“Unicorn Power” makes it out of House Energy & Natural Resources committee

by Robert Maynard

Back in January True North Reports published a commentary from Ethan Allen Institute Vice President John McClaughry entitled “Unicorn Power for Vermont!” That commentary started out by noting that VPIRG’s (The Vermont Public Interest Research Group) “green makeover” plan ran into an obstacle four years ago:  “… the VPIRG plan for the Extreme Green Makeover suffered a severe setback when Gov. Jim Douglas vetoed Sen. Peter Shumlin’s bill to levy a $25 million tax on the state’s leading generator of clean electricity, Vermont Yankee, to fund a new state entity to go about persuading Vermonters to stop wasting money on heating fuels.”

As the old saying goes “If at first you don’t succeed, try, try again.” It appears that then Senator Shumlin took this saying to heart:

The Democratic legislature failed to override the veto, but the “Senator from VPIRG” [as Shumlin was known before he was elected Governor] vowed to come back with an even more far reaching Green plan. And he did.

Shumlin’s S.350 of 2008 proposed creation of a climate supergovernment to mastermind what has been called a Manhattan Project for Green Social Engineering. It also featured strict “smart growth” land use control strategies, cap-and-trade control of greenhouse gas emissions, new Act 250 rules to impose “carbon neutrality” on developments, mandates for the protection of “dead and dying wildlife trees”, doubling (heavily subsidized) passenger rail traffic by 2028, getting all single-occupancy vehicles off the highways, steeply increased vehicle sales and use taxes and registration fees on low-mpg vehicles, energy efficiency standards that must be met before homeowners could sell their houses, and biofueled bus tours to visit biofuel producing farms.

This scheme failed as well when cooler heads prevailed. Now, Peter Shumlin is our Governor, and with a little help from his friends he is back at it again:

Shumlin’s key legislative allies of 2008 have now introduced bills (S.170 by Sen. Ginny Lyons, H. 468 by Rep. Tony Klein) to move more quickly in the direction of the bill he championed back then.

The main feature of both bills is adoption of a “Renewable Portfolio Standard”, whereby Vermont’s utilities will be required to buy ever more electricity from “renewable” sources, regardless of price.

The “Renewable Portfolio Standard” is precisely what numerous business leaders in Vermont object to as harmful to an already fragile economy. In an open letter to Governor Shumlin, Speaker Smith and Senate Pro Tem Cambell, a diverse coalition of business groups warned that this would cost Vermonters both jobs and money. One would think that such opposition would cause our leaders in Montpelier to at least pause and reflect on the potential impact of this approach. Unfortunately, that does not appear to be happening as the bill was voted out of committee on Friday.

H.468 builds upon the Sustainably Priced Energy Enterprise Development, or “SPEED” program put into effect by legislation in 2005. The bill states on page nine of section 8004: “RENEWABLE PORTFOLIO STANDARDS FOR SALES OF ELECTRIC ENERGY”: “On and after January 1, 2025, eachretail electricity provider in Vermont shall own the environmental attributes of renewable energy in an amount that is not less than 80 percent of its annual retail electric sales for the preceding calendar year.” (Emphasis added) The bill then goes on to lay out a schedule that each provider shall comply with the meet this requirement. There is a provision for energy providers to buy their way out of the portfolio requirements as spelled out on page 11 of the same section:

In lieu of purchasing tradeable renewable energy credits,to satisfy the portfolio requirements of this section, a retail electricity provider in this state may pay to the Vermont clean energy development fund established under section 8015 of this title an amount not less than the numberof kWh necessary to bring the provider’s portfolio into compliance with thoserequirements multiplied by a rate of $0.03per kWh as established by the board (2012 dollars).

A good question to ask is who will be handling the fund that these companies will be paying into in lieu of purchasing the proper energy credits? This provision appears to be a breeding ground for cronyism and political payoffs. If that was not bad enough, there is this on page 22: “In accordance with section 8005a of this section, requireall Vermont retail electricity providers to purchase from the SPEED facilitatorthe power generated by the plants that accept the standard offer required to be issued under section 8005a.” In other words, if you do not buy the approved credits, you need to pay into a prescribed development fund. If you do decide to purchase the approved credits, those purchases must be made from the SPEED program facilitator. There is also this on page 26:

To achieve the goals established in section 8001 of this title, no retailelectricity provider shall sell or otherwise provide or offer to sell or provideelectricity in the state of Vermont without ownership of sufficient qualifyingSPEED resources in accordance with this subsection.

On and after January 1, 2025, each retail electricity provider inVermont shall own qualifying SPEED resources in an amount that is not lessthan 80 percent of its annual retail electric sales for the preceding calendar yearand that includes the provider’s pro rata share, in accordance with section8005a of this title, of those qualifying SPEED resources that have acceptedstandard offer contracts and for which the SPEED facilitator is allocating coststo the retail electricity providers.

The bill then goes on to describe the compliance schedule to achieve this and the requirements to be designated a SPEED facilitator. The amount of state control over the private energy market that this bill represents is absolutely staggering.