Editor’s note: This op-ed is by Brad Ferland, president of the Vermont Energy Partnership.
One of the most important policy decisions facing Vermont today is what our electricity portfolio will look like over the next several decades. This is about securing long term power purchase agreements that can provide tangible benefits to Vermonters. Tangible means keeping large and small businesses interested in staying in Vermont. It means electricity costs stay manageable for farms, ski areas, hospitals, country fairs, schools, athletic facilities and everyday consumers. And this list doesn’t scratch the surface of who benefits or is harmed by how our energy policy becomes a reality.
Right now we have the lowest cost electricity in New England and the second lowest carbon emission per capita in the country. Our current electricity portfolio success is due to Hydro Quebec and Vermont Yankee. That’s a fact! And the way we are going to have continued sensible electricity supply is through capable leadership making policy decisions based on fact and not on emotions or politics.
This week, the Vermont utilities showed leadership. They signed a 26-year power purchase agreement with Hydro Quebec, giving us a continuation of carbon free, baseload renewable energy for decades to come. The deal gives us a starting cost of 6 cents a kilowatt hour and then the contract will follow market prices, but has safeguards that it won’t spike quickly or dip sharply. The HQ deal is being touted by Vermont and Quebec officials as a win-win agreement that will serve Vermont customers well.
This leads us to part two of Vermont’s energy policy planning. And once again, it’s going to require leadership. We need Vermont Yankee and the utilities to get to the table and reach a power purchase agreement that will continue to benefit Vermonters for decades to come.
Based on the fact the utilities and Vermont officials are celebrating the HQ agreement, we now have a reasonable bench mark for striking a VY deal. The last VY offer to the utilities was 6.1 cents a kilowatt hour for 20 years. Unlike the HQ deal, this offer didn’t adjust rate increases based on market prices. The VY offer was a long term and relatively fixed low cost power purchase agreement that offered the added sweetness of 650 high paying jobs, tax revenues to Vermont and an economic multiplier that adds millions of dollars to the Vermont economy. At the time of the offer, the utilities didn’t think it was enough. We’ll see if the HQ deal will change the perspective on this. It should be added that the favorable starting price for HQ power may have had a direct relationship to the VY offer.
And that leads us to part three of our energy policy moving forward. This is strong support for renewables and continued success of our energy efficiency programs. Wind, small hydro and solar are developing in Vermont but not at a very quick pace. The power has been costly and has faced many hurdles coming on line. Even with a $25 million jump start from the clean energy fund furnished by Vermont Yankee, it is expected that the most optimistic outlook for new commercial renewable power generation will prudently be expected to add 95 megawatts to the Vermont power portfolio in the next five years. This is enough to power for about 28,000 homes. And don’t forget, wind and solar are intermittent power. They require baseload power to back them up when the sun doesn’t shine and the wind doesn’t blow. This is a compelling reason to have both baseload HQ and VY power generation. They will also offset the higher costs of developing renewables. We have to stop looking at this as either/or and view it as a complementary partnership that makes sense for a balanced energy portfolio.
We have great opportunity for sound energy planning policy decisions right now. It’s imperative we act wisely and make decisions based on facts and not emotions. Leadership is necessary if beneficial energy policy is going to happen. And the clock is ticking. Any more delay in inking a VY power purchase agreement will lead to complications we don’t want to have to face.
Let’s hope we see prudent decisions made for a long term, sensible energy future. This is jobs for the future, this is our environmental stewardship, it is our economic recovery. This will be the face of Vermont with affordable power, low carbon footprint, leadership in renewable growth in a responsible manner. This isn’t a pipe dream, it’s a reality that currently exists and can continue into the future. Strong capable leadership has to move this forward. It’s the only way this is going to happen and we don’t get a “do over” if we wait too long.
