Agriculture, wood industry need affordable, reliable, counter-cyclical energy sources like Vermont Yankee

by Bruce Shields

On Wednesday, Nov. 7, I testified before the Vermont Public Service Board in favor of Vermont Yankee continuing to make low-cost, affordable power. I did so because I believe the state of Vermont needs to favor low-cost, reliability in its energy choices, not high-cost, unreliability as is our current trajectory.

Agriculture and forestry comprises about 20 percent of Vermont’s economy, in a stable and widely distributed base of employment. Thousands more derive their living indirectly — paper mills, Cabot Cheese, Ethan Allen Furniture and hundreds of self-employed truckers, mechanics, and financial service workers.

These people look to state government to provide a stable and predictable economic framework in which they may operate. Energy is absolutely key to the success of farming and forestry. No industries in Vermont have more rapidly and profoundly modernized its production processes, and electrical energy is the indispensable base. One modern farmer with several hundred horsepower of electrical motors on his farm creates more value than 50 farmers like my grandfather could. An electric sawmill with five or six hands can put up as much lumber in a day as 30 or more hands could 100 years ago.

Both farming and forestry are dominated by small family-owned businesses which have little influence over their selling price. The market provides our income: We can only control our expenses. Electricity is one of the largest expenses for the typical farm. In 2009, Vermont Gross Farm Income was $589,827,000. The National Agricultural Statistical Service [NASS] shows electricity costing our farms $17,423,000 — 2.95 percent of GFI. After all expenses are deducted, Net Farm Income for 2009 was $97,099,000. Electricity cost equals 17.95 percent of NFI. That is no fluke. The trend has also been very adverse: in 2003, electricity was 2.72 percent of GFI, and just 11.87 percent of NFI. The upward trend in the cost of electrical energy is very harsh for agriculture and the timber industry.

Vermont Yankee has anchored the power costs of all New England. Steady and predictable generation smoothes price volatility across the region, helping to cap spikes and fill in voids. Other power sources tend to move in concert with dominant economic indicators. High energy

costs could impact farmers and sawmills precisely at the same time as other stressors like high oil costs, or a drought. For Vermont’s economic health we need to maintain as many counter-cyclical mechanisms as possible.

An operational Vermont Yankee will also inject about $100 million per year into the Vermont economy, and pay millions in statewide education taxes which already fall heavily on farm and forest land. If Vermont Yankee remains open, some of that $100 million in economic benefit will find its way to the wood products makers and farmers. But if it closes, a share of those millions in lost taxes would be inevitably transferred to them, as well. I see no upside to closing Vermont Yankee for farmers and wood products manufacturers.

Bruce Shields is the president of the Ethan Allen Institute.

2 thoughts on “Agriculture, wood industry need affordable, reliable, counter-cyclical energy sources like Vermont Yankee

  1. Good examples, but we ALL need reliable affordable power of all sorts. Power is the only backbone of civilization, otherwise we use spears to hunt and sticks to till the ground.

    Not long ago a conservationist noted “what is the use of a sawmill without a forest?” I respond, what is the use of sawmill without logs?? We see that every year as mills close.

  2. Thank you, Bruce for standing on the side of Vermont Yankee and Vermont farmers and foresters. You are right on the mark here. I have only a few head of cattle and some chickens on my small hobby farm. During the winter when I am heating a stock tank for the cattle and heat lamps for the chickens, I have seen electric bills over $500 in one month. That is outrageous!

    Also, I moved to Vermont for its beautiful mountains and trees. Now we are cutting down trees to install huge windmills all over our mountaintops. It looks HORRIBLE. Not to mention that those windmills are very rarely turning. I doubt that we are getting very much bang for our buck.

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