by Angela Chagnon
At a press conference held at the statehouse Tuesday afternoon, House Minority Leader Don Turner (R-Milton) outlined Republicans’ questions and concerns about Governor Shumlin’s plan to fund the Clean Energy Development Fund.
The Governor announced his plan on Monday to add grants as an option for renewable energy developers to use, with 50% of those grants going into the Clean Energy Fund.
“Our question is, are we really going to save money moving from tax credits to grants?” asked Turner. “We support renewable energy projects and the use of the Clean Energy Fund. We do not support increasing ratepayers’ costs. We’re thankful the Governor has come off of that thought process.”
Turner said that they weren’t sure that the savings Governor Shumlin had projected could be attributed to converting the tax credits to grants, and pointed out that “some of the approved projects were already dead.”
“We also know that 20% of the total number of projects will never get built,” Turner continued. “So those tax credits will never be utilized. Grants up front, or actual dollars spent today, may be more costly than the tax credits projected over five years.”
Oliver Olsen (R-Jamaica) spoke about the fund’s current laws regarding tax credits versus the Governor’s proposed plan.
“We need to remember that this is a business tax credit for solar, electric, and solar hot water heating projects,” Olsen began. “This credit is designed to be used over a period of five years and it requires that there be a tax liability that the credit can be offset against. And what that means is that if that business does not actually have tax liability, the credit itself has no value.”
“So what we’re looking at under current law,” continued Olsen, “is a possibility that there are businesses…that have limited tax liability that would reduce the value of those credits. When that happens, there is an organic savings under current law that we would realize. So what we’re doing now, what the Governor has proposed, is to give developers an option, to give them a choice, whether they want to take the tax credit over time at 100% value of that tax credit, or whether they would prefer to take cash early on at a 50% discount.”
Due to the fact that developers are the only ones who truly know their tax liabilities, Olsen said that “it was reasonable to conclude that those developers will make the most financially advantageous choice.”
“Under that scenario, the Clean Energy Development Fund actually comes out worse than it would under current law,” Olsen declared.
“This is the first sign of cost shifting we’re seeing from the closure of Vermont Yankee,” said Turner. “Vermont Yankee has contributed 12 million dollars plus to this fund since its creation.”
Turner said that he wanted to be sure that no one project developer would receive more than 10% of the total grants given in the Governor’s proposal. “We don’t want one developer to receive all this grant money going forward,” he reiterated. He said that the Republicans would offer an amendment to address that issue when the bill came up for discussion.
During the question and answer period, Olsen pointed out that according to information provided by the Clean Energy Development Fund, the most expensive, financially nonviable projects received the most funding while more inexpensive, more efficient projects received less funding.
When asked what the Republicans’ plan was to keep the Clean Energy Fund going, Turner replied, “Relicense Vermont Yankee. That is a solution that is on the table. That’s already up and funding the Clean Energy Fund, and until [Vermont Yankee] closes that’s going to continue.”
The Clean Energy Development Fund is not the only problem the state will have to deal with should the Vermont Yankee nuclear plant close in 2012.
“We agree that this is a Vermont Yankee cost shift,” said Guy Page, a lobbyist with the Vermont Energy Partnership. “Further cost shifts will be lost revenue sharing, increased power rates, and about $10 million in lost state revenue. If the legislature is concerned about 55 cents a month in increased expenses, how much more should they be concerned about far greater costs down the road?”