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 PanebakerAlan Panebaker

Comments

  1. Townsend Peters :

    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.”

  2. Hilton Dier :

    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 13% shortfall in worldwide uranium production. The price of uranium will go up until 13% of demand (nuclear capacity) goes away, which means 2.5% of total U.S. generating capacity.

    Even net coal energy production is going down. We’re getting slightly more tonnage out of the ground every year, but the grade of that coal (energy per ton) is going down as the energy cost of getting it out of the ground is going up.

    Geology (which doesn’t care about us) dictates a renewable energy future and a fossil/nuclear shortfall. The only question is whether we steer a new course now, or wait till we hit the wall and then try to pick up the pieces.

    • Townsend Peters :

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

    • Rob Macgregor :

      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…

  3. 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 getting brown power unless they pay extra for a program like Cow Power.

    Legislators took testimony on this issue and chose to ignore it. Why?

    The Public Service Board (PSB) addressed the issue in its Certificate of Public Good (CPG) for the Lowell wind project. Read pages 153 to 156 of this document http://psb.vermont.gov/sites/psb/files/orders/2011/7628FinalOrder%20CPG%20Attachment%20A-2.pdf in which the PSB adopted the recommendation of the Department of Public Service (DPS) which says:

    “Petitioner agrees that it will not sell any renewable energy credits (RECs) or other environmental attributes directly attributable to the Project’s electrical production to more than one consumer, or make any claims regarding those disaggregated attributes in any marketing or advertising if it has sold those disaggregated attributes.”

    Now BED is negotiating to purchase power from the Grandpa’s Knob Wind project, it is the sole purchaser of the Georgia Mountain wind project, it voted in March to begin the process of purchasing the development rights of the Georgia Mountain wind project which David Blittersdorf recently purchased and construction was started without any notice to neighbors who are extremely upset about such rude treatment by everyone involved, and BED is also purchasing electricity from the Sheffield wind project.

    BED is meeting its goal of getting 100% of its power by 2016 by destroying the environment, quality of life, property values, and health of thousands of Vermonters, and then bragging about selling the RECs to keep the rates down. “At BED the creation and sale of RECs are an important part of our clean energy strategy, so finding effective ways to bring these assets to market is a priority,” said Ken Nolan, Director of Resource Planning at BED. http://vermontbiz.com/news/april/burlington-electric-sells-renewable-energy-certificates. He also supports wind development on state lands http://www.burlingtonelectric.com/ELBO/assets/Nolan%20op-ed-1-27-09.pdf.

    In all of BED’s Power Purchase Agreements (PPAs) for wind power, the cost of the power is confidential. The only PPA cost known to the public is GMP’s Lowell wind project because it is a public utility so it must be disclosed. But at 10-12 cents/kilowatthour (kwh) it is more than twice the price of grid power, of which there is a glut that is expected to last for a decade. Vermont Electric Coop’s (VEC)’s CEO, David Hallquist, recently lamented that VEC could be meeting its renewable energy goals by purchasing grid power at market price and also purchasing RECs, and that power cost would be much lower than the power that VEC has contracted for long-term from the Lowell wind project, which is already likely to be more expensive than the PSB heard testimony about in the technical hearings.

    Chittenden County residents usually poll the highest in support of wind energy. Time to get out to the mountains in West Rutland, Milton, Sutton, the neighborhoods where your brown power is coming from, and see the cost your utility is inflicting on so many Vermonters while you are not really getting the renewable energy benefits while being told you are getting green power. It appears that BED’s ratepayers are either not paying attention or are okay with getting sold a bill of brown goods painted green.

  4. David Dempsey :

    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.

  5. Chuck Lacy :

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

  6. Kevin Jones :

    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 American Wind Energy Association and American Solar Energy Association support state RPS requirements and renewable energy accounting systems. Furthermore the chairs of the energy committees across New England and New York would disagree with Rep. Klien that an RPS is an academic accounting system. Vermont renewable energy projects rely on the revenue from the sale of RECs except that in Vermont almost all of the projects sell the RECs to out of state utilities not Vermont utilities. This means that legally (not just academically) this renewable energy is sold to customers outside of Vermont and as a result these projects are not a net benefit to the global climate since they are counted toward renewable energy requirements in surrounding states rather than renewable energy for Vermont customers. In fact if Vermont utilities sell the RECs for projects such as Kingdom Community Wind out of state (as GMP and Vermont Electic Coop have claimed in regulatory filings) then they cannot claim that they are buying wind energy or renewable energy for their customers or those would be false claims and in violation of Federal Trade Commission guidelines (yes that is right in violation of federal guidelines). Furthermore if VEC or GMP were to print on their customers bills the environmental attributes for this power that they paid above market prices for they would have to show that it is brown power (the residual mix from the New England market would would consist of coal, oil, gas, and nuclear power). So Representative Klein as you can see is quite wrong in calling this “academic”. Rather than being academic Rep. Klein, the Vermont legislature, and unfortunately Governor Shumlin, continue to support energy policies that raise both commercial and residential rates but do nothing beneficial for the global climate. Vermont is the only state in the union with such a dysfunctional energy policy and we should all call our legislators and the Governor and ask them to stop this expensive charade. Both the global climate and our economy are too important to waste our resources for no environmental benefit.

  7. 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 cost $200 a piece, a cost borne by ALL rate-payers, according to CVPS VP Brian Keefe, including those who choose to opt out.
    What was the DOE $69 million for? Perhaps it will merge with the $21 million in that happy shell game known as weatherization… Vermont was first to ban fracking, the next step is a statewide wireless smartmeter moratorium.

  8. Kevin Jones :

    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 than one customer. For all of the New England States renewable energy credits are tracked by ISO-NE which is the regional grid operator. RECs allow a competitive and liquid market for renewable energy and are the currency used by the 29 states that have renewable portfolio standards. RECs can also be used in green power programs such as the CVPS CowPower program. If a customer buys 100 Kwh of CowPower then CVPS would retire a similar number of RECs from their farm methane suppliers. If an entity claims to sell renewable energy to a customer but does not buy and retire that number of RECs then they would be in violation of the FTCs green guides and making false claims is a big deal.

    The VT SPEED and Standard offer programs, unlike every other state renewable program I am aware of,do not require the retirement of RECs so Vermonts utilities largely sell them out of state to meet other state’s renewable requirements. This is why Vermont utilities should not call most of the large wind or renewable energy projects in VT renewable energy for Vermonters and why these programs provide no net carbon benefit. It is akin to the state subsidizing the construction of private schools in VT and then having those schools filled with tuition students fron Connecticutt. It is bad public policy and inconsistent with what all our neighboring states do.

  9. 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 reduce shenanigans.

    Would it not be much better to reduce CO2 emissions more effectively by increased energy efficiency? Why do politicians not emphasize EE, instead of propping up RE projects.

    According to the VT-DPS, the 50 MW SPEED program has fallen far short of its goal of building 50 MW of RE projects for about $228.4 million. After 3 years, just 7.1 MW of RE projects costing about $32 million has been built, and is producing just a tiny quantity of energy, and has created only about 3-5 NET jobs. To make matters worse, the state, in the new energy bill, expanded the SPEED program to 127.5 MW. The mantra seems to be: If it fails, just throw more money at it.

    RE promoters and politicians often tout job creation by RE projects, but do not mention the jobs lost in others sectors of the economy.

    Economists have used standard input-output analysis programs for at least 40 years to the determine the plusses and minuses of various economic activities. Numerous studies, using such economic analysis programs, performed in Spain, Italy, Denmark, England, etc., show for every job created in the RE sector, about 2-5 times jobs are destroyed in the other sectors. These nations started RE about 10 years before the US and learned some lessons.

    For every 3 green jobs created in the private sector, 1 job is created in government, but, as a general rule, for every job created in government about 2 jobs are destroyed in the private sector, largely due to added economic inefficiencies; no one would claim government is more efficient than the private sector.

    Such job creation is unsustainable. Whether these government jobs are good or bad, needed or not needed, is irrelevant.
    http://vtdigger.org/2012/03/27/digger-tidbits-vermont-ranks-no-1-in-green-job-survey-early-out-for-obama-event-sanders-no-1-congressman-on-twitter/#comment-32109

    Note: This is not the case with increased energy efficiency subsidies. They create jobs in the EE sector, but also create a net increase of jobs in the other sectors, because the reduction of energy costs enables more spending on other goods and services.

  10. 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 cost $200 a piece, a cost borne by ALL rate-payers, according to CVPS VP Brian Keefe, including those who choose to opt out.
    What was the DOE $69 million for? Perhaps it will merge with the $21 million CVPS owes rate-payers, in that happy shell game known as weatherization…
    Vermont was first to ban fracking, the next step is a statewide wireless smartmeter moratorium.

  11. “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 engineers were expecting a CO2 emissions reduction of 80 to 90 % of the expected value.

    However, they were surprised that these measured data showed so little a reduction of CO2 emissions compared to what was expected.

    For example: It was found that 12% of wind energy on the grid caused only a 4% reduction of CO2 emissions, i.e., the CO2 emissions reduction was only one third of the reduction expected for this share of wind energy. See Section 4. of http://www.clepair.net/IerlandUdo.html 

    The above situation has led to a spell of deception and delusion.

    The Deception: The above shows that way too many RECs are being granted to RE producers than is warented based on the CO2 reduction. And that, my friend, is not a mere “academic accounting system”, according to Klein who is leading Vermont into energy la-la-land.

    The Delusion: Vermonters have been led to believe they are “doing something about climate change” with RE. It turns out the net effect is much less.

    If it any consolation, Europeans, especially the Germans, have been under the same spell.

    http://theenergycollective.com/willem-post/64492/wind-energy-reduces-co2-emissions-few-percent
    http://www.clepair.net/IerlandUdo.html
    http://docs.wind-watch.org/BENTEK-How-Less-Became-More.pdf
    http://www.clepair.net/windSchiphol.html
    http://www.clepair.net/Udo-okt-e.html
    http://www.clepair.net/Udo-curtail201205.html

  12. Phil Arbolino :

    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 bill?

    $20.

    You do the math.

    http://articles.boston.com/2012-05-20/news/31790228_1_solar-panels-clean-energy-finance-solar-power

Comments

*

Comment policy Privacy policy
Thanks for reporting an error with the story, "Shumlin says renewable energy program will be good for business"