December 15, 2012

Draft PSB report criticizes renewable credit

Original title: PSB report criticizes renewable credit sales | John Dillon | Vermont Public Radio | 12/14/12 |

Vermont utility regulators are questioning the environmental benefits of a state law that promotes renewable energy development.

In a draft report prepared by its staff, the Public Service Board says it wants the Legislature to make changes to strengthen the clean energy program.

Under a law passed in 2005, Vermont utilities and renewable energy developers can sell what are called renewable energy credits, or RECs.

This means that Vermont companies that have clean sources of power – including solar or wind – can sell the environmental benefits of those projects to companies that still pollute.

The net effect, according to critics, is that Vermont utility customers in reality buy dirty power despite all the renewable projects going up in the state.

“Since we’re selling these RECs out of state, the energy bought by Vermonters is actually the residual New England emissions which are coal, oil, gas and other fossil fuel generation,” says Kevin Jones, associate director of the Institute for Energy and the Environment at Vermont Law School.

Jones is quite critical of the state’s current efforts to promote renewable energy development, called the SPEED and standard offer programs. But he says these views are his own and not the institute’s.

“The real joke about this program is that the more that we invest in SPEED and standard offer programs at these significant costs to Vermont ratepayers, the larger our greenhouse gas emissions are. And that just is bad public policy,” he says.

In a draft report, the Public Service Board makes a similar point, if in more subdued language.

The report recommends that the renewable energy credits be retired – and not re-sold to polluting power companies. The draft says that because RECs are sold in the regional market, utilities in other states can use them to offset their own emissions. The report says that means: “no incremental protection or promotion of air and water quality in the state or region through the displacement of polluting fuels.”

The PSB could issue the final report as written or make changes. But the draft suggests that the Legislature adopt a renewable portfolio standard, or RPS. That’s a state mandate that utilities get a certain percentage of their power mix from renewable sources.

Green Mountain Power sells renewable credits from its recently completed Lowell wind project. GMP vice president Robert Dostis says the sales lower the cost to Vermont customers.

“So it’s having the desired effect of increasing the amount of renewables in Vermont but doing it in the most cost effective way,” he says.

Dostis says projects like Lowell help reduce greenhouse gas emissions on a regional basis. But Dr. Ron Holland, a physician who has protested the Lowell project, says the wind turbines don’t cut pollution because the utility has already sold those environmental benefits.

“The fundamental problem here is putting CO2 emissions into the atmosphere and if we’re going to effectively address that we have to reduce them,” he says. “And so to put something up, but yet allow the emissions to continue someplace else is an illusion.”

Despite the Public Service Board’s critical report, lawmakers are not keen to change the renewable program. East Montpelier Democrat Tony Klein, who chairs the House Natural Resources and Energy Committee, says the Legislature had a similar debate last year and he doesn’t want to revisit the issue.

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