Shumlin says renewable energy program will be good for business

Gov. Peter Shumlin gives a speech with lawmakers and renewable energy advocates at a bill signing in East Montpelier.

Gov. Peter Shumlin gives a speech with lawmakers and renewable energy advocates at a bill signing in East Montpelier.

Gov. Peter Shumlin touted Vermont’s progress in the renewable energy field with the signing of three bills at a small hydroelectric and solar project Friday.

The 2012 energy bill, the most prominent of the three, will more than double the amount of favorable contracts available for small in-state renewable energy projects. That bill also holds a provision that will allow utility customers to opt out of “smart meters” free of charge.

That “standard offer” program guarantees above-market power contracts for 127.5 megawatts of local projects such as solar and hydro projects. Currently the program allows for 50 megawatts, and fewer than 10 are built.

Various heads of renewable energy companies showed up to support the bill.

Shumlin said it will be good for business.

“I think the proof that Vermont is getting this right is in the simple fact that Department of Labor statistics show that Vermont has more green high-tech jobs per capita than any state in the nation,” he said. “We are getting this right.”

This year’s energy bill ensures a guaranteed price for renewable projects that produce less than 2.2 megawatts of electricity — lending stability to the often struggling renewable power industry.

It falls short of requiring utilities to purchase and account for a set amount of renewable energy through what is called a renewable portfolio standard.

A renewable portfolio standard would have required 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.

That part of the bill came out during the final few days of the legislative session when it appeared the energy bill might not survive at all. The shift came amid persistent pressure from large industry groups arguing it would increase electric rates an unreasonable amount.

Shumlin said he has reservations about the renewable requirement from the beginning.

“I have concerns about walking the tightrope between building our renewables and keeping our current electric rates low,” he said. “Because we know there’s no greater job motivator than affordable electricity, I thought it made more sense to go with a predictable standard offer and leave the renewable portfolio standard for another day.”

The fundamental difference between the two approaches is that one requires utilities to buy a set amount of renewable energy (it would have been 35 percent by 2032), and the other allows developers to apply for the favorable contracts in the standard offer while letting utilities sell credits from that energy to other states that have renewable portfolio standards.

Tony Klein, chair of the House Committee on Natural Resources and Energy, said when it comes to getting projects built in Vermont, the standard offer is more efficient.

“The standard offer really builds real things,” Klein said. “An RPS [renewable portfolio standard] doesn’t build anything. It’s just an academic accounting system.”

Some environmental groups disagree.

Ben Walsh, an energy advocate for the Vermont Public Interest Research Group, said the standard offer will help incentivize more in-state projects, but Vermont should have an accounting mechanism also.

“The renewable portfolio standard not being included was a blow for clean energy,” Walsh said. “A complete energy policy would include an RPS.”

Others think the law goes too far and will cause spikes in energy costs for ratepayers.

Guy Page, communications director for the Vermont Energy Partnership, a coalition of businesses that supports the continued operation of the Vermont Yankee nuclear power plant, said the stability provided for renewables in the 20-year contract is a good thing for the renewable industry, it seems like an artificial cost hike that ratepayers will have to swallow.

In its tumultuous journey through the Statehouse, the energy bill became part of another bill dealing with smart meters — which offer more accurate and timely data on energy usage than traditional analog meters.

The state’s two largest utilities plan to roll out the meters as part of efforts to reduce peak electric demand, when power is most expensive and comes from the dirtiest sources.

Utilities had planned to charge customers $10 a month who opted out of the technology. Some customers have expressed concerns over the radio frequencies emitted by the meters and potential privacy issues. Under the bill signed Friday, customers will be able to opt out without having to pay the charge.

Gov. Shumlin said he was “pro-choice” on the issue but thought Vermonters would opt in once they realized the smart meters could save them money on their energy bills.

“I’m firmly pro-choice when it comes to lots of issues,” Shumlin said. “I do believe inevitably Vermonters should decided what kind of meters they want on their home. Having said that, I think when Vermonters figure out the extraordinary energy efficiency and money saved they can get from utilizing smart meters, they’ll adopt smart meters.”

Klein was more adamant about his opposition to the fee.

“I think that if smart meters are so wonderful, and they’re going to save so many people and the industry so much money why are they whining and complaining about a few people keeping what they have,” Klein said. “The point is they should be able to keep what they have.”

The governor also re-signed bills dealing with expedited permitting for small hydroelectric projects and creating a uniform tax for solar plants.

Alan Panebaker

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14 Comments on "Shumlin says renewable energy program will be good for business"

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Townsend Peters
4 years 2 months ago

Rep. Klein ought to be horsewhipped for calling a renewable portfolio standard an “academic accounting mechanism” because he knows better.

We get power from the New England grid, period. What parts of that power are attributed to Vermont are based on what we pay for. If we don’t pay for the “renewable” attributes of the power, then we aren’t buying renewable power. Instead, we are just buying expensive brown power.

It’s not an “accounting mechanism.” It’s called “follow the money.”

Hilton Dier
4 years 2 months ago
Mr. Peters, please tone it down. “Horsewhipped”? How about “reprimanded.” Yes, I know, hyperbole, figure of speech, but still… Prediction for Mr. Page: Well before the end of the 20 year contracts the standard offer price is going to look cheap. The present natural gas glut is temporary, as are the low prices. The present price for natural gas is about a third of what it has to be for profitable shale gas production. Shale gas producers are losing money and shutting down drilling rigs. The end of Megatons to Megawatts in 2013 will leave the nuclear industry with a… Read more »
Townsend Peters
4 years 2 months ago

No, “reprimanded” is not sufficient to convey the sentiment. Rep. Klein is misleading the public. He should and does know better.

Rob Macgregor
4 years 2 months ago

Hilton – thank you for your perceptive post. It bears elaboration that all indications are that we have not really learned the lessons of peak oil, and that we will squander our current reserves of “cheap” natural gas in much the same way as we have been wasting oil. With it’s attendant carbon and methane loading as well…… all while rationalizing that it’s too expensive to build out renewables when natural gas is so much cheaper…

4 years 2 months ago
The failure to address selling the Renewable Energy Credits (RECs) for projects that meet SPEED program requirements means that Vermont’s renewable energy program remains a sham. The greatest offenders are Green Mountain Power (GMP) and Burlington Electric Department (BED). Both are meeting their renewable energy goals on the backs of rural Vermonters, claiming they are creating renewable energy for their customers but then bragging about selling the RECs out of state. This enables polluting fossil fuel burning plants to continue operating, gives neighboring New England states the opportunity to meet their legitimate Renewable Portfolio Standards (RPS), and means Vermonters are… Read more »
David Dempsey
4 years 2 months ago

Shumlin said “I’m firmly pro choice when it comes to lots of issues” when he talked about the law he signed that prohibits the power companies from charging a monthly fee for rate payers who opt out of getting the smart meters. I guess the choice of where Vermonters get their health care insurance isn’t one of those many issues.

Chuck Lacy
4 years 2 months ago

Could someone provide a lay persons explanation of these REC’s and how they work?

Kevin Jones
4 years 2 months ago
I generally have to agree with Townsend Peters and Annette Smith. Tony Klein is absolutely wrong in calling an RPS and renewable energy credits (RECs) an academic accounting system. Far from being academic RECs are fundamental to energy law. Almost all commercial renewable energy projects in Vermont, consistent with the law Governor Shumlin just signed and Rep Klein supports register with the RPS programs in neighboring states and sell their RECs to the customers in those states. Renewable portfolio standards and the RECs that they require are an essential financial component of renewable energy projects across the country. Both the… Read more »
4 years 2 months ago
Thanks to the passage of S.214, our legislators set a precedent for our nation in dealing with the wireless smartmeter scourge. We are the no fee beacon on the hill. Rep. Tony Klein and others upheld our rights as individuals to preserve our health and privacy without having to pay to do so. As fraudulent claims by utilities wear thin, mounting evidence shows increasing health problems associated with the continuous RF exposure from wireless smartmeters, not to mention privacy issues, fires, hacking and exorbitant billing. Green-washing won’t camouflage microwave pollution, especially invidious because it’s invisible. Incidentally, the Itron wireless smartmeters… Read more »
Kevin Jones
4 years 2 months ago
Chuck A renewable energy credit (REC) is created for every MWH of generation by a renewable energy facility (wind, solar, etc.). Since electricity injected into the electric grid follows the path of least resistance and cannot be directed to any party RECs are the legal and accounting means for tracking who paid for renewable generation and who can claim to receive it. One of the market goals for RECs is to make sure that utilities and other competitive energy suppliers do not double count the out put from a renewable generator and try to sell the same output to more… Read more »
4 years 2 months ago
Because of federal and state subsidies, various states are getting increasingly involved in the energy business and making their economies less efficient while struggling households and businesses are dealing with the setbacks of the Great Recession and Irene. This involvement not only adds just another cost layer of more or less inefficient state administration, but the political-doling-out of subsidies creates RE projects that are inefficient; (high $/installed kW, high $/kWh, low capacity factors, little production, kWh/yr. Such projects would would not attract any financing because of their poor returns. Regarding RECs. Why not abolish RECs? It would simplify matters and… Read more »
4 years 2 months ago
Thanks to the passage of S.214, our legislators set a precedent for our nation in dealing with the wireless smartmeters scourge. We are the no fee beacon on the hill. Rep. Tony Klein and others upheld our rights as individuals to preserve our health and privacy without having to pay to do so. As fraudulent claims by utilities wear thin, mounting evidence shows increasing health problems associated with the continuos RF exposure from wireless smartmeters, not to mention privacy issues, fires, hacking and exorbitant billing. Green-washing won’t camouflage microwave pollution, particularly invidious because it’s invisible. Incidentally, the Itron wireless smartmeters… Read more »
4 years 2 months ago
“Regarding RECs. Why not abolish RECs? It would simplify matters and reduce shenanigans.” The term “shenanigans” deserves and explanation. Some renewable energy technologies are better than others at reducing CO2. But one REC is issued for one MWh. It would be better, if one REC were issued for the actual CO2 reduced by that MWh. That means measured CO2 quantities, not estimates. Energy systems engineers, with decades of experience analyzing energy systems, have analyzed the real-time, 1/4-hour grid operations data published by EirGrid, manager of the Irish grid: – CO2 emissions – wind energy produced – total energy produced The… Read more »
Phil Arbolino
4 years 2 months ago
Just read an article on boston.com about solar in CT. and I am re-affirmed as to why we need to stop letting the environmentalists shape public policy. The article quotes a guy who is “leasing” solar panels on his house. It states that it can cost up to $35,000 to have a solar array installed. He can’t come up with that kind of money (who can!?) hence the lease. By the way, he’s quoted as saying that he’s not doing it to save on his electric bill, but because he wants to be environmentally conscious. The monthly savings on his… Read more »
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