The future of wind power aired at VEC annual 

DERBY – Vermont might not need more than three wind projects, the new Public Service Department commissioner told members of the Vermont Electric Cooperative at its annual meeting Saturday.

Liz Miller outlined her view of the state’s energy options to about 200 members who gathered at the Elks Club.

Members also questioned choices made by company officers and the board. Chief executive officer David Hallquist defended those choices.

The focus of controversy was, as it has been the past year or so, the wind project proposed for construction on Lowell Mountain. Mr. Hallquist defended the VEC board’s decision to contract with Green Mountain Power (GMP) to buy power from the completed project.

Mr. Hallquist said GMP is offering electricity from the project at cost. When the green energy credits earned by the project are taken into account, electricity from the proposed wind development will cost between 7.4 cents and 8.4 cents a kilowatt, he said.

In contrast, he said that Entergy Corporation offered a fair deal, but not a great deal, to the co-op when it tried to persuade VEC to commit to buying power from its Vermont Yankee plant.

Mr. Hallquist said he told officials at Entergy they would need to offer a great deal to get the attention of the co-op’s board. Had they offered a five-year fixed rate contract, they might have gotten a favorable vote, but instead the company offered a variable rate, Mr. Hallquist said.

He said Entergy offered to set an upper limit to power costs, but that cap was a high one, he said. Speaking after the meeting Mr. Hallquist was more harsh in his assessment of Entergy.

VEC was Entergy’s only friend in Vermont, he said and the Entergy negotiators treated the co-op badly. He said he was very angry about it but tried to hide his feelings so as not to inappropriately influence the board’s decision.

When he was asked by a reporter about Entergy’s pending lawsuit against the state, Mr. Hallquist said he believes the company thinks it can get through two fuel cycles at Vermont Yankee in the years it will take for the case to be resolved.

Mr. Hallquist said VEC is moving forward in the use of smart metering technology, which both allows the co-op to monitor a member’s energy usage as it takes place and permits a user to go online and see how much electricity he or she is using.

He said the co-op was ahead of 99 percent of the nation’s other utilities and recently received a grant that will allow it to study how well the technology to hold down costs.

Another 360 members will get an in-home display that will show them how much power they are using and its cost all day long. A third group of 350 will get both the advice and the device.

Mr. Hallquist said the study is intended to find if any of these techniques will affect people’s use of electricity. The goal, he said, is lowering the amount of power used by the co-op at times of peak usage, which will in turn bring down rates, overall.

In her remarks Ms. Miller called the study described by Mr. Hallquist “a big deal.” She said the co-op’s leadership in smart metering has resulted in the state receiving a grant that will allow Vermont’s other utilities to catch up.

Ms. Miller said her department intends to put together a statewide energy plan, that includes transportation and home heating, as well as electrical power. She said the state is not meeting its energy goals and needs a plan that will move it forward.

Her agency will finish its draft of a plan by October 15, she said, so Governor Shumlin and the Legislature will have plenty of time to review its suggestions before the 2012 session starts in January.

“We need a plan to take into account the post-Vermont-Yankee future,” Ms. Miller said.

One aspect of the plan will be how much of a part wind power will play in the state’s energy future. Ms. Miller showed a chart that showed wind generates less than one percent of the state’s electricity.

Right now three projects are under construction or are being considered by regulators.

These are the expansion of the existing facility in Searsburg, First Wind’s Sheffield project and the one under consideration for Lowell Mountain.

Should all be built, Ms. Miller said, they will supply about 6 percent of the state’s needs. Ms. Miller said she didn’t think the plan will call for a much higher percentage than that.

One aspect of the power equation Ms. Miller said the state will continue to focus on is efficiency.

She said more money will be provided to Efficiency Vermont, which coordinates the state’s efforts to hold down electric usage, although not without careful scrutiny of the organization’s results.

Ms. Miller also recommended increased use of solar energy. To widespread sounds of disbelief, Ms. Miller insisted that the sun does shine on the state occasionally. That it does so on days when people in Boston turn on their air conditioners means that solar panels generate electricity when the most expensive power is brought on line, she said.

The goal, Ms. Miller said, is to hold down Vermont’s peak power usage below that of neighboring states.

When Ms. Miller finished the questions started. Dr. Ron Holland rose and began his with a correction.

He said he had been mistaken at an earlier meeting when he said the Lowell Mountain project is 12 times more costly than the average renewable energy project. In fact, he said, it is six times as expensive.

If his assessment is correct, Dr. Holland asked, wouldn’t it be better for the co-op to buy renewable energy credits from out of state, rather than buying inefficient wind power.

Mr. Hallquist replied that out of state credits can only be used when a utility invests in the facility that generates the renewable power. He said that VEC is bound to abide by public policy.

Dennis Liddy, of Westfield, asked, “Why don’t you stand up to the politicians?”

“I believe that’s your job,” Mr. Hallquist replied. “We’re not a lobbyist organization.”

Mr. Hallquist said his job and that of the co-op is to provide reliable power at the lowest possible price.

Pat O’Neill, who is also of Westfield, asked about a proposed transmission line extension that is intended to help carry power from the Lowell project. Under its bylaws the co-op must get the approval of members before investing in the line.

Will members have an opportunity to meet and discuss the line before ballots are sent out, Ms. O’Neill asked.

Mr. Hallquist said he was not sure if every area would have a meeting before the vote. He asked Ms. O’Neill if she would like to be on a committee to set up the information process. His offer was accepted.

Don Worth of Island Pond was elected director for district one with 307 votes; Ken Mason of Morgan got 208, and Paul King also of Island Pond had 75. Dan Parsons of Richford was re-elected without a challenge.