Electricity supplier won’t buy Vermont renewable energy credits

One of the nation’s top renewable power suppliers said it will no longer trade Vermont’s renewable energy credits, which are also counted toward the state’s clean electricity goals.

nexteraenergy 3

NextEra Energy announced last week that it will no longer take double-counted power in a letter to New England renewable energy credit brokers. The $15 billion North American company purchases and sells renewable energy credits (RECs).

“It is a fundamental principle of all renewable energy market sales that the environmental characteristics associated with the electric energy generated cannot be counted or claimed twice,” NextEra Energy officials wrote.

Renewable power producers can sell RECs to other companies to meet state renewable energy standards. Vermont utilities often sell credits for renewable power generated in the state to out-of-state power suppliers. Under Vermont’s clean energy development incentive program, this renewable power also counts toward the state’s clean energy target.

On Jan. 1, Connecticut banned the purchase of Vermont credits that are also used to meet the state’s renewable energy target. As a result, NextEra, which provides electricity in Connecticut, will no longer trade Vermont RECs in Connecticut.

Critics of Vermont’s program say the state is claiming renewable energy credits that are sold to other states.

“The Connecticut Legislature did this because they knew that Vermont was trying to create the perception of being green without paying the full price of being green,” said Kevin Jones, deputy director of the Institute for Energy and the Environment at Vermont Law School.

He said Vermont is selling its renewable energy to other states while importing fossil fuel-generated electricity. By claiming those credits to meet Vermont’s renewable energy targets, Jones said, companies could be liable to pay penalties for purchasing fraudulent credits.

Darren Springer, deputy commissioner of the Department of Public Service, provided the department’s recommendation for a net metering program to the House Committee on Natural Resources and Energy. Photo by John Herrick/VTDigger

Darren Springer, deputy commissioner of the Department of Public Service. Photo by John Herrick/VTDigger

Darren Springer, deputy commissioner of the Vermont Department of Public Service, said NextEra’s announcement will not slow renewable energy development in the state.

“There’s going to be a value to the renewable energy credit regardless,” Springer said. “It doesn’t necessarily signal a broader market issue at this point.”

RECs currently sell on the market for about 6 cents per kilowatt-hour. Springer said the sale of RECs reduces rates by about 5 percent.

The state’s largest utility, Green Mountain Power, has sold $22 million in RECs to date, a company spokesperson said. The state also counts this renewable power generation toward the statewide renewable energy targets.

“This basically seems like blatant fraud to me,” said Ben Luce, a Lyndon State College professor who last year unsuccessfully lobbied lawmakers to revise the program.

“The net effect of this is it gives Vermonters a false impression of how much renewable power costs,” he said.

Luce is an outspoken opponent of Green Mountain Power’s Lowell Mountain wind project. Lowell voters have voted twice to support it, but he said residents may be hesitant to back a project that produces renewable power legally credited to other states.

He said the statement from NextEra, a key industry player, could force Vermont to reconsider its renewable energy incentive program.

“It could finally expose this whole thing,” he said. “It could bring about pressure to have a renewable energy standard.”

The state operates under what is called the SPEED program, which is designed to move the state toward generating 20 percent of its power from renewable energy by 2017 by providing developers incentives for their projects.

Vermont is the only state in the nation that sells RECs and counts the power towards its renewable energy target, Jones said.

The Department of Public Service will report back to lawmakers next year on the environmental and economic benefits of adopting a renewable energy portfolio standard. Unlike Vermont’s current voluntary program, an RPS would require Vermont to sell or keep renewable energy credits.

Correction: Residents of Lowell have voted twice to support the Kingdom County Wind project. Residents of surrounding towns have not voted on the matter.


John Herrick

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44 Comments on "Electricity supplier won’t buy Vermont renewable energy credits"

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2 years 6 months ago

This action by NextERA comes only a few months after Connecticut Light & Power asked REC suppliers to cited whether their offerings were tied to Vermont SPEED projects. Watch for other load serving entities to follow suit.

Richard Ratico
2 years 6 months ago

Meanwhile, NextEra is on the Connecticut Attorney General’s list of ten companies who may be overcharging ratepayers.

Annette Smith
2 years 6 months ago

A correction: Only Lowell voted on the wind project. $500,000 a year went a long way in that town. No other towns in the area voted.

2 years 6 months ago

Annette, Thank you for the correction.

Steve E. Wright
2 years 6 months ago
John Herrick made a grievous error when, referring to the Lowell project, he reported, “Towns adjacent to the project have voted to support it ……….” No towns other than Lowell voted to support the dumb decision to tear up a mountain in order to sell green credits to southern New England polluter plants. And Lowell taxpayers profited handsomely from that action. For three years many people have told the governor, the Legislature, the Judiciary, the Public Service Board, the Public Service Department and anyone else willing to listen that the SPEED program is a sham and disgrace. Now, SPEED cooks… Read more »
2 years 6 months ago

Steve, Thank you for the correction.

2 years 6 months ago
Steve, You are being too nice. SPEED is not only a fraudulent sham and a disgrace, but it far too expensive for poor Vermont. Here are the production and cost data from the DPS website: Here are the production results for the SPEED Program, 2.2 megawatt or less: 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. NE annual average grid prices are about 5 c/kWh. Such high RE energy costs will increase Vermont household electric rates, which already are the… Read more »
Wendy Wilton
2 years 6 months ago

Willem and others, thank you for your insightful comments to this important article about Vermont’s flawed energy policy. Kudos to VTDigger for getting to the facts.

Kevin Jones
2 years 6 months ago
Two utilities cannot consume the same MWH of electricity. It is a simple fact. Since Vermont utilities sell almost all of their renewable energy credits out of state ,Vermont’s renewable energy goals and programs are an illusion. Vermont is largely subsidizing large renewables (both wind and solar) to be sold to out of state customers. This makes as much policy sense as it would for Vermont taxpayers to subsidize school construction in Vermont in order to educate students from CT and MA. Most Vermonters would just call that ridiculously bad policy but that is what our political leaders are doing… Read more »
2 years 6 months ago
Kevin, You keep making the same error, and, what is worse, are creating the wrong impressions in the minds of lay people. You are mixing the bookkeeping and which state gets the CO2 emission reduction credit with the physics. Vermont utilities, etc., sell the RECs associated with PRODUCING renewable energy to out-of-state entities. It is allowed by a dysfunctional Vermont SPEED law. See my above comment. Physics: The energy itself is fed into the grid, as electro-magnetic waves (the electrons vibrate in place at 60 hertz), and immediately dissipates, at near the speed of light, all over the grid, to… Read more »
Kevin Jones
2 years 6 months ago
Willem I agree with you on the physics. If there are two utilities in New England with one in MA and one in VT. The MA utility contracts for 100 MWh with a coal plant and the Vt utility contracts for 100 mwh with a wind farm. The Vermont utility sells all of its RECs to the MA utility so the MA utility can claim to be 100% renewable. Then if the only other energy resource is the coal plant isn’t the accurate accounting that the Vermont utility must be buying the coal energy and claiming the significant greenhouse has… Read more »
2 years 6 months ago

Kevin,

Your hypothetical case is not the real world.

New England has a mix of sources, and any utility can buy that mix as much as it wants from the grid at an average price of about 5 c/kWh, a very good deal, partially so because of low-cost nuclear, and low-cost gas, and low-cost hydro.

The MA buying the VT RECs and then claiming to be 100% renewable is as phony as a $3 bill. Only lawyers and politicians can argue it to be true with a straight face.

John McClaughry
2 years 6 months ago
It’s interesting that both the fans of subsidized renewable energy (Jones and Luce) and the opponents (i.e. Post and me) completely agree that what Vermont state government is doing here is fundamentally dishonest. Vermont has had a well earned reputation for honest dealing, but like looting the teachers retirement fund to pay post retirement health benefits, the double counting of RECs is a black mark on our public character. Once the power market refuses to buy Vermont RECs out of state, Vermont consumer power prices will go up, and then maybe enough Vermonters will catch on and vote to scrap… Read more »
Kevin Jones
2 years 6 months ago
John is correct that people should note with interest that I never agree with him with the exception of this issue. I am a strong supporter of meaningful renewable energy programs, transitioning to electric vehicles, and taking all sensible actions to mitigate climate change. Unfortunately similar to John I believe that Vermont renewable energy policy is a sham. No other state plays these shell games with renewable energy and as a result our citizens are subsidizing programs that are not benefiting the climate and thus these entities are both wasting ratepayer money and misleading the public about their climate benefit.… Read more »
Vanessa Mills
2 years 6 months ago
WELL SAID, Kevin Jones. It is very frustrating how certain individuals continue to try and drub out the common sense you have articulated so clearly here. With the same old continued static, certain individuals I needn’t even name, deceitfully lump people together and over-generalizing with no basis. (What’s in it for them, I wonder.) I too am for renewables that are sited appropriately and scaled to Vermont and that are done in such a way that benefits instead instead of divides Vermont communities. And I’m vehememntly opposed to the racket pushed down on the people for as Kevin states: “The… Read more »
2 years 6 months ago
Kevin, “No other state plays these shell games with renewable energy and as a result our citizens are subsidizing programs that are not benefiting the climate and thus these entities are both wasting ratepayer money and misleading the public about their climate benefit.” You are spouting nonsense again. Vermont’s RE programs DO increase RE on the NE grid, and they DO displace energy from OTHER generators. In the extreme, if those programs were to generate ALL energy on the NE grid, zero energy would be needed from the OTHER generators. Regarding Vermont’s RE programs, the world’s CO2 IS being reduced.… Read more »
Annette Smith
2 years 6 months ago
Root cause? How did we get here? Back in 2005, when Robert Dostis chaired the House Natural Resources and Energy Committee, the discussion was about establishing a Renewable Portfolio Standard. The utilities balked. Time was running out. Scudder Parker came in and saved the day by coming up with a voluntary program that the utilities agreed to. I do not recall any detailed discussion about the ability to use the RECs to meet the SPEED goals while also selling them out of state so other states could meet their RPS. Maybe it was discussed, perhaps it was not. In any… Read more »
2 years 6 months ago

Annette,

Hypocrisy from top to bottom.

A circle of crony-capitalist deceit and obfuscation, to gather as much RE and EB-5 and F-16 subsidies as quickly as possible, to keep the near-zero-growth Vermont economy from becoming even more of a basket case.

It would be better, and more challenging, to have a more business-friendly, less government-intrusive, less taxing economic climate that attracts talent and capital.

Carl Marcinkowski
2 years 6 months ago

I’d like to hear the Governor comment on this. He’s been very vocal about the green energy initiatives and how much good it does. I’m sure he was aware of how this game worked and thought it not to be a scam. What say he?

Robbin Clark
2 years 6 months ago

It’s about time our legislators wake up and stop feeding us to the wolves. We are being forced to do all of the sacrificing while the fat cats get fatter. We have lost an intact eco-system, we have lost head water streams, we have lost critical wildlife habitat, we have friends and family members getting sick from living to close to the industrial wind plants and we have lost our community and we are paying the high utility prices for non-renewable projects.

Ralph Colin
2 years 6 months ago

Just another feather (?) in the Shumlin administration’s cap. Taking care of his friends and dumping on everyone else by employing questionable methodology. How long must we tolerate such problematic practices?

Chet Greenwood
2 years 6 months ago

This renewable energy scheme is Crony Capitalism at it’s best.
Could it possibly be our Governor and his campaign contributors who engineered this program?
Unfortunately, Vermont ratepayers get stuck paying the tab!

Bob Orleck
2 years 6 months ago
Somebody needs to be sued here! Where is the accountability? Or even better, some of these folks need to go to jail. When that happens maybe the fraud and deceit will stop. Folks, you keep hearing of these horror tales that are wrecking our economy and our state at our expense. The aliens in control of our government are NOT your “father’s democrats” and those who vote the party line over and over without care for what these supposed leaders are doing are the cause of the problem. Vote this time and vote Shumlin and those who walk in lockstep… Read more »
Brett Gaskill
2 years 6 months ago
This May sting a little (or a lot) to some, but if you are an adult, you need to assume your responsibility to listen to the truth. This is just another example, in a long line of lies and deceit that is the hallmark of the disease that afflicts our government, and our society in sadly increasing degrees. Is relies on lies and charades to trick a populace that has been dumbed down. It promises grand things…..”free meals” and “affordable universal health care” that will magically appear from a governmental fountain of money. But honest adults know there is no… Read more »
John Greenberg
2 years 6 months ago
Various commenters here appear to be suggesting that Vermont’s decision to allow the sale of RECs benefits power companies (large corporations) and harms ratepayers. In fact, the sale of RECs allows the power companies to charge LESS for Vermont projects – which as Kevin Jones properly points out should no longer be called “renewable” – than would be the case if RECs were no longer sold. Doing so, makes these projects more palatable to ratepayers, which is precisely why – I would imagine – the legislature continues to allow them. Personally, I think it’s time to end the program and… Read more »
Annette Smith
2 years 6 months ago

It will harm ratepayers when the market for Vermont RECs evaporates. That is what this article is about and it is happening.

2 years 6 months ago

Brett,

Great comments.

Annette,

Thank you for clear-headed thinking, calling a spade a spade.

The REC scheme aims to make RE less costly to Vermonters.

As the REC scheme evaporates, the electric rates of already-struggling Vermont households and businesses (already 4th highest in the US, right after Hawaii, Alaska and Connecticut) will become even higher as more of the expensive, variable, intermittent, SPEED energy is produced.

Numerous studies show Renewable Portfolio Standards, RPS, INCREASE household and business electric rates.

http://www.manhattan-institute.org/html/eper_10.htm

John Greenberg
2 years 6 months ago

“It will harm ratepayers when the market for Vermont RECs evaporates.” In other words, it will harm them when it stops helping them!

John Greenberg
2 years 6 months ago

I really should have said IF AND when it stops helping them, since there is no certainty here.

Avram Patt
2 years 6 months ago
A few clarifications are in order, especially regarding some of the comments. (Although my comments & opinions are my own, they are informed by having been involved in both legislative discussions about RECs, renewable portfolio standards and SPEED, as well as by the sale of significant amounts of RECs on behalf of my former employer, Washington Electric Co-op. ) Although it has been amended and added to a number of times, the SPEED program was established in 2005 and signed into law by Governor Douglas and predates Governor Shumlin. I think it has been understood since the beginning of the… Read more »
Kevin Jones
2 years 6 months ago
Avram Is confused in his discussion of the impact of REC sales from Vermont utilities. Two customers cannot consume the same MWH of renewable energy. It is accepted industry practice for a contract in New England that is stripped of its environmental attributes to give that contract the environmental attributes of what is called the residual mix in New England. The residual mix is what is left over on the New England power grid after all the renewable energy certificates are claimed by others. For NewEngland the residual mix is 60% fossil fuel and 40% nuclear. So when you take… Read more »
Avram Patt
2 years 6 months ago
I don’t know how many times this needs to be repeated but here goes, using two examples from WEC’s supply portfolio during my tenure. WEC purchased from its subsidiary 100% of the energy generated by the Coventry landfill gas plant, and purchased 10% of the energy generated bt First Wind’s Sheffield wind project. As Willem points out, the electrons from those facilities did not travel to WEC’s members’ meters but rather simply went out into the grid as any generation would, whether the RECs were sold or retired. However, WEC was contracted to receive a defined amount of power based… Read more »
Bob Stannard
2 years 6 months ago

I think you should repeat it at least one more time; maybe three or four. It’s like advertising. The regular naysayers and deniers that show up here everyday will need to here this numerous times, but most likely will still not choose to believe it.

Paul Lorenzini
2 years 6 months ago

If a lie is repeated often enough and loudly people will believe it right Bob? The problem is that only the folks profiting from wind support it, and the majority of folks have to pay for it on their ever shrinking incomes. What’s your stake, saintliness to the earth?

Peter Arthur
2 years 5 months ago

As I recall, the claim “WEC members benefitted from the revenue the Co-op received in exchange for forgoing the ability to call it renewable” was in fact a 19% rate increase for the members during this tenure. One of the “reasons” for this was claimed in WEC’s newsletter as due to “devaluation and poor trading markets” for these very same REC’s.

2 years 6 months ago
Kevin, “Since according to the physics the energy travels at the speed of light and follows the path of least resistance and we cannot track or follow who gets it.” You are still mixing things up, because you do not understand physics. As I stated supra, electro-magnetic waves travel at near the speed of light and fill in voltage valleys as they spread across the grid. They do not take the “path of least resistance”. Anything continuing to travel at near the speed of light obviously finds little resistance. The voltage valleys are due to consumers drawing energy from the… Read more »
David Bresett
2 years 6 months ago

Time for everyone to get into the renewable energy market. Each and every household needs to get the power companies and their bogus run operations off our backs. The power companies don’t care about people, only profits. Anyone that doesn’t like renewable energy is either braindead or tied to the profits of the power co elite.

Carl Werth
2 years 6 months ago

Why and how has Robert Dostis been able to benefit for so long with no reprisal or consequences? How is this allowed by our system of government in Vermont? Why is there no law to stop legislators from benefiting in such a way – guiding legislation through to passage and then jumping ship to the very industry the legislation was written to benefit? These are very troubling questions to me. This type of thing should be illegal in my mind.

Kathy Nelson
2 years 6 months ago

Good sir, when it come to crony capitalism you ain’t seen nothing. Dostis is a dust speck in a mountain of dirt:

http://www.windaction.org/posts/40512-ed-markey-lawmakers-rake-in-cape-wind-dollars#.U3x5HPldVzY

Annette Smith
2 years 6 months ago
See these photos https://www.facebook.com/bmlgreenguy/posts/10203862847281281 from a recent fundraiser for Rep. Peter Welch. The header says Mary Powell was there, and there are pictures of David Blittersdorf and Robert Dostis, among others. All very cozy. Does it matter that Congressman Welch’s is one of the three members of the Public Service Board? No. Should it matter? Yes. The “club” is setting policy, which feeds itself at the expense of increasingly more Vermonters. Energy Action Network, eanvt.org, is another manifestation of the inner circle setting policy, about to launch a new campaign that their PR people came up with called “Brighter Vermont”,… Read more »
Don Peterson
2 years 6 months ago

Vermont is a cartoon state with a cartoon green energy policy.

We claim to have a “citizen legislature”, but our regulations are written by partisans for the industries affected.

Our tourist websites show nice green fields with cows grazing in them, while we erect gigantic steel pylons on every ridge and roadway.

Our leaders blather on about “shared sacrifice” and “confronting fossil fuel dependence” and then jet off to islands in the Carribbean.

Vermonters are smug about themselves, and as this article demonstrates, deluded as well.

2 years 6 months ago

To correct the correction it is called Kingdom Community Wind.

2 years 6 months ago

Sam,
A feel-good misnomer thought up by PR people to lull the mostly uninformed/malinformed lay public

2 years 1 month ago

There is a tremendous amount of misinformation and a greater lack of understanding exhibited here. Before you swallow the garbage from both sides you need to have a an accurate knowledge of what you are speaking about. Study a lot and then come discuss these issues without the hype. It is this kind of dialogue that makes issues worse.

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