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Vermont Electric Co-op directors ask lawmakers to put a hold on new renewable energy mandates

The Vermont Electric Co-op board of directors is calling for a two-year moratorium on new renewable energy mandates from the state.

Seven co-op directors passed a resolution on Thursday demanding that the Vermont Legislature put any new legislation on hold that might require utilities to meet new renewable energy targets.

In a plan published this year, the Department of Public Service set the bar high for renewable electric generation: 90 percent of Vermont’s power is to come from biomass, wind, hydro and solar by 2050.

David Hallquist, CEO of Vermont Electric Co-op, says his board is very concerned that the state has set objectives that may outstrip the utility industry’s ability to respond. The technology for storage of power from so-called intermittent sources of electricity such as wind and solar has yet to be developed. Hallquist says as more intermittent power is fed into the power grid, reliability could become an issue.

The board is also concerned about the cost of renewables for consumers. Rates for solar and wind are higher than those for base sources of power such as natural gas, nuclear and coal.

Right now there are no statutory requirements set for renewable thresholds. Hallquist says, however, that a renewable portfolio standard bill floated in 2012 could resurface this biennium.

“There’s good reason to see pressure there,” Hallquist said. “We would all like to see more green energy … it’s motherhood and apple pie. We should take the time to have a good dialog to talk about how we’re going to get to the goals.”

Rep. Tony Klein, chair of the House Natural Resources and Energy Committee, declined to comment.

The co-op has double the penetration of renewables as a percentage of its power portfolio in the state compared with other utilities, Hallquist says. Twenty percent of the electricity it delivers to customers comes from wind and other sources. With Hydro Quebec power, that percentage goes up to 45 percent. (Vermont is the only state in the region that has deemed the flooding of vast areas of the northern Quebec region as a renewable resource, Hallquist said.)

“We’re at 20 percent when you start to getting over 20 percent you see grid instability,” Hallquist said. “The goal of 80 percent to 90 percent is not physically possible with this technology. We need to look how we get there, and we really want to address the technological limitations in our way.”

Hallquist and the board say the state needs to form a panel of experts who can review the options for addressing grid reliability issues in a future where more renewables are built into the power mix.

Manufacturers and other commercial power users, for example, would need to develop power storage and generation capacity to circumvent equipment damage and failures from inconsistent intermittent sources of power.

Hallquist said any increase over 20 percent can impact reliability.

The Vermont Electric Co-op has tried to strike a balance between aggressively pursuing renewable power from Green Mountain Power’s Kingdom Community Wind and First Wind in Sheffield and offering competitive rates. VEC rates are about 17 cents a kilowatt hour; the state average is 16 cents, Hallquist said.

Chris Recchia, interim commissioner of the Department of Public Service, commended VEC for expanding renewables while keeping rates down, but he doesn’t think a moratorium is necessary. The state reviews the impact of rate increases from renewables on a case by case basis.

“We have been watching rates carefully all along,” Recchia said.

ISO New England, the regional distributor of power, can handle 24 percent intermittent power, according to Recchia. The state has a long way to go before it hits that threshold, he said.

“We are paying attention to the things the VEC board is concerned about,” Recchia said. “Financial impacts are a perfectly valid concern.”

The board resolution comes 18 months after members of the co-op gave overwhelming approval to a transmission line project that delivers power from Kingdom Community Wind in Lowell to Jay Peak Resort. The board supported the project unanimously, Hallquist said.

Since then, however, the board has been meeting with community members who oppose wind towers.

“We observed the wind issue splitting our community,” Hallquist said. “We asked ourselves, why are we doing this when it represents only 4 percent of our carbon footprint?”

Hallquist said the state is better off focusing its efforts on transportation and home heating efficiencies, which together make up 79 percent of Vermont’s energy use.

“I don’t like it that we’re splitting our communities fighting over crumbs of carbon use,” Hallquist said.

VEC serves 32,000 households in Northern Vermont.

The Vermont Electric Co-op board of directors’ resolution follows.



WHEREAS, it is unclear at this time whether the electric grid will be able to accommodate renewable generation projects in excess of 20% of the supply needs in Vermont without adverse effects, including voltage instability (which can cause significant damage to industrial equipment) and potential curtailments of lower cost base-load generation (as has been experienced in the Pacific Northwest and Texas);

WHEREAS, currently, VEC is approaching having 20% of its power portfolio being supplied by renewable resources, including First Wind’s Sheffield project, Kingdom Community Wind, and net metered and SPEED projects;

WHEREAS, no cost-effective storage solutions presently exist to enable larger penetrations of intermittent renewables, such as solar or wind projects;

WHEREAS, industrial-scale wind development has created an unhealthy division in communities that surround such projects, particularly since the current carbon footprint of electricity represents only 4% of the total Vermont carbon footprint; and

WHEREAS, a moratorium on wind projects, if not coupled with a moratorium on other renewable mandates, will limit renewable options for distribution utilities primarily to solar projects, which will certainly be more expensive, thus raising power costs for all members. For example, based on current technology and costs, if VEC were to meet the renewable goals set in the 2011 Vermont Comprehensive Energy Plan without industrial-scale wind, VEC projects that its members could see an increase in electric rates of approximately 90%.


The VEC Board of Directors recommends that the Vermont Legislature impose a moratorium for a period of two years effective on January 1, 2013, on further renewable power supply mandates or sooner if the grid instability, human health impacts, and cost issues have been addressed and a transition plan is in place that considers the cost and reliability impacts of moving to higher levels of renewable resources. VEC further recommends that a statewide panel be formed, representing all stakeholders – including utility customers – to create such a transition plan.