Green Mountain Power in recent years has installed wind turbines atop Vermont’s ridgelines and solar arrays in its fields. All fueling the delivery of clean, green, renewable power to conscientious Vermonters’ homes, right?
Turns out, that’s a matter of debate.
“If you were to ask Vermonters, ‘do they think that by buying GMP power from wind projects, they’re reducing their carbon footprint’ I’d venture to say a strong a majority of Vermonters would say, ‘of course that’s what we’re doing’,” says Vermont Law School professor Pat Parenteau. “The truth is, they’re not.”
Parenteau is one of the lead lawyers for a group of four Vermonters who are asking federal regulators to force GMP to stop marketing its power as “renewable.”
Parenteau and the petitioners don’t deny that GMP has constructed significant renewable energy projects. But they say the utility is selling so-called “credits” for that green power to high-paying customers out of state – mainly utilities in Massachusetts and Connecticut.
The stuff Vermonters are paying for? Parenteau says it’s the dirty “brown” energy produced by coal, gas and nuclear plants elsewhere on the New England grid.
“The practical impact is this: we’re sacrificing Vermont ridgelines in order for Connecticut utilities to meet their renewable requirements in Connecticut,” Parenteau says. “That’s what we’re doing.”
Parenteau’s suit is only the latest legal salvo in a long-simmering fight over GMP’s sale of Renewable Energy Credits. The state of Connecticut passed a law earlier this year that bans its utilities from buying RECs to fulfill its green energy standard, if the entity that sells those RECs continues to count that energy toward its own renewable goals.
And one of the region’s leading buyers and sellers of RECs, a firm called Next Era Energy, announced in May that it will no longer trade renewable energy credits from Vermont.
Dorothy Schnure, corporate spokeswoman for GMP, says the utility has been upfront with its customers all along.
“The electrons and the power stays in Vermont. The environmental attributes go elsewhere, and they’re claimed by the organizations we sell them to,” Schnure says.
So that electricity produced by turbines on top of Lowell Mountain? Schnure says it’s fed directly into Vermont. But the environmental do-gooding that comes from using the renewable energy? That belongs to the high-paying out-of-state customers buying GMP’s credits.
Chris Recchia, commissioner of the Department of Public Service, says it’s an arrangement that has allowed Vermont to build renewable projects without squeezing ratepayers’ pocketbooks. Green Mountain Power has sold about $22 million worth of credits since lawmakers approved this accounting arrangement in 2005.
“If we were to go the way Vermont Law School and the petitioners are suggesting, it would an average of a six percent increase across the state,” Recchia says.
Kevin Jones, a Vermont Law School professor who signed on to the petition, says GMP is well within its legal rights to sell the RECs. But he says all it means is that other utilities can just produce more dirty power somewhere else. And he says GMP’s presentations to its Vermont customers obscure this unpleasant reality.
“GMP has gone to great lengths to create the perception that they are green, when in reality the policy of selling the RECs has significantly increased their customers’ greenhouse gas emissions,” Jones says.
The petition cites excerpts from op-eds, regulatory testimony and other venues in which GMP officials, according to the petitioners, have intimated that the environmental benefit associated with their solar and wind projects accrue to Vermont ratepayers.
Schnure, however, says the GMP has underscored explicitly, in corporate materials and live presentations, that while the electricity produced by the projects flow into Vermont homes, the environmental benefits do not.
On its website, GMP features a pie chart showing its “fuel mix.” It shows that, aside from hydro, the utility gets only 0.3 percent of its power from renewable sources, a figure made far lower than it would be were GMP to “retire” its credits, instead of selling them.
The situation might be unique to Vermont, where, unlike the majority of states, utilities are not required to procure a minimum amount of power from renewable sources.
If GMP had to abide by a “Renewable Portfolio Standard,” as such mandates are generally called, then it would have to either hold on to its credits, or build more renewable generation.
Parenteau and Jones say insulating ratepayers from the true cost of their power harms the green power movement on two fronts. First, according to Parenteau, it thwarts the behavioral changes that would otherwise help solve the climate crisis.
“It is going to mean some increased costs for Vermonters to buy electricity,” Parenteau says. “The option then of course is, the more expensive it is, the more energy efficiency looks better and better all the time.”
Jones says Vermont’s policy also has the effect of halting the proliferation of green energy projects outside Vermont. Out-of-state utilities that might have otherwise had to produce their own wind, solar or biomass, Jones says, can buy their way out of such projects by cutting a check to GMP.
“Vermont’s renewable energy laws over the last decade have been fundamentally flawed,” Jones says. “And rather than reducing Vermont’s carbon footprint, they have led to increasing Vermont’s carbon footprint.”
East Montpelier Rep. Tony Klein, the democratic chairman of the House Committee on Energy and Natural Resources, say the petitioners misunderstand the purpose of the law that got GMP and other Vermont utilities into the renewable energy credit market.
With a Republican governor in power at the time the law passed, Klein said getting a Renewable Portfolio Standard was a political impossibility. So lawmakers looked to the art of the possible, Klein says, and came up with what’s known as the SPEED program – short for “Sustainably Priced Energy Enterprise Development.”
By allowing for the sale of RECs, Klein says the Legislature could encourage the growth of renewables in a way that would neutralize the rate impacts, and therefore blunt opposition by powers that would have otherwise squelched the initiative.
“We knew from the beginning that there would be some pushback. We knew that. But we said, ‘what do we got to lose?’” Klein says.
The law that allows for the sale of RECs expires in 2017, after which point the environmental benefits will accrue to Vermont. And Klein says that while the accounting scheme might not have been a “pure” one, it allowed for the creation projects that will operate long after the unsavory sale of the RECs sunsets.
“The reality of the program is, we’ve gotten a hell of a lot of projects built,” Klein says.
The petition filed with the Federal Trade Commission asks the body to conduct a full investigation into GMP’s marketing practices.
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