Vermont’s Energy Policy: A Recipe for Cronyism

by Robert Maynard 

This is part III in a three part series on Vermont’s energy policy. Parts I and II can be found here and here.

In this final article I would like to take a closer look at a notion introduced in section one, namely that H.468 is a recipe for cronyism. As previously noted, H.468 builds on the Sustainably Priced Energy Enterprise Development, or “SPEED” program. This program establishes a set of rules that apply “to all Vermont electric distribution and transmission utilities, to anyfacilitator appointed by the Board under this rule, and to any in-state generation facility eligibleto be a SPEED project.” In other words, to be a SPEED approved project, one must abide by the rules specified by this program.

Why is it so important to become SPEED approved? Well, H.468 states the following: “In accordance with section 8005a of this section, require all Vermont retail electricity providers to purchase from the SPEED facilitator the power generated by the plants that accept the standard offer required to be issued under section 8005a.” In other words, not only does H.468 require that a certain percentage of annual retail sales of electricity be renewable, but it also dictates from whom the purchases are to be made. The stick being used to ensure compliance is a requirement that payments be made to a clean energy development fund in lieu of such purchases:

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 number of kWh necessary to bring the provider’s portfolio into compliance with those requirements multiplied by a rate of $0.03per kWh as established by the board (2012 dollars).

The potential for cronyism here goes far beyond what we saw in the now infamous Solyndra scandal. That scandal involved guaranteed loans, while H.468 produces guaranteed customers. With that in mind it might be a good idea to inquire as to which energy interests are behind this bill. Again as John McClaughry pointed out in a previous commentary entitled “Unicorn Power for Vermont“, the effect of H.468 is to move more quickly in the direction of a VPIRG backed bill that Shumlin championed four years ago. VPIRG has a history of inserting itself into our energy debate as a champion of wind power as noted in a 2006 Barton Chronicle article:

The problem lies on VPIRG’s board of directors. Two members, Matt Rubin and David Rapaport, are the principals in East Haven Windfarm, the company that wants to put four demonstration wind towers on East Mountain and, ultimately, erect 50 windmills on the ridge lines of Essex County.

Mr. Rubin, president of East Haven Windfarm, is former chairman of the VPIRG board. Mr. Rapaport, Windfarm’s vice president, is VPIRG’s former executive director. Both stand to make money if the state approves their projects, and lose money – possibly a good deal of money – if it doesn’t.

So it’s not about the public interest, after all. VPIRG faces a good old-fashioned conflict of interest, just the sort of thing it was organized to protect us from.

Sometimes the payoffs to those behind the scenes at VPIRG are more obvious, as pointed out by True North Report’s Rob Roper in a 2009 Editorial:

The press had done a good job shedding some light on the $8000 donation to Peter Shumlin by big time donor David Bilttersdorf, Shumlin’s appointment of Bilttersdorf to the Clean Energy Development Board, and Bilttersdorf’s company ultimately receiving $4.3 million tax credits from that very board.

However, this $8000 investment with an apparent $4.3 million payoff is just the tip of the iceberg, and only presents one small aspect of how a few wealthy special interests are manipulating the political process to extract millions of dollars from Vermont taxpayers.

Keep in mind that the Clean Energy Development Fund is the recipient of payments to be made by those who do not buy renewable energy credits as defined by H.468. That is just part of the web that VPIRG is weaving for its paymasters:

And, perhaps not so coincidentally, it’s the same Peter Sumlin who is leading the charge to shut down David Blittersdorf’s number one business competitor, Vermont Yankee, with the help of another organization of which David Blittersdorf just happens to be a board member – VPIRG.

We don’t know how much money Bilttersdorf has donated to VPIRG as that organization is under no legal obligation to disclose the names or amounts of individuals who donate. However, VPIRG’s half a dozen lobbyists in the State House, grassroots activities, and ad campaigns have been tightly linked to the Blittersdorf’s business agenda.

One would expect that VPIRG would want to expand its connection to actual energy companies if the schemes contained in H.468 are passed into law. There is a ton of money to be made in the energy market if you have an inside seat next to those deciding what forms of energy are to be purchased and from whom. Sure enough, VPIRG has recently decided to spin off its own solar company:

Duane Peterson, president of the VPIRG board of trustees, and James Moore, former VPIRG Clean Energy Program director, started the company last fall after a VPIRG energy pilot program proved successful.

“It was a pilot project within the nonprofit,” Peterson said. “The tail started wagging the non-profit dog, and in order to make it available to all Vermonters, we really needed to increase the scale.”

I think that “the tail started wagging the non-profit dog” a long time ago. The dog now fetches whatever the tail (alternative energy company interests) deems to be in their interest. With schemes like H.468 in the works, it is no wonder that they “really needed to increase the scale.”