by Angela Chagnon and Agnes Clift
Tom Evslin, former Vermont Chief Technology Officer and member of the Clean Energy Development Fund Board, testified Tuesday about Governor Shumlin’s plan to keep the Clean Energy fund operating.
The original idea was to charge ratepayers 55 cents on every electric bill for 12 months to replace VT Yankee’s contributions to the fund. Shumlin decided not to go that route and instead proposed offering businesses that use the fund the option of immediate cash grants instead of the current five-year tax credit.
“I’m glad we are not adding 55 cents a meter on electric bills,” Evslin began. He said that if the state “simply waits”, more of that money may be left on the table.
According to Evslin, applications to the tax credits in the Clean Energy Development Fund are currently limited to profitable businesses that can use tax credits. “This is meant to grow business,” he said.
Applicants for the credits oversubscribed four to one, so the credits were given out on a “first-come, first-served” basis. Evslin remarked that less profitable projects may have jumped in ahead of those who took their time to create more profitable projects.
Evslin warned that Governor Shumlin’s plan may unintentionally allow non-Vermont businesses to receive the money. Individuals, non-profits and towns currently cannot apply for the tax credits, but they may be allowed to apply for the grants.
Suggesting that the state leave the program “as is”, Evslin predicted that Vermont will recover more funds by continuing to offer the five-year tax credit than by offering grants. With the current system, tax credits for projects that are not built within the timeline can be recovered and put back into state capital projects.
Furthermore, Evslin said that the tax credit encourages profitability by incentivizing businesses to generate enough profit to take advantage of the tax credits, thereby ensuring that the only businesses to receive the tax credit are successful ones.
“Some of these businesses are working with private entities and sharing the tax advantage,” said Evslin.
He also said that “projects must be completed and online” before they receive any money from the fund. He suggested doing a survey of projects and reclaiming any unused funds from incomplete projects.
Evslin disclosed that there is about $1 million more in the fund than expected, with more money coming into the fund from VT Yankee than previously anticipated.