A Pro-Growth State Energy Plan

by John McClaughry 

John McClaughry

The guiding principle of the Shumlin administration’s draft Comprehensive Energy Plan is “to set Vermont on a path to attain 90% of its energy from renewable sources by 2050.”

The plan also advocates for moving toward “energy independence” by requiring Vermonters to reduce their consumption of imported fossil fuels that now comprise two thirds of the state’s total energy consumption. It also supports reducing greenhouse gas emissions to 25% below 1990 levels by 2012, and 50% below by 2050, to “lower the state’s contribution to global warming.”

The most startling omission in this voluminous plan is the absence of any chart or graph showing the sources of Vermont’s electrical energy now, and the sources we can expect to enjoy in future decades if the Plan’s recommendations are acted upon.

Vermont now obtains 33 percent of its electrical consumption (GWhrs) from Vermont Yankee. If that safe, reliable base load plant is closed down in March 2012 – as Governor Shumlin directed this Plan to assume – one third of our electricity supply will disappear. How then will this be made up?

In particular, what level of ratepayer and taxpayer subsidies – tax credits, rebates, government financing, mandates, Feed In Tariffs, Renewable Portfolio Standards, and outright capital subsidies – will be required to achieve the required efficiency, and attract this amount of renewable electricity into the market?

How many acres of solar panels? How many more 450 foot wind turbines? How many gas-fired backup plants to keep grid load reasonably level? Will the resulting price of that electricity keep Vermont businesses competitive and residences affordable? This information is not included in the Plan.

In short, the Plan’s vision of a state with 90% of its total energy produced by renewables by 2050 can only be achieved by heroic, costly government intervention into the energy market, over the growing protests of taxpayers and ratepayers called upon to finance the ever-expanding renewable industrial complex.

There are some useful proposals in the Plan, but overall the Plan resolutely heads off in the wrong direction. It anticipates enormous taxpayer and ratepayer costs, ever-growing bureaucracies, and ever more extensive controls over the choices of the ordinary Vermonter, all to send Vermonters galloping after a wrong-headed goal of “90% renewable energy by 2050”.

The Ethan Allen Institute submitted twenty recommendations for a realistic energy plan. The first is to abandon the “vision” of this Plan that requires state government to use its coercive powers to see that Vermont gets 90% of its energy from renewable sources by 2050 or any other date.

Instead, the state should adopt a vision like this: “to set Vermont on a path to assure safe, reliable and competitively priced energy that will make possible a strong, competitive and growing economic base, both for creation of new wealth and income for the people of the state, and for expanded tax revenues to enable the state to meet its fiscal obligations.”

In addition, the legislature should repeal the requirement that Vermonters be forced to reduce their greenhouse gas emissions to 50% below the 1990 baseline by 2050, or any other year, and also the state’s “climate action plan”, inasmuch as nothing the people of Vermont can do, even at crippling economic cost, will ever have any detectable effect on any metric of climate change (formerly “global warming”).

While they’re at it, they should repeal the SPEED and Feed In Tariff requirements; abolish the Clean Energy Development Fund; repeal the ratepayer-financed PSB energy efficiency program; abandon consideration of Renewable Portfolio Standards for Vermont utilities; and review all existing energy regulatory schemes to remove barriers to creative energy innovations by a free people.

Legislators, bureaucrats and Governor need to consistently remind themselves that markets work, and that ordinary people usually turn out to make better use of their resources than what is prescribed for them by the experts who prepare “comprehensive energy plans.”

John McClaughry is vice president of the Ethan Allen Institute. (www.ethanallen.org)