Bill calls for renewable portfolio standard, but fails to address Vermont’s destructive energy siting practices.
A bill has been introduced in both the Vermont House (H.40) and Senate (the identical bill is S.51) to repeal the much-maligned SPEED program and replace it with a new energy program called RESET.
“Renewable” Electricity, But Not For Vermonters
The ten-year-old SPEED program (which resulted in the construction of the industrial wind turbine complexes in Sheffield and Lowell) has been widely criticized because it allows Vermont utilities to count “renewable” electricity production toward goals in Vermont while enabling the same production to be counted toward renewable energy goals in other states. Out-of-state utilities have been paying for this privilege—to the tune of $50M/year—by buying RECs (renewable energy credits) produced by Vermont SPEED generation facilities.
The sale of RECs produces revenues that utilities use to reduce the high cost of wind and solar electricity for Vermont ratepayers. But, when our utilities sell the RECs, they sell the right to call their electricity “renewable.” To some people this is a mere accounting detail; to others it sets the stage for criminal fraud. Indeed, four Vermonters have filed a complaint against Green Mountain Power for making misleading green energy claims. (On February 5, 2015, the Federal Trade Commission criticized GMP practices because they “may have caused confusion among Vermont electricity customers about the renewable attributes of their electricity.”)
Connecticut Questions SPEED Legitimacy
The practice of selling SPEED RECs is being threatened: some out-of-state utilities and some other New England states wonder if Vermont isn’t double-counting its “renewable electricity.” They question the legitimacy of RECs from Vermont.
In January, Connecticut regulators were poised to decide whether or not RECs from Vermont were legitimate; it looked like they were about to blow the whistle. But, at the last minute, their Public Utilities Regulatory Authority (PURA) postponed its ruling—perhaps at the request of the Shumlin administration. If PURA were to declare that Vermont RECs could no longer be used to meet Connecticut goals, other states might follow. Vermont utilities would lose a valuable income stream and Vermont ratepayers would face a steep increase in electricity prices.
The End of the Road for SPEED
The Shumlin administration has recognized that the only way to avoid a spike in rates is to repeal SPEED before Connecticut pulls the plug on Vermont RECs. The simple act of repealing SPEED would eliminate the allegations of double-counting and would enable Vermont utilities to continue to earn money from REC sales. But, the administration and its legislative allies say that’s not good enough—we must repeal SPEED and enact RESET simultaneously in order to avoid the $50M spike. We note that RESET’s cost could approach or even exceed $50M per year.
How Expensive Will RESET Be?
RESET would establish three targets for Vermont utilities to meet: a total renewable electricity requirement; a distributed, small-facility generation requirement; and a requirement to carry out “energy transformation” projects (such as leasing heat pumps to ratepayers). Each of these targets would carry a price tag for ratepayers. The program would also carry a price tag for Vermonters whose tax dollars would pay for the regulation and oversight of a very complicated law.
Our Position
Energize Vermont supports the repeal of SPEED, but does not support enacting RESET. We support reducing Vermont’s greenhouse gas emissions, but we regard RESET as an expensive and ineffective way to bring about reductions. And since RESET does not address energy siting issues, it has the potential to be every bit as destructive to the environment and to Vermont communities as SPEED has been.
We will say more about RESET in an upcoming update.
Contact Information:
Mark Whitworth
(802) 424-0540
Email: mark@energizevermont.org