Senate energy committee OKs bill on public input on energy project siting review

A bill designed to increase local involvement in the review process for energy projects was endorsed by a Senate committee Wednesday.

By a 4-1 vote, the Senate Natural Resources and Energy Committee approved S.201, a bill that would give communities hosting new energy projects more say in the Public Service Board’s review process.

“I think it’s a very good planning bill and a good democracy bill,” said Sen. Bob Hartwell, D-Bennington, chair of the committee. “It makes it much easier for people to participate in the siting process.”

The bill is a response to concerns that local communities have little say in the board’s approval process for energy projects, which is, in part, guided by statewide renewable energy goals.

Sen. Diane Snelling, R-Chittenden, and Sen. Bob Hartwell, D-Bennington, heard testimony on whether to regulate the state’s shorelands during a public hearing Wednesday night in Montpelier. Both serve on the Natural Resources and Energy Committee. Photo by John Herrick/VTDigger

Sen. Diane Snelling, R-Chittenden, and Sen. Bob Hartwell, D-Bennington, members of the Natural Resources and Energy Committee, hearing testimony in January. Photo by John Herrick/VTDigger

“It clearly sets a much better process for siting rather than having the unpleasantness associated with the system now,” said Hartwell, who backed a failed moratorium on large-scale wind projects last year. “And it puts Vermonters back in charge of where they want things to go.”

But environmental groups say the bill slows the state’s progress toward meeting its clean energy targets.

“The fundamental purpose of the bill is to make it more difficult to build renewable energy projects in the state,” said Paul Burns, executive director of Vermont Public Interest Research Group.

The bill requires the Public Service Board to consider regional energy plans when deciding whether to approve projects. But the bill does not give local planners guidance on how to align their plans with the state’s renewable energy goals, Burns said.

The state’s nonbinding Comprehensive Energy Plan sets a goal for the state to be powered by 90 percent renewable energy sources by 2050.

Burns said he believes the bill will not pass a full Senate vote. He said lawmakers should create policy to support renewables and energy efficiency.

The bill also requires developers to present the board with a full carbon cycle analysis of the project – the emissions created during construction and operation.

Sen. John Rodgers, D-Essex/Orleans, said construction of renewable energy projects, such as industrial-scale ridgeline wind, can be energy intensive.

“And so I think there should be a full accounting so that the public can say, ‘Yes, look at all the energy we wasted there, maybe we should be doing it in another way,’” he said during an earlier committee meeting.

Sen. Diane Snelling, R-Chittenden, vice chair of the committee, voted against the legislation. She said she supports better planning for energy projects, but the bill did not make the point clear.

“I believe that we need to have solid legislation that is thought through sufficiently so that it doesn’t have unintended consequences,” she said.

The bill includes an application fee that increases with the size of the project. Net-metering systems, which residents use to generate their own electricity, are exempt from the application fee.

The bill also includes a minimum application fee of $20,000 for the construction of meteorological towers, which are used to measure wind potential.

Hartwell said the bill will next be taken up by the Senate Finance Committee.

John Herrick

Comments

  1. Randy Koch :

    What a crashing reminder of how far VPIRG has abandoned the ideals of the Joan Mulhern era under Paul Burns. He sounds like the developers in the 1980’s who so bitterly opposed the citizen participation provisions of Act 250 including “materially assisting” parties. There is another way of looking at the present proposal, not as a weapon against the wind turbines he so passionately desires but as a small step toward democratizing economic decision-making.

  2. Kim Fried :

    Thank you Natural Resourse and Energy Committee. At least this Senate Committee is trying to solve a major state wide problem. It was the Governor who last year appointed the Special Siting Commission to identify problems and recommend solutions. This Committee is using their extensive report and trying to solve some of these obvious problems. Paul Burns has only his interests in mind, not the interests of Vermont citizens that are trying to participate in the democratic process. The PSB was found wanting and this bill will make it easier for citizens that are being directly impacted by hugh industrial wind ridge line developments to have more of a say in what is happening in their towns and to their citizens. People like Paul Burns doesn’t want these citizens to get in his way of being some kind of hero.

  3. Stan Shapiro :

    Paul Burns has a lot of developer mouths to feed .VPIRG functions because of the money it receives from the renewable energy-developer- political complex.That has nothing to do with the environment. Keep your eyes on the progressives who will vote against this bill.Anyone who fearfully denies public input should go try living in the Ukraine.The nonbinding 2050 goal of 90% renewables needs to be relooked at with a critical eye not as a policy grounded in blind faith.

    • Annette Smith :

      Good point, Stan. There are a number of groups focused on the 2050 90% renewable goal as something written in stone, and they are operating under the Energy Action Network eanvt.org umbrella.

      I have been looking into just one aspect of their “plan” for homeowners to switch to air source heat pumps fueled by electricity as one way to persuade homeowners to reduce fossil fuel consumption. Since I live off grid with solar, I have a good lens through which to evaluate just how much more electricity would be required to run this technology. I determined that it would require a system 4x as large as what I have now, just to support the power consumption of air source heat pumps.

      Yesterday I engaged with Efficiency Vermont on their Facebook page after they posted a promotion about air source heat pumps without providing any information. At first they wouldn’t answer my question and said I could call. So I posted this http://www2.buildinggreen.com/blogs/cold-weather-tests-limits-our-mini-split-heat-pump, a write-up of one cold climate PV-user’s experience. Then EV did respond and said that consumption can vary from 300 watts to more than 3000 watts. This really points up the ridiculousness of using electricity for heating. I understand that number crunchers can make it look attractive when using grid power (at current relatively low cost) but the EAN and CEP and TES grand plan (all being formulated by a private members only group behind closed doors) becomes somewhat irrational if everyone is supposed to be getting that electricity from renewables of the sort we currently have. And of course, once GMP gets you hooked on an expensive air source heat pump (while you will still need your fossil fueled furnace for cold weather periods), it won’t be so easy to disconnect from the grid because you’ve already made a substantial investment on something that is pretty much impossible if you’re off grid.

      • Annette,

        Vermont needs a building energy code that requires all NEW buildings to be “net-zero-energy”, or “surplus-energy”.

        This can easily be done with insulating and sealing the building envelope (R-40 walls, R-60 roof) and using R-5 windows and R-8 doors.

        The most important part is an R-20 basement with the insulation on the OUTSIDE of the concrete so it acts as a thermal mass, AND R-20 blueboard under the slab, AND R-20, 100 PSI blueboard UNDER the footing. Regular blueboard is 25 PSI.

        Add PV solasrand thermal solar systems to such buildings and they will easily be surplus-energy buildings.

        When, in the distant future, electric vehicles arrive, the building will provide its own electricity to the EV, and becomes a net-zero-energy building, instead of surplus-energy building.

        Now, that is long-range planning.

        VERMONT COULD BE A LEADER, but it needs to stop wasting its resources chasing subsidies to build RE systems that produce energy at 3 -4 times NE grid prices.

        Air source heat pumps is definitely not the way to go. Not only are they expensive, but would require a larger capacity PV system to supply the expensive electrical energy, especially if that energy is from the Vermont SPEED system.

        All is spelled out in detail in this article:

        http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses

        • Richard Ratico :

          All sources of energy have costs and consequences. Some are worse than others.
          http://news.sky.com/story/1214600/fukushima-deaths-now-higher-than-in-tsunami

        • Townsend Peters :

          Vermont has building energy standards, adopted by rule by the Dept. of Public Service. Have you ever asked the legislature to direct the Dept. to achieve net zero, or petitioned the Dept. to modify its rules to do the same?

  4. Annette Smith :

    The PSB has been telling citizens that they understand there are problems with their process, and they should take their concerns to the legislature. Here is a 4 minute video compilation of interactions between one citizen and the PSB that took place on several occasions from 2011 to 2014, worth watching if you want a better understanding of the dynamics: https://vimeo.com/85038340

    • Annette:

      Thanks for providing the PSB video.

      After watching the video, I repeat my comments from yesterday on this very issue:

      “Now what do you call a situation where a developer comes into a town or neighborhood and plants a 9000+ solar panel farm across the street from peoples’ homes with no compensation paid? Well, this is happening now in Rutland Town with such a proposed development.

      What is this called?

      In Vermont its called legal.

      The PSB will tell the families living across the street, hey if you don’t like it, talk to the legislature and get the law changed. The problem with the PSB’s advice is that we have powerful people in the legislature who have stated they don’t want to hear from the neighbors.

      So PSB, what are we to do when no in power will listen?”

      I say, keep repeating the message until gets through in Montpelier. This is a perfect example of poor legislation for Senator Snelling and her colleagues to think through sufficiently and remove the unintended consequences,.

  5. Sen. John Campbell did Vermonters a huge service by replacing Sen. Lyons with Sen. Benning (courageously exercising his right as majority leader), i.e., breaking the undemocratic, self-serving, special-interest coddling, people-excluding Shumlin/Chap/Klein/Lyons/DPS/PSB, et al., RE chain.

    Sen. Diane Snelling, R-Chittenden, vice chair of the committee, voted against the legislation: “I believe that we need to have solid legislation that is thought through sufficiently so that it doesn’t have unintended consequences,”

    What unintended consequences? Sen. Snelling should display more intelligence and spell them out, instead of stating generalities.

    Would an unintended consequence be adversely impacted people finally having a say in what is going on in their own neighborhood?

    What happened to local control and the democracy that comes with it?

    Unrealistic, starry-eyed state goals trump democracy? In Vermont?

    The Klein/Shumlin/DPS-inspired, unrealistic, starry-eyed, fantasy goal of POOR Vermont having 90% of ALL energy from RE, not just electrical energy which is only 1/3 of ALL energy, by 2050, is significantly more ambitious than RICH Germany’s goals by 2050.

    Would that energy come from the SPEED program that costs 19.2 c/kWh with NE wholesale grid prices at 5 c/kWh?

    Here are the production COST results for the SPEED Program, 2.2 megawatt or less, per DPS website:

    2010……..5,980,779 kWh……..0.1387 $/kWh; July – December
    2011……20,172,973 kWh……..0.1644 $/kWh
    2012……29,666,592 kWh……..0.1716 $/kWh
    2013……44,822,813 kWh……..0.1919 $/kWh

    Note the RISING trend, whereas RE promoters were claiming RE rates would decline. Blarney?

    NE annual average grid prices are about 5 c/kWh

    http://vermontspeed.com/speed-monthly-production/

    VERMONT’S BEST APRROACH IS INCREASED ENERGY EFFICIENCY BEFORE DOING EXPENSIVE RE

    Even Germany is rethinking its RE goals, AND its feed-in tariffs, because its RE costs are getting so out of control, it is threatening their international competitiveness (RE energy costs are 4 times wholesale grid prices of 5.5 eurocent/kWh or less), AND very few nations in Europe are following Germany’s example, except Denmark which has the highest household electric rates in Europe, with Germany being second at 29.65 eurocent/kWh!!!

    In Europe, economic growth is near zero, population growth is near zero, unemployment is 12%, but in Spain, another RE “leader”, it is 26% for people older than 25, it is 50% for people 25 or less!!!

    Here is an article that explains the German RE situation in detail:
    http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

    Here is an article that explains the Vermont RE situation in detail.
    http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy

  6. Annette Smith :

    Guillaume, that’s a very good question. The idea is that the majority of Vermonters are in favor of wind energy. So if that is true, what is to fear from towns having a say. After all, if the idea is right, then there should be a lot of town plans that say “we want wind energy.” Glad you see the humor in it all.

  7. Two points:

    Sen. Snelling said: “I believe that we need to have solid legislation that is thought through sufficiently so that it doesn’t have unintended consequences,”

    Sen. Snelling, do you believe the renewable energy legislation enacted to date, which has proven to be so controversial and many feel is harmful meets your standard of “ solid legislation that is thought through sufficiently”?

    It appears to growing numbers of Vermonters that present renewable energy laws and policies are not the product of “solid legislation that is thought through sufficiently…..” that you call for. To the contrary, they are laws and policies pushed through by lobbyists and moneyed special interests that stand to benefit.

    Point two.

    VPIRG’s Paul Burns opines: “The fundamental purpose of the bill is to make it more difficult to build renewable energy projects in the state.”

    I say exactly, it should be difficult to dynamite the tops off of Vermont’s mountains for industrial wind turbines of questionable utility. It should be difficult to build giant industrial solar farms across the street from peoples’ homes or up and down our roadways.

    I also find it difficult to understand how a real environmentalist could be for industrial projects that do nothing to improve Vermont’s air quality, yet are so otherwise significantly harmful to the environment.

  8. Peter,

    “Sen. Snelling said: “I believe that we need to have solid legislation that is thought through sufficiently so that it doesn’t have unintended consequences.”

    Sen. Snelling probably did not know, as do most amateur energy sector meddlers, that the SPEED program would produce energy at 3 to 4 times NE grid prices, surely an “unintended consequence”.

    But, I warned about 4 years ago, when the RE programs were being cooked up by insiders, behind closed doors, that the feed-in tariffs would produce expensive energy, the extra costs of which would be charged to the electric bills of already-struggling households and businesses.

    I was told by Rep. Cheney, now on the PSB, that the impact on rates would be minor, etc., i.e., being blown off.

    Over the years, that impact will be major, further hollowing out Vermont’s struggling, tax-burdened middle class, in the same manner it is burdening the less and less flush, German middle class.

    http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy

    http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

    These heavily-subsidized, inefficient RE projects are being built, even though there is a SURPLUS of efficient generating capacity, MW, in New England, because the projected electrical demand that gave rise to the excess capacity, has not happened. In fact, there is now less demand, AND consumption, MWh, than there was in 2007.

    To waste scarce funds to build expensive, inefficient RE capacity, MW, is inane, and irrational, and completely irrelevant to actual energy Vermont’s needs.

    See my above comment regarding near-zero-energy buildings.

    • John Greenberg :

      “I was told by Rep. Cheney, now on the PSB, that the impact on rates would be minor, etc., i.e., being blown off.”

      She was exactly correct. The impact has been virtually zero.

      • John,

        Virtually zero?

        But had these underperforming expensive projects produced more energy, i.e., higher capacity factors, the impacts would have been greater, and will be greater as more such inefficient project build-outs proceed in the future.

        As we all know by now, Vermont already has the 4th highest electric rates in the US, right after Connecticut and Hawaii and Alaska. Yikes.

        Artificially making it worse by subsidizing the building of more such RE projects is good for heavily-subsidized RE businesses, but bad for already-struggling Vermont households and businesses in a near zero-growth economy.

        • Willem:

          As you know, the issue is electricity prices tomorrow, not prices yesterday.

          Notice John Greenberg’s choice of verb tenses in describing price increases. He elects to talk about prices of yesterday versus tomorrow. John’s a smart guy and knows exactly what he’s saying and what’s coming and he doesn’t want to talk about it…..that being the coming electricity price increases.

          When it comes to future electricity prices, severe myopia is the operative condition suffered by many of Vermont’s politicians and energy policy makers.

          Once the state moves anywhere remotely close to the 90% renewable energy goal, electricity prices will have gone through the roof and today’s politicians and energy policy makers will be no where to be found.

          Maybe, John will be able to locate them for the rate payers.

          • John Greenberg :

            Peter,

            First, I will respond briefly to your suggestion that “the issue is electricity prices tomorrow, not prices yesterday.” Perhaps that’s the issue you want to discuss NOW, but it isn’t the issue Willem DID discuss and to which I responded. He quoted Margaret Cheney as saying (years ago, I presume) that SPEED’s impact on prices would be minor, and I merely pointed out that she was right: it HAS been minor.

            But since you NOW want to talk about the future, let’s do so. Unlike you and Willem Post, I am not a prophet: I don’t know what future electric prices will do.

            But there are critical reasons to doubt the approach that you and Willem keep taking in making your forecasts about renewables.

            First, as Richard Ratico has pointed out, grid prices in New England are set by natural gas prices, which, if history is any guide, are volatile. If you look at ISO-NE price predictions over the last decade, and then compare them to actual prices, you will see 2 things. First, they’ve been universally wrong, and not by small amounts. Second, the predictions tend to follow current trends: when prices are low, forecasters predict they’ll stay that way indefinitely. When they’re high, the opposite is true. Since, in fact, they’ve fluctuated wildly over time, the forecasts have been WAY off base. In other words, it’s proven to be a fallacy to believe that you can extrapolate future New England electricity prices by simply projecting recent history forward for a few decades. Yet that’s exactly what the two of you are doing.

            Currently, there is a glut of natural gas in the US, and prices are extremely low. This, in turn, (along with sharply lower electrical demand thanks both to the recession and to major investments region-wide in efficiency) has led to low grid prices, in the 5 cents range that Willem is always ranting about.

            But any price is a function of both supply AND demand.

            Natural gas can be sold on the world market, not just in the US, and while there’s been little incentive to export it in the past when supplies were barely adequate at times for domestic demand, there’s plenty of incentive now and the infrastructure is being built to do just that.

            With adequate infrastructure in place, effective demand for natural gas will be many TIMES greater than it is now (China alone is big enough that its demand is virtually unlimited), and if gas can be economically exported to the rest of the world, then what now appears to be excess supply could easily appear inadequate all of a sudden.

            Consider: if natural gas companies believed Willem’s notion that supply will remain far in excess of demand for decades to come, why would they be out drilling for more gas? The price right now is, as I understand it, below the price of production. Yet, exploration and drilling continues at a breakneck pace. I would suggest that they know something Willem appears not to know.

            One last thought about gas before moving on. Right now, the supply of gas is plentiful also because there is relatively little regulation of fracking, but that MIGHT change. If evidence keeps mounting that fracking causes geological (earthquakes) and environmental (largely escaping methane) problems, there could well be a regulatory backlash. Even in Republican states like Oklahoma, where the rate of earthquakes has increased significantly and MAY be connected to oil and gas drilling. If there were more regulation applied to drilling, supply could drop and the price would rise.

            To make a long story short, I don’t know what will happen to gas prices, especially a decade or more from now, but I do have pretty good reasons to guess that you guys don’t either.

            Now, point 2. The assumption that you and Mr. Post keep making about renewables is that if prices for electricity from these sources are higher than the market today, they will remain so tomorrow. Yet, as I have repeatedly pointed out, the price curve for solar power, in particular, has been heavily downward: “The price to residential customers of installing PV systems fell from more than $100 per watt peak (Wp) in 1975 to $8 per Wp by the end of 2007 ….” (“Solar Power: Darkest before the Dawn” McKinsey: http://www.mckinsey.com/client_service/sustainability/latest_thinking/~/media/5E847C563A734F148B5F3A6EFBD46E39.ashx The same report suggests that prices will continue to DECLINE by significant percentages over the next 5+ years. McKinsey is by no means alone in this prognosis.

            My point is not that McKinsey is right and that you two are wrong – though I believe that’s highly likely. Only time will allow us to know that. Rather, it is to point out that McKinsey’s guess is based, among other things, on a proper consideration of past trends, and that the guess you and Willem are making flies completely in the face of all known history.

            As other reports have pointed out, solar is ALREADY competitive with other energy sources in 1) very high-priced markets and 2) areas of unusually high insolation (or both). If the price curve continues downward, it’s not particularly a reach to suggest that within a decade or so, it will reach grid parity in places like New England.

            Similar reasoning applies to wind energy, though the price curves for wind seem to have flattened in recent years. In the Midwest, and in many areas of the world, wind turbines are already price competitive, WITHOUT subsidies, with other new generating sources.

            To sum up, then, the notion that you can predict the energy price future by assuming flat natural gas prices and therefore flat grid prices while simultaneously assuming that renewables will continue to be far more expensive than other energy sources is, I believe, based on two false assumptions.

            Moreover, it completely ignores the fact that older plants retire (e.g., VY, 2 Salem coal plants, etc.) and need to be replaced. That means that new plants will be needed, and it then requires incorporating the cost of building them into the mix, but that never appears in either your or Willem’s rants. New nuclear plants, for example, even heavily subsidized by federal loan subsidies, are currently expected to come in at no less than about 3 times the current grid price (around 15 cents per Kwh), NOT the 5 cents that VY has accustomed us to, and that’s the optimistic forecast. Since new gas plants will be heavily dependent on the price of the fuel, we’re back where we started on that score.

            I consider it highly fortunate that the Vermont policy makers that you two are constantly condemning have considered all these issues (and a good many more, I might add) for years.

        • John Greenberg :

          Willem,

          “But had these ….” As I’m told they say in Israel, “If grandmother had wheels, she’d be a bus.” The facts are that SPEED has had virtually not impact on overall Vermont electric prices, precisely as you say Margaret Cheney predicted.

          Now you argue: “Vermont already has the 4th highest electric rates in the US,” as though SPEED had something to do with THAT.

          New England has had higher electric rates than most of the US for decades,- probably forever. Your suggestion that Vermont’s high prices are caused by SPEED is complete bunk for which there is NO evidence.

          Indeed, the facts show precisely the opposite. SPEED was enacted in 2005, so I went back to EIA state-by-state statistics for 2004, and guess what? Vermont had the THIRD highest residential prices back then right after HI and NY on a price per kWh basis. http://www.eia.gov/electricity/sales_revenue_price/ (go to the page, put in 2004 for previous editions). And just for comparative purposes, I went as far back as Excel files are available, 2002, and in that year, VT ranked 4th behind HI, NY and CA. I’d be willing to bet that if you went back as far as at least the 1980s (and quite possibly before that), the same would be true.

          So yes, Willem, virtually zero.

          • John,

            4th highest electric rates, and a Cost of Living index of about 120, with the mean real household income only 3% greater than the US average, means Vermont’s standard of living is already about 17% below the US average. Yikes.

            The bottom 60% of households have had DECLINING real incomes since about 2000. Look around and you will see the rundown shabbiness everywhere. Friends of mine came to visit from Norway and were shocked.

            It would be immoral to add more expensive SPEED energy and ridge line energy to the mix to make matters worse for already-struggling households and businesses in a near- zero-growth economy; kicking them in the teeth while they are down, with multi-millionaires feeding their RE tax shelters.

            It would be far better if the $500 million wasted on expensive energy producing SPEED and ridgeline RE projects had been spent on increased energy efficiency.

            That $500 million advanced poor Vermont about 1.6%, over 3.5 years, towards the Klein/DPS, starry-eyed, fantasy goal of 90% of ALL energy from RE.

            It is completely irrational to add more generating capacity, MW, when NE already has an excess of capacity, due to the lack of load growth since 2007.

            All is explained, with URL references, in these articles.

            http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy
            http://theenergycollective.com/willem-post/338781/high-renewable-energy-costs-damage-germanys-economy

          • John Greenberg :

            Willem,

            I’ve responded to most of your points already.

            “It is completely irrational to add more generating capacity, MW, when NE already has an excess of capacity, due to the lack of load growth since 2007.”

            Thanks to the early retirement of a number of generating plants (including VY), New England’s glut will disappear as of 2017: http://www.vermonttoday.com/apps/pbcs.dll/article?AID=/RH/20140206/NEWS02/702069853. As of the auction for that year, it has been replaced with a very slight shortfall: http://www.iso-ne.com/nwsiss/pr/2014/fca8_initial_results_02052014.pdf

            Income and cost of living statistics are irrelevant since SPEED has had no significant impact on power rates in Vermont.

          • John,

            People ARE different. Peter and I offer mostly rants. You offer mostly calm, level-headed, erudite, reasoned, discourse.

            I think, promoting failed government programs is not a virtue. I think doing RE before EE is merely an irrational chase after subsidies; pouring water in a leaking bucket, putting the horse behind the cart.

            “Yet, as I have repeatedly pointed out, the price curve for solar power, in particular, has been heavily downward”

            If that were so, why does the PSB set a 27 c/kWh feed-in tariff for PV solar? Much higher than Germany!!!

            Could it be the tariff is set so high to attract multi-millionaire investors with tax shelters from all over the US to a good deal offered by poor Vermont, just so Klein and Co can claim solar SPEED is soooooo successful?

            Here is the SPEED “success” till now:

            Here are the production COST results for the SPEED Program, 2.2 megawatt or less, per DPS website:

            2010……..5,980,779 kWh……..0.1387 $/kWh; July – December
            2011……20,172,973 kWh……..0.1644 $/kWh
            2012……29,666,592 kWh……..0.1716 $/kWh
            2013……44,822,813 kWh……..0.1919 $/kWh

            Note the RISING trend, whereas RE promoters were claiming RE rates would decline. Blarney?

            NE annual average grid prices are about 5 c/kWh

            http://vermontspeed.com/speed-monthly-production/

            According to David Hallquist, CEO of VEC, (a good engineer and level-headed), the cost of heavily subsidized solar energy in Vermont is about 17 c/kWh for large, say 1,000 kW, systems.

            Without those subsidies, it would be much higher. DPS should have the 25-year spreadsheets.

            The more, expensive SPEED energy gets rolled into electric rates, the higher the electric rates, and the worse it will be for already-struggling households and businesses trying to make ends meet in a near-zero-growth economy, and scraping by to pay the taxes for an ever-growing state government budget.

          • John Greenberg :

            Willem,

            You challenge my statement that solar costs are declining, by asking “If that were so, why does the PSB set a 27 c/kWh feed-in tariff for PV solar?”

            First, your logic is wrong. If I tell you that the cost of caviar is declining, that does NOT mean that it is cheap! It means that caviar costs less now than it did in the past.

            Second, I don’t set Board policy, and actually Board policy has nothing to do with the price of solar anywhere BUT in Vermont. My statement was solar prices in general, and was not particular to or limited to Vermont.

            Despite the fact that your question is thus unrelated to my statement (and not, by any means, a rebuttal), I’ll now answer it..

            The Board sets rates within the specifications of laws passed by the legislature. In this case, the Board writes: “Section 8005a(f)(2)(A) requires that the standard-offer price be the avoided cost of the Vermont composite electric utility system if the Board finds that a market-based mechanism is inconsistent with either applicable federal law or the goal of timely development of standard offer projects at the lowest feasible costs.
            Section 8005a(f)(2)(B) defines avoided cost as:
            the incremental cost to retail electricity providers of electric energy or capacity or both, which, but for the purchase through the standard offer, such providers would obtain from distributed renewable generation that uses the same generation technology as the category of renewable energy for which the board is setting theprice.
            In addition, pursuant to Section 8005a(f)(B), the definition of avoided cost includes the
            consideration of each of the following:
            (i) The relevant cost data of the Vermont composite electric utility system.
            (ii) The terms of the contract, including the duration of the obligation.
            (iii) The availability, during the system’s daily and seasonal peak periods, of capacity or energy purchased through the standard offer, and the estimated savings from mitigating peak load.
            (iv) The relationship of the availability of energy or capacity purchased through the standard offer to the ability of the Vermont composite electric utility system or a portion thereof to avoid costs. [p. 9]
            (v) The costs or savings resulting from variations in line losses and other impacts to the transmission or distribution system from those that would have existed in the absence of purchases through the standard offer.
            (vi) The supply and cost characteristics of plants eligible to receive the standard offer.”
            “ORDER RE ESTABLISHMENT OF STANDARD-OFFER PRICES AND
            PROGRAMMATIC CHANGES TO THE STANDARD-OFFER PROGRAM,” pp. 8-9, found here http://vermontspeed.squarespace.com/storage/board-orders/Prices%20and%20Program%20Changes%203-1-13.pdf

            To comply with this legislative mandate, the Board hired a consultant, Power Advisory, and then summarizes the consultant’s reasoning thus: ‘Power Advisory contends that solar PV costs have continued to decline and the prices should be revised to ensure that the standard-offer pricing reflects the underlying costs to build and operate a project. Power Advisory recommends that the solar PV price be updated from the previous price determination in Docket 7780, to reflect changes in capital costs and the treatment of property taxes. Power Advisory provided evidence that prices for PV modules have declined by 25 to 34 percent in 2012. Solar PV modules are forecasted to be $0.67 per watt in the first quarter of 2013, with a further reduction to $0.55 per watt forecasted for the fourth quarter of 2013.12 A solar module cost of $0.55 per watt represents a total capital cost of $3.06 per watt for solar projects. Power Advisory also recommends that the property tax payments in the cash flow model be escalated by inflation, rather than the payments declining as assumed in the previous price determination.13” (id, p.10)

            Finally, after some discussion of the role of FERC in all of this, the Board reaches the following conclusion: “With respect to the appropriate capital costs for solar projects, we are persuaded that current trends suggest continued declines in the cost of solar modules and systems, and a value of $3.06 per watt presented by Power Advisory is appropriate.” (id, p. 14) Which leads to the final answer to your question: “Using the assumptions from the previous price determination in Docket 7780, with updates to reflect changes in capital costs and the treatment of property taxes, the financial model calculates an avoided cost of $0.257 per kWh. Accordingly, we establish an avoided cost for solar projects of $0.257 per kWh.” (id. P. 15)

            I would only add that both the consultant and the board note that, as the Board put it in its conclusion: “we are persuaded that current trends suggest continued declines in the cost of solar modules and systems,” which is, of course, precisely the point I made above.

            I would also note that since you repeatedly tell us you’re an expert, you either knew or should have known the answer to your question.

          • Coleman Dunnar :

            John:
            You state “If the price curve continues downward, it’s not particularly a reach to suggest that within a decade or so, it will reach grid parity in places like New England.”
            True at some point in time solar will reach parity with the grid. The point is today it doesn’t. So why spend the money now. It’s not as if the demand for solar products in small Vermont is driving the price of solar down. Wasn’t be enough to keep Solyndra, et al a float. There is actually an incentive for the RE industry to push for the rush, it accelerates the approach to parity by driving energy cost higher. Even the Departments own study shows that parity and positive benefits only begin to accrue 13 years out. Again why spend to day?
            Secondly familiarize yourself with ISO-NE market rules. A very small piece of generation can have very significant impact on clearing price. The highest accepted bid sets the price for all kwh that clear the market at that point in time. That’s an impact on every kW sold in New England not just Vermont. Don’t rebut with the peak hour argument unless you actually come back with the number of hours and total dollar impacts of the numbers for the hours the grid price actually exceeded the RE and associated program prices.

          • John Greenberg :

            Coleman,

            Reasonable points. Unfortunately, I am heading out of town and have no time to respond to them.

            I may do so tomorrow night or after, when I return.

          • John Greenberg :

            Coleman,

            You make 3 points.

            1) You accept the notion that solar power may well reach grid parity, which was my original point. I COULD easily stop there, but the points you raise are too interesting to leave them without a response.

            2) You ask, as a matter of policy, why Vermont should pay more for renewables now if by waiting, we can pay less later.

            The answer to that is far from simple, and this is not the place to attempt a full answer. Instead, let me suggest some points you appear to leave out of the equation.

            — As noted above, New England’s grid will no longer be in surplus beginning in 2017, due to plant retirements. Within the decade or so following that, for example, several more nuclear plants are quite likely to retire, since they will be in the well over 40 year old range by then. (I believe the world’s oldest commercial nuke made it 45 years). That’s a large chunk of capacity that will be gone. Unless efficiency efforts (= demand side management or DSM) are sufficient to reduce demand enough to compensate, then new generation of some sort will be required.

            Wind turbines built in Vermont take at least 3 years or so from inception to operation. Nuclear plants anywhere take 10 years (or much more). I can’t speak to other plants, but it’s safe to say that all of them require lead time.

            You appear to be comparing renewable prices to TODAY’s grid prices, but the real comparison needs to be between new renewables and new plants from other sources, unless you can reasonably project DSM adequate to meet tomorrow’s needs. The 13 year figure you cite from DPS is not so very far from today when looked at this way.

            — We hear a great deal about renewables subsidies, but far less about subsidies for other sources. Everything I’ve seen suggests that they actually dwarf the subsidies for renewables, yet they are not part of the calculus in most of these price comparisons. They should be.

            — If we’re projecting forward (as I’ve just suggested we must), then we should certainly be willing to factor into our price equations the costs which do NOT appear otherwise: e.g., the very real costs of environmental pollution, air pollution, water pollution, and radiation from sources which compete with renewables. It’s my understanding that the PSB, recognize how difficult it is to quantify these external costs, simply adds 5 cents to the costs of fossil fuel and nuclear generation when comparing them to renewables.

            — Finally, there are a variety of considerations which do NOT show up in energy prices, but which are still of economic importance. It’s prudent for utilities to purchase their power from a wide variety of sources, using a wide variety of pricing mechanisms. Such diversification is no different from financial portfolio management and follows very similar (virtually identical) principles. There may well be a cost involved in constructing a utility portfolio that is well-diversified, but that cost is more than offset by the safety of knowing that power WILL be available when needed at a REASONABLE, even if not quite the lowest, cost. Put differently, you might get lucky by putting all of your eggs in what appears to be the lowest cost basket, but if you don’t, you’ll pay for your imprudence. Vermont utilities learned this the hard way in the last 1990s.

            Similarly, and in addition, generating power in-state creates jobs and other economic benefits which purchasing power from elsewhere cannot offer. With enough jobs and other benefits, it can actually make sound economic sense to pay more for the power than if “cheap power” were purchased elsewhere.

            3) You lecture me about the New England grid, but it too is far more complex than you suggest, and I’ll admit I don’t fully understand all the ins and outs (though I did understand the bit you explained).

            My understanding, for example, is that power contracts like the old VY contract mean that Vermont’s utilities were buying power from Entergy at prices fixed by the contract, NOT by the grid, and that these prices (and this power) were not part of the grid pricing mechanisms at all.

            If, however, the utilities found themselves with too little power at a given moment, they would go to the spot market to buy; it an excess, then the unneeded power would be sold into the spot market. Before the market crash, our utilities actually saved ratepayers a significant amount of money by buying power under low-priced contracts and then selling it at high spot market prices. All of this obviously depends on what contracts each utility has to start with, how (if at all) they relate to the ISO-NE market (or to the price of natural gas which drives it), and what is being compared to what. Presumably, those big gains were converted to losses when the same contracts ended up being HIGHER than the market a year or 2 later, after the collapse in demand for power.

            I would assume, though I don’t have enough information to prove it, that our utilities have contracts that leave them very little power to buy in the market EXCEPT during peak times and that therefore the price of solar, for example, should MOST often (not always) be compared to peak prices. That’s what GMP representatives have said repeatedly, and it’s why they’ve been offering the 6 cents adder to net metered solar systems even without a regulatory mandate to do so.

            In sum, this is complex stuff, which is discussed in these comments columns far too cavalierly by people who frankly don’t know what they’re talking about. This last comment is NOT aimed at you – you’ve raised interesting issues, which are at least grounded in an understanding of the facts.

            I see my role here, most often, as contesting misstatements of fact which poison rational debate, rather than attempting to advocate. That’s not to say that I don’t have a point of view: clearly, I do.

            I hope this gives you enough of an answer to chew on. I realize that neither of the last 2 answers fully answers your questions, but frankly, I don’t want to pretend to know what I don’t know. This is VERY complicated stuff.

      • John,

        “She was exactly correct. The impact has been virtually zero.”

        You are using “has been”, whereas my comment
        was

        “OVER THE YEARS, that impact will be major, further hollowing out Vermont’s struggling, tax-burdened middle class, in the same manner it is burdening the less and less flush, German middle class.”

        My statement is correct, because it is rational.

        Anytime expensive SPEED energy is rolled into rate schedules, already-struggling households and businesses are shafted, while in-state and out-of-state solar project owning multi-millionaires fatten their tax shelters.

        • John Greenberg :

          Peter and Willem,

          You guys have become quite the grammarians. Greenberg is using the past tense when we’re looking forward, you’ve now both claimed. (Yankowski: “Notice John Greenberg’s choice of verb tenses in describing price increases. He elects to talk about prices of yesterday versus tomorrow.” Post: “You are using “has been”, whereas my comment was “OVER THE YEARS, that impact will be major …”)
          There are 2 problems with your new claim. The first is that it happens to be false: I responded to Willem’s comment which was, wait for it, in the past tense: “But, I warned about 4 years ago, when the RE programs were being cooked up by insiders, behind closed doors, that the feed-in tariffs would produce expensive energy, the extra costs of which would be charged to the electric bills of already-struggling households and businesses.
          I was told by Rep. Cheney, now on the PSB, that the impact on rates would be minor, etc., i.e., being blown off.”
          Since your claim was in the past tense, my response was too: the claim is wrong; Cheney was right; there has been virtually no impact.
          But let’s ignore that and move on.
          The second problem is this: if your argument is now that “that impact WILL be major,” (emphasis added) because “Anytime expensive SPEED energy is rolled into rate schedules, already-struggling households and businesses are shafted,” then you need to answer an obvious question.
          If your generalization is correct and this happens ANY time, then why has it NOT happened in the last 10 (counting from the inception of the program) or, if you prefer 4 (as in your statement above) years? After all, neither of you has taken issue with my statement, which certainly appears to be conceding that it’s correct.
          That leaves, I think, 3 choices. 1) You can try to defend your original claim that the SPEED program HAS had a major impact on prices and then use that to claim that the process will continue into the future or 2) You can admit, as you both appear to be doing tacitly by failing to actually respond to my remarks, that in the first 10 years the program did NOT have this effect, explain WHY that happened despite the general rule Willem has laid out, and then why the future will be different.
          Alternatively, of course, 3) you can just admit that Margaret Cheney was correct and that your allegation against her is baseless.

          • John Greenberg :

            SPEED originated in 2005, so when I wrote 10 years I should have said 8-9 years. My bad.

    • Richard Ratico :

      Willem,

      Amateur or pro, you well know the wholesale price of electricity in Vermont is largely determined by the cost of natural gas.

      The current, TEMPORARILY, low price is a direct result of fracking. See the movies Gasland and GaslandII for the grisly details. Taken in the context of the available alternatives, wind and solar installed NOW are a bargain.

      Here is an article that explains the Vermont RE situation in detail.
      http://www.dangersoffracking.com/

      • Richard,

        That means we have a few years to build HVDC transmission systems to Canada to obtain plentiful near-CO2-free, hydro energy under long term contract at about 6 c/kWh, adjusted for NE grid prices.

        No need to be irrational and handicap Vermont’s economy with home-grown SPEED energy at 19.2 c/kWh. See my above comments.

        There is no way Vermont’s economy can function with such high energy prices and have enough money left over to pay the taxes for an increasingly more bloated government.

        As you well know, the cost of living index in Vermont is about 120, but the mean REAL household income was $52,977, vs $51,371 in the US in 2012, meaning the Vermont standard of living is already 17% below the US average.

        As you well know, the Vermont electric rates are already 4th highest in the US, right after Connecticut, Hawaii, and Alaska. No need to further increase them with expensive SPEED energy.

        As you well know, I am in favor of PV solar systems and thermal solar systems on near-zero-energy buildings.

        That is the reason Vermont should have a new building code that requires all NEW buildings to be “near-zero-energy.”

        In fact, the starry-eyed, fantasy, 90% RE plan cannot be implemented and still have a viable ecomomy, unless Vermont has mostly near-zero energy buildings, and 50 plus MPG vehicles.

        Weatherization, in that context, is nothing but a feel-good farce.

        All is detailed, with URL references, in these articles:

        http://theenergycollective.com/willem-post/332911/high-renewable-energy-costs-damage-vermonts-economy

        http://theenergycollective.com/willem-post/46652/reducing-energy-use-houses

        • Richard Ratico :

          Willem,

          You wrote:
          “That means we have a few years to build HVDC transmission systems to Canada…”

          In your contortions to twist the facts concerning the SPEED program you may not have noticed the ongoing debate next door in New Hampshire over the proposed Northern Pass project. The local objections there to that HVDC system are essentially identical to the ones raised here in VT over wind turbines.

          While you and the navel gazing NIMBYs in your posse refuse to accept responsibility for producing our own, clean, renewable energy in state, I find it the height of hypocrisy that your answer to the issue is simply outsourcing the siting problems to our northern neighbors in Quebec. The mega projects there are every bit as controversial as anything installed or proposed in Vermont, and have had a direct negative impact on far larger numbers of people than here. And guess what? HQ is installing wind turbines too!

          Fact: Lake Champlain is the sixth largest lake in the United States. Vermont is more than 7.5 times as large as Lake Champlain. HQ has already flooded an area greater than that of all of Vermont.

          • Richard,

            “contortions, twist, navel-gazing, posse, height of hypocrisy?”

            Such words detract from your message.

            The grossly-excessive 27 c/kWh solar feed-in tariff set by the PSB is about 2.5 times the feed-in tariffs in Germany.

            http://www.germanenergyblog.de/?p=15234

          • Richard Ratico :

            Willem,

            The words would detract were they not so sadly true. The fact that you would choose to falsely compare Vermont’s relatively new system with Germany’s mature system in the very same comment in which you protest my characterization says far more than I ever could about the accuracy of those words.

            As you well know, but hate to admit, Germany has had the most successful experience with FITs of any country in the world and has been a model for similar programs in many other states, including Vermont’s. YEARS AGO, when Germany’s percentage of renewables was comparable to what Vermont’s is now, their feed-in-tariffs were MUCH more generous than Vermont’s are now.

            When our incentives prove as successful as Germany’s, they will be scaled back as Germany’s have been.

  9. Annette Smith :

    Guillaume, yes I think you are correct. Three towns have had positive votes about wind, though one was not in favor. Though it is spun as a favorable vote, Sheffield people voted to continue studying the project and they were told there would be another opportunity to vote yes or no but that never happened. The other two towns on the yes side are Readsboro and Lowell. Readsboro’s vote was for turbines about 100 feet shorter than Iberdrola is currently proposing, and it is common for town officials to speak in favor of the project and the money. Now that some Readsboro residents are being harmed by the Hoosac wind project, and with taller turbines and documentation that the bear habitat is important, a vote now might turn out differently. That leaves Lowell, where the chair of the Select Board has been quoted saying that people voted for the GMP wind project because of the money reducing their taxes. Many Vermont communities have said no to the wind money and shown that Vermonters cannot be bought.

  10. Pete Novick :

    As for me, I am working with three major toy companies to design and manufacture a jigsaw puzzle – the kind your favorite aunt used to give you for your birthday – that features one of those take-your-breath-away Vermont hillsides in full autumn splendor.

    Oh, did I mention the nine 400 ft. tall wind turbines gracing the ridge line?

    “Aunt Betty, I think there are some pieces missing from this puzzle!”

    Boy, you can say that again…

  11. Rob Pforzheimer :

    It doesn’t matter how much “public input” there is if the PSB continues to ignore it as they have in the past, and with the newest pro wind board member, Margaret Cheney, will no doubt continue to do.

  12. Richard,

    As I stated earlier, David Hallquist, CEO of VEC, has stated the energy cost of heavily-subsidized 1,000 kW systems, and up, is about 17 c/kWh. The PSB uses, for some unexplained reason, 27 c/kWh.

    As I stated earlier, it is likely the PSB tariff is set so high to attract multi-millionaire investors with tax shelters from all over the US to a good deal offered by poor Vermont, just so Klein and Co can CLAIM solar SPEED is soooooo successful, whereas, in fact, it is producing energy at 19.2 c/kWh, BECAUSE OF THE TOO HIGH SOLAR FEED IN TARIFF.

    Germany’s EEG program pays about 11.5 eurocent/kWh in 2014, or 15 dollar cent/kWh for 1,000 kW systems.

    I think David’s numbers are realistic, when compared with the German numbers, and, as I stated earlier, the PSB number is overly generous.

    It has nothing to do with your “Vermont vs Germany maturity” argument. David’s numbers are the proof your argument is invalid.

    You use that flawed argument, because you install PV solar systems and you have a vested interest to defend any subsidy, by whatever means you can, including ad hominem slurs, even if those subsidies benefit you at the expense of others.

    As you know, multi-million dollar subsidies are involved which help multi-millionaire owners of meadow-mounted, highly-visible, 2.2 MW solar plants to fatten their tax shelters, at the expense of households and businesses already struggling to make ends meet in a near-zero-growth economy, all while they are also struggling, year-after-year, to scrape together the increasing taxes levied by a bloated government chasing RE subsidies “to boost Vermont’s RE economy”.

    • Richard Ratico :

      Willem,

      I’m quite sure my “vested interest” pales in comparison to David Hallquist’s as the CEO of a utility and perhaps yours as well, since you have previously bragged about being a member of the 1%.

      As usual, you fail to address my comments. My comments stand.

    • John Greenberg :

      Willem,

      Please cite a source for your 27 cent figure for what the PSB is using.

      Here’s what I see. For solar projects, the figure is 25.7 cents, levelized for 25 years. For biomass, it’s 125 cents levelized, or .121 for the first year, rising to .141 in the 20th year. For farm methane, it’s .141 cents levelized or .136 cents in the first year rising to .15 in the 20th. For hydro, it’s .123 levelized, or .119 in the first year rising to .131 in the 20th year. For landfill gas, it’s .090 levelized, or .087 in the first year and .097 in the 15th year (I gather these are shorter-lived projects). For large wind (greater than 100 kW), the levelized price is .118 levelized or .113 rising to .124 in the 20th year; for small wind the levelized price is .253, which starts at .245 and rises to .271. All of this is on page 16 of the order I cited above: http://vermontspeed.squarespace.com/storage/board-orders/Prices%20and%20Program%20Changes%203-1-13.pdf

      If you average ALL of these energy sources, it wouldn’t be terribly surprising to see them come out somewhere around the figure you attribute to David Hallquist, since some are considerably higher, but some are considerably lower.

      But since ALL of them are lower than your 27 cent figure, some explanation is required.

Comments

*

Comment policy Privacy policy
Thanks for reporting an error with the story, "Senate energy committee OKs bill on public input on energy project si..."