By Guy Page
Question: What “good news” will the chief executive of New England’s power grid bring the Vermont renewable power industry at its annual trade meeting this week?
Answer: he supports a carbon tax.
Gordon Van Welie is President/CEO of ISO-New England, overseers of the region power grid. ISO-NE has a lot of say on how your electricity gets produced, transmitted and paid for. Until now, ISO has insisted on buying the lowest-cost power and not favoring any form of generation over another.
But both of those hallowed principles seem to be weakening under the heavy pressure of state renewable power mandates.
ISO prefers a carbon tax because a carbon tax is someone else’s renewable power mandate problem. Right now, it’s their problem. And their solution is unpopular.
ISO has proposed CASPR, a plan to let “retiring” (a/k/a going out of business) power plants transfer their power-generation legal obligations to more expensive, intermittent wind and solar power generators. Before CASPR, expensive big wind and solar projects had no reliable path to an ISO-NE deal. CASPR lets big wind and solar projects through the regulatory back door.
Van Welie explained the appeal of carbon tax over CASPR in the February, 2018 RTO Insider, a power transmission news website:
The most effective way to achieve the states’ environmental objectives is to put an appropriately high price on carbon, van Welie said, because it would spur investment in cleaner resources.
“That could be the most efficient way of doing it through a wholesale market mechanism,” van Welie said. “It would allow us to avoid making this CASPR proposal that we recently filed at FERC. But we do understand that’s not the preferred choice of the states, and we respect that, and hence we have come up with this method for accommodating what they’re doing through above-market contracts.”
To paraphrase: ISO would prefer state legislatures do the responsible, upfront thing: bill voters for the extra cost of renewable power mandates enacted in their name. But — surprise, surprise! — legislatures would rather hide the cost of expensive renewable power by having the grid send ratepayers the bill. ISO is willing to accommodate. Like CBC’s Red Green, it is saying, “I can change. If I have to. I guess.” But since no-one likes to be the fall guy, ISO would prefer state legislatures take responsibility for the laws they passed and give the bill to their customers — the voters.
CASPR is kind of like letting your credit-challenged nephew take over the payments for a car you don’t want to drive anymore. Good news for the nephew — not so much for the risk-averse bank, which in this case is the New England power customer.
New England already pays more for electricity than any other region. Either CASPR or carbon taxation will surely cost consumers even more. It might be better to give minimal support to low-carbon nuclear power plants, and build more transmission for Canadian hydro power.
In the last five years, New England solar power has grown ten-fold, to about 2400 megawatts (MW). Almost 9,000 MW of off-shore wind has been proposed. Full acceptance of CASPR will signal Big Solar and Wind that they will have a long, lucrative career in New England, provided enough existing power plants close and transfer their obligations. Smelling blood, the renewable industry likely will increase pressure for closure of New England’s existing low-cost, low-carbon, baseload nuclear power plants, as well as the backup coal and oil-burning plants that kept the lights on during the Big Freeze of last December-January.
ISO’s support of a carbon tax in lieu of even less-appealing CASPR is great news for the Vermont and regional renewable power industry. Either way, they win. For ratepayers, it’s a choice between the rocks or the whirlpool. Someone, please turn this boat around.
Nuclear Regulatory Commission backs Vermont Yankee sale
The U.S. Nuclear Regulatory Commission Friday, Oct. 12 announced it approved the Vermont Yankee license transfer from Entergy to NorthStar Services Group, a New York-based decommissioning firm.
The approval shows the environmental and financial soundness of NorthStar’s plan to decommission the former nuclear power plant in as soon as eight years. The Vermont Public Utilities Commission is expected to deliver its decision this month. If approved, NorthStar will likely own the site before Jan. 1.
The NRC decision was welcomed by Vernon and Windham County officials, as well as the Vermont Energy Partnership, for its safety, environmental benefit, and positive economic impact. For more information see VTEP press statement.
Statehouse Headliners is intended primarily to educate, not advocate. It is e-mailed to an ever-growing list of interested Vermonters, public officials and media. Guy Page is affiliated with the Vermont Energy Partnership; the Vermont Alliance for Ethical Healthcare; and Physicians, Families and Friends for a Better Vermont.