The Word in the House 1/21/2015 - Setting the Stage for Environmental Action

Many observers were disappointed when Governor Shumlin's inaugural speech barely mentioned the three issues that were foremost in Vermonters' minds in 2014: property taxes, education spending and health care. Instead, his inaugural speech focused primarily on the environment. He began by laying out his "agenda for progress" emphasizing the positive accomplishments in the growth of the renewable energy industry in Vermont with an accompanying 15,000 new jobs, "pioneering the development and deployment of locally generated, low carbon energy, creating jobs and putting money in Vermonter’s pockets while we do it.” He noted that while neighboring New England states are seeing double-digit increases in electric rates, Green Mountain Power, Vermont's largest utility has reduced rates by more than 2%. He is proposing a new Energy Innovation Program (EIP) to replace the SPEED (Sustainably Priced Energy Enterprise Development) program which was responsible for the strong growth of Vermont's renewable energy industry and which expires in 2017. If implemented, the EIP is projected to: Create over 1,000 new jobs; Save Vermonters hundreds of millions of dollars on their energy bills; and Cut greenhouse gas emissions by approximately 15 million metric tons, nearly a quarter of the reduction needed for Vermont to be on track to meet its 2050 climate goal. To this end the House Natural Resources and Energy Committee on which I serve will be taking up a bill this week to create the new renewable energy standard for the future.

The second part of his agenda focused on the cleanup of Vermont's waterways, especially Lake Champlain. Lake Champlain is a critical part of our economy and its protection is vital to keeping Vermont the place we know, enjoy and love. We all know of the problems with blue-green algae blooms in the northern part of the lake and in Lake Memphremagog. This is due to excess phosphorus loading that originates primarily as a result of runoff from farms and impervious surfaces like roads and parking lots. Together these sources are responsible for 70% of the phosphorus that flows into Lake Champlain from its streams and tributaries. The EPA has put Vermont on notice that it is in violation of clean water standards and we have to move now to clean it up. As Governor Shumlin said in his speech, "If we don't do it, it will be done to us." The Administration will work to implement the Lake Champlain restoration plan submitted to the EPA last spring, the most comprehensive and strategic effort yet undertaken by Vermont to protect and restore the state’s waters. It will include assistance to farmers and municipalities as well as provide strong regulatory enforcement. The Natural Resources and Energy Committee will be working in tandem with the Fish, Wildlife and Water Resources Committee and the Agriculture and Forestry Committee to address this issue.

A week after his inaugural address, Governor Shumlin delivered his budget address and did put a spotlight on property taxes, education spending and health care. In addition to a balanced budget that closes a $94 million budget gap, the Governor laid out the rest of his aggressive agenda that includes proposals to cut in half the Medicaid cost shift, reduce private health insurance premiums, help get school spending under control, eliminate the cost of an associate’s degree for some Vermont students to provide Vermont employers a pipeline of skilled workers, and increase economic development incentives. I plan to address this part of his agenda in a future article.

Legislative Report 4/5/2012 - An Energy Roadmap

Last year the legislature enacted an energy bill that continued a policy of supporting the renewable energy industry in Vermont.  This year our House Natural Resources & Energy committee spent a good deal of time working on another energy bill (H.468) that creates a roadmap for the next 20 years to extend Vermont's leadership in energy policy in order to reduce greenhouse gas emissions and promote job growth in the renewable energy industry.  It sets a goal of achieving 75% of Vermont's total electric energy from renewable sources by 2032 and includes a Renewable Portfolio Standard (RPS) of 35% new renewables by 2032, including 10% from small-scale, distributed projects.

Up to now the renewable energy goals were only goals.  Vermont utilities have been making good progress increasing their renewable portfolios so that Vermont can today count almost 50% of the electric energy we consume as renewable.  This includes the energy we get from Hydro Quebec. Two utilities, Burlington Electric and Washington Electric Co-op, are at or near 100% renewable.  By adopting a Renewable Portfolio Standard, each utility will be required to have a percentage of the electricity it sells to be renewable, including the renewable attributes, from a source built since January 1, 2005.  The percentage increases from 4% by 2017 to 35% by 2032.  (Hydro Quebec power does not count toward the 35%.)

Renewable attributes, also known as renewable energy credits or RECs, are tradable commodities associated with renewable energy and have a cash value.  Under the SPEED program, a utility that owns a renewable energy plant can sell its RECs, thereby reducing the cost of the electricity to its customers while still counting them toward their Vermont goals.  Meanwhile, the utilities buying the RECs also counted them in their portfolios.  Vermont happens to be the only state that allows this double-counting to occur.  This has the effect of undermining renewable energy development in the region because other states can satisfy their RPS requirements by buying RECs from Vermont.  The RPS will correct this situation by gradually requiring ownership of the RECs by Vermont utilities.

A key component of the RPS is an expansion of the Standard Offer program, which guarantees long-term, stable prices for renewable energy generation.  The Standard Offer program is currently capped at 50 megawatts (MW) of distributed renewable energy generation but will grow to 150 MW over 10 years. The annualized growth of 10 MW/year for 10 years sets an achievable pace that creates price stability, avoids boom/bust cycles, and benefits from decreasing renewable energy prices over time.

Finally, the bill requires the Department of Public Service to analyze and report on the status of the retail electricity market in Vermont and the effects of the SPEED and Standard Offer programs on the market, on renewable energy generation, and on greenhouse gas emissions, and to make recommendations for changes to the programs if indicated.  The bill passed 91-46 and is now in the Senate.

On another topic, the miscellaneous tax bill passed in the House on a vote of 125-14. The bill includes a repeal of the double counting of interest and dividends for income sensitivity.  However, it maintains the $500,000 cap on homestead property value for income sensitivity.  During the presentation of the bill on the floor I voiced support for the repeal of the income calculation but objected to not repealing the $500,000 cap which affects many Charlotte residents whose home values have risen disproportionately to their incomes.