for you: Alcohol and Tobacco. We have a long tradition of taxing that which we consider to be a luxury, undesirable, or both. So don’t give me that “unwelcome precedent” nonsense.

    Since no part of Vermont is contracted buy any of VY’s power at this juncture, and since the State of Vermont has made it known that it wants VY shut down, then it is an extraordinary privilege for Entergy to continue operation here. It is about time Entergy acts accordingly, and stops hiring their paid guns to bully and intimidate us.

    We elected our state officials based (among other things) on their campaign promises. I encourage them to deliver on their commitment to shut down VY, using any means at their disposal, including taxation, denial of certificate of public good, denial of access to the grid, and/or denial of access to any other part of public infrastructure. The state of Vermont belongs to its citizens, not to invasive corporate parasites.

  6. Coleman Dunnar :

    Here we go again – The legislature must really get a kick out of seeing Sorrell defend an in defensible position in court.
    The Clean Energy Development Fund – all good things must come to an end. A time comes when you have to end the subsidies. Billions worldwide have been spent in subsidizing RE, this not infant industry needing a little help to take its first steps but a mature technologies which that cannot sustain itself without being wastefully overly fed . Europe has awakened to the folly now it’s time for Vermont to do the same. I have a dream that someday I might see some media report the words “Vermont a friendly place to do business”.

    • Doug Hoffer :

      Vermont’s rate of job growth over the last 10 years is greater than MI, OH, IL, RI, CT, NJ, MO, MA, WI, ME, CA, IN, AL, KS, GA, DE and MN. I guess that means all those states are anti-business.

      And btw – Vermont’s rate was 0.7% and our supposedly business friendly neighbor NH was only 1.1%.

      And there are 22 states that lost a higher percentage of jobs than Vermont to domestic relocation from 1994 – 2008.

      The media may not say those words but the facts tell a very different story than you’ve heard.

      • How does Vermont rate regarding average household income? In New England, Vermont is second lowest in household income, after Maine.

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