Shumlin says renewable energy program will be good for business
by Alan Panebaker vtdigger.org Governor Peter Shumlin touted Vermont’s progress in the renewable energy field with the signing of three bills at a small hydroelectric and solar project last Friday.
The 2012 energy bill, the most prominent of the three, will more than double the amount of favorable contracts available for small in-state renewable energy projects. That bill also holds a provision that will allow utility customers to opt out of “smart meters” free of charge.
That “standard offer” program guarantees above-market power contracts for 127.5 megawatts of local projects such as solar and hydro projects. Currently the program allows for 50 megawatts, and fewer than 10 are built.
Various heads of renewable energy companies showed up to support the bill.
Shumlin said it will be good for business.
“I think the proof that Vermont is getting this right is in the simple fact that Department of Labor statistics show that Vermont has more green high-tech jobs per capita than any state in the nation,” he said. “We are getting this right.”
This year’s energy bill ensures a guaranteed price for renewable projects that produce less than 2.2 megawatts of electricity — lending stability to the often struggling renewable power industry.
It falls short of requiring utilities to purchase and account for a set amount of renewable energy through what is called a renewable portfolio standard.
A renewable portfolio standard would have required utilities in Vermont to purchase renewable energy and retire the renewable energy credits. Under current law, utilities have to meet a percentage of their electric load from renewable energy projects. Power companies in Vermont can then sell the renewable energy credits. Other states require utilities to retire the credits.
That part of the bill came out during the final few days of the legislative session when it appeared the energy bill might not survive at all. The shift came amid persistent pressure from large industry groups arguing it would increase electric rates an unreasonable amount.
Shumlin said he has reservations about the renewable requirement from the beginning.
“I have concerns about walking the tightrope between building our renewables and keeping our current electric rates low,” he said. “Because we know there’s no greater job motivator than affordable electricity, I thought it made more sense to go with a predictable standard offer and leave the renewable portfolio standard for another day.”
The fundamental difference between the two approaches is that one requires utilities to buy a set amount of renewable energy (it would have been 35 percent by 2032), and the other allows developers to apply for the favorable contracts in the standard offer while letting utilities sell credits from that energy to other states that have renewable portfolio standards.
Tony Klein, chair of the House Committee on Natural Resources and Energy, said when it comes to getting projects built in Vermont, the standard offer is more efficient.
“The standard offer really builds real things,” Klein said. “An RPS [renewable portfolio standard] doesn’t build anything. It’s just an academic accounting system.”
Some environmental groups disagree.
Ben Walsh, an energy advocate for the Vermont Public Interest Research Group, said the standard offer will help incentivize more in-state projects, but Vermont should have an accounting mechanism also.
“The renewable portfolio standard not being included was a blow for clean energy,” Walsh said. “A complete energy policy would include an RPS.”
Others think the law goes too far and will cause spikes in energy costs for ratepayers.
Guy Page, communications director for the Vermont Energy Partnership, a coalition of businesses that supports the continued operation of the Vermont Yankee nuclear power plant, said the stability provided for renewables in the 20-year contract is a good thing for the renewable industry, it seems like an artificial cost hike that ratepayers will have to swallow.
In its tumultuous journey through the Statehouse, the energy bill became part of another bill dealing with smart meters — which offer more accurate and timely data on energy usage than traditional analog meters.
The state’s two largest utilities plan to roll out the meters as part of efforts to reduce peak electric demand, when power is most expensive and comes from the dirtiest sources.
Utilities had planned to charge customers $10 a month who opted out of the technology. Some customers have expressed concerns over the radio frequencies emitted by the meters and potential privacy issues. Under the bill signed Friday, customers will be able to opt out without having to pay the charge.
Gov. Shumlin said he was “pro-choice” on the issue but thought Vermonters would opt in once they realized the smart meters could save them money on their energy bills.
“I’m firmly pro-choice when it comes to lots of issues,” Shumlin said. “I do believe inevitably Vermonters should decided what kind of meters they want on their home. Having said that, I think when Vermonters figure out the extraordinary energy efficiency and money saved they can get from utilizing smart meters, they’ll adopt smart meters.”
Klein was more adamant about his opposition to the fee.
“I think that if smart meters are so wonderful, and they’re going to save so many people and the industry so much money why are they whining and complaining about a few people keeping what they have,” Klein said. “The point is they should be able to keep what they have.”
The governor also re-signed bills dealing with expedited permitting for small hydroelectric projects and creating a uniform tax for solar plants.