Editor’s note: This commentary is by Dr. Ron Holland, who is an emergency physician at North Country Hospital in Newport. He is a member of the Irasburg Ridgeline Alliance, a citizens’ group that opposes the development of ridgelines in Irasburg and fosters the development of appropriately scaled and sited renewable energy projects. His protest of the Lowell Wind Project led to his arrest and conviction in 2013 for criminal trespass on land subsequently purchased for the project by Green Mountain Power.
[A]n experience on a recent trip to China from my home in Irasburg, Vermont, brought home to me the critical importance of trust in government to a functioning democracy.
I had traveled to Hong Kong for a medical conference, followed by a few days of sightseeing on mainland China. My son Abe, a graduate student and a seasoned traveler in China, served as guide. When jet lag threatened to keep us from getting a good night’s rest, I suggested that we stop at a drugstore to pick up something to help us sleep.
Not so fast, Abe reminded me. Unlike the case in the United States, there is no way of knowing that a Chinese drugstore will sell you the drug that you think you are buying. While there is a Chinese government agency focused on pharmaceuticals, its standards are a far cry from those of the U.S. Food and Drug Administration. That supposed sleeping pill or antibiotic may be something else completely. Abe had learned this the hard way on a previous trip to China when a purported remedy for altitude sickness transported him to new heights entirely. We decided to stick to counting sheep.
Without giving it much thought — and despite occasional spectacular examples to the contrary — as Americans we all depend on receiving truthful and accurate information: in the drugstore, in the wider marketplace, and in government. In the U.S., the Federal Trade Commission is responsible for ensuring truth in the marketplace. Yet sometimes, right here in Vermont, truth in the marketplace comes into question, as in the case of renewable energy.
In November 2014 the Environmental Clinic of the Vermont Law School filed a complaint with the U.S. Federal Trade Commission that Vermont utilities were behaving like Chinese drugstores. In violation of longstanding FTC guidelines, the product they were selling to the public as renewable energy was in fact not renewable energy but something else entirely. How could this be?
According to the FTC, “renewable energy” is energy that comes with associated Renewable Energy Certificates, commonly called RECs. When a company generates electricity from renewable sources, it receives a REC from the New England Power Pool for every megawatt/hour of electricity it generates. So far, so good. As long as it holds onto its RECs, the electricity the company produces is genuine renewable energy. They’ve got the certificates to prove it.
But the story doesn’t end there. A market exists for those RECs; they can be bought and sold. The value of the RECs usually exceeds the value of the electricity and commonly varies between $55 and $60 per megawatt/hour. RECs were designed as a financing mechanism to foster the development of renewable energy.
Thus, the original renewable energy producer can sell its RECs to an out-of-state coal-fired power plant, for example. Now that the coal plant owns the RECs, the coal-generated energy is considered renewable (even though the plant can go right on burning non-renewable, air-polluting coal). Obviously, the emissions from the coal plant don’t magically disappear. Instead, they are allocated by the Regional Greenhouse Gas Initiative to all those who do not hold RECs for the electricity they produce. The original producer has sold the right for its electricity to be considered renewable. That energy must now be called “null energy” instead. Null energy comes with its associated emissions burden.
So for purposes of marketing, coal-generated electricity is renewable energy, as long as it has purchased RECs; while wind-generated electricity, e.g. Georgia Mountain Community Wind, the Sheffield Wind Project, and Kingdom Community Wind, is no longer renewable, because these facilities sell their RECs. Now they are producing “null energy,” and the associated emissions count against Vermont’s carbon total.
The Federal Trade Commission essentially agreed with the Vermont Law School petition that Vermont utilities were acting deceptively. The FTC concluded that “Green Mountain Power sells RECs for many of its renewable facilities and thus has forfeited its right to characterize the power delivered from those facilities as renewable, in any way.”
While it did not penalize Green Mountain Power and other Vermont utilities for their long-standing transgressions, the FTC did say that now that GMP clearly understands the guideline, the FTC will be watching them closely. Before the FTC finding, GMP routinely advertised that “Kingdom Community Wind means clean renewable energy built in Vermont for Vermonters.” It no longer makes such claims.
So for purposes of marketing, coal-generated electricity is renewable energy, as long as it has purchased RECs; while wind-generated electricity is no longer renewable when facilities sell their RECs.
The FTC’s finding applies to all renewable energy, and within the last few months the Vermont Attorney General’s office has indicated that it will hold purveyors of solar electricity to the same FTC standard. Recent turmoil in the town of Strafford, described by Selectman Steven Marx in testimony Jan. 20 before the Senate Natural Resources and Energy Committee, focused precisely on this point.
When the Strafford Select Board believed that a solar project proposed for the site of a former mine would produce renewable energy, they voted 4-1 in favor of the project. When they found that the project would sell its RECs and thus produce null energy, with its associated emissions, they voted unanimously against hosting it. They were outraged that their sense of responsibility for Vermont’s environment had been betrayed to generate generous profits and to increase Vermont’s carbon footprint.
As a result of the outrage, the project developer reworked the financing so that it will now begin producing renewable energy for Vermont in seven years, and its entire capacity will produce renewable energy for Vermont in 10 years.
The deceptive description of renewable energy is rampant throughout Vermont policy and regulatory circles. Listen as Public Service Board Chair James Volz and a witness for Green Mountain Power discuss their understanding of the use of the word “renewable” in Feb. 4, 2011 (page 187) testimony before the Public Service Board on the Lowell Mountain wind project. (In this dialog, “the problem” refers to violation of the FTC guideline.)
CHAIRMAN VOLZ: “We could encourage all the renewables we want, put in place programs to encourage renewables, allow the RECs to be sold, but as long as we don’t make a claim somewhere publicly that we have a certain amount of renewables then, or that we have met a specific goal, then we might be able to avoid the problem.”
GMP: “I think that’s fair, and you understand the dynamic …. But I think you have it right.”
CHAIRMAN VOLZ: “Okay. Thank you.”
According to the PSB chair, “renewable” means whatever you want it to mean.
The Strafford Select Board fell into the trap set by our policy makers and were understandably outraged at their deception. The public policy supporting the Strafford project comes straight from Vermont’s renewable energy legislation — but the Strafford project will not begin to provide any renewable energy for Vermont until seven years after it starts operation.
The citizens of Vermont deserve better from our policy makers. We should elect policy makers who uphold the public good of trust in government, rather than betraying it. Our state government should require that all proposed renewable energy projects clearly set forth their long-term and short-term economic and environmental benefits and costs, including their real impact on Vermont’s carbon footprint. The citizens of Vermont deserve public ethics higher than those of a Chinese drugstore.
