In 2005 the Vermont Legislature passed renewable energy legislation establishing the SPEED program. SPEED was repealed in 2015 with legislation initially called RESET. That name has been dropped because leaders thought it implied SPEED had been a mistake that required correcting.
SPEED was a mistake, and Vermont will be living with its legacy for at least 20 years.
While other states established renewable energy programs that decreased their carbon footprints, SPEED increased Vermont’s – by about 236,000 metric tons of carbon dioxide per year. A similar annual burden will continue until SPEED projects like the Lowell, Sheffield and Georgia wind projects are decommissioned.
Since such a profound mistake was made and nobody has apologized to Vermonters, it seems prudent to perform an autopsy to see how Vermonters were tricked into believing that a renewable energy program would decrease their carbon footprint.
There are two basic concepts of electrical engineering – that our governor, legislators, secretaries, Public Service Board and Public Service Department seemingly did not understand – that set SPEED up to fail from its inception.
How do you count renewable energy? It is not counted by measuring the output of your wind and solar projects. Renewable energy is measured by counting the renewable energy certificates that an entity owns. Due to the complexity of the electrical grid it is difficult to associate electrical power with its precise source and its associated emissions. To simplify this complexity utilities agreed to separate electricity from its emissions.
A renewable energy project generates both electricity and renewable energy certificates. A business generating renewable energy can sell both. A REC is valued at $55 to $60 per megawatt-hour. A typical wholesale price for nonrenewable energy in New England is $32 per megawatt-hour. According to Federal Trade Commission guidelines, only the owner of RECs can claim its energy as renewable, no matter how the energy was generated. If both the seller and buyer of a REC make a renewable energy claim, it’s called double counting and is at least unethical, and arguably criminal.
How do you attribute carbon emissions? If an entity holds a REC for each megawatt-hour sold, the entity has zero emissions. For those megawatt-hours sold without a REC, the entity assumes responsibility for a proportionate share of total emissions for the regional grid. A renewable generator that sells its RECs effectively assumes the emissions of the buyer.
With a command of these two concepts anyone could have predicted in 2005 that SPEED would increase Vermont’s carbon footprint as all the RECs generated by SPEED projects are sold to out-of-state utilities to satisfy their state’s renewable energy requirements. With the sale of the RECs Vermont forfeits the right to call the energy renewable and all SPEED-generated energy assumes the average regional emission rate, increasing Vermont’s carbon footprint.
Consider the following exchange between Public Service Board Chairman James Volz and a witness for Green Mountain Power regarding the word “renewable” in testimony before the PSB on Feb. 4, 2011, page 187. The initial topic of the testimony is a report that the PSB is required to write in 2017 on the achievements of the SPEED program.
GMP: “The rub will come when Vermont assesses how we do on achieving SPEED goals. And a report or similar document is issued that describes what renewable sources does Vermont have. That would be a moment at which this concern (double counting) might arise.”
Volz: “So if we didn’t ever do that report, and just make that assessment, then we could avoid that problem, perhaps. That may be a legal question, I don’t know.”
GMP: “I had not thought about it that way, sir.”
Volz: “We could encourage all the renewables we want, put in place programs to encourage renewables, allow the RECs to be sold, but as long as we don’t make a claim somewhere publicly that we have a certain amount of renewables then, or that we have met a specific goal, then we might be able to avoid the problem.”
GMP: “I think that’s fair, and you understand the dynamic. … But I think you have it right.”
Volz: “OK. Thank you.”
Now consider how Green Mountain Power and the Vermont Electric Cooperative “sold” the Lowell wind project to Vermonters.
“Kingdom Community Wind means clean renewable energy built in Vermont for Vermonters.”
“We have always believed that this wind resource would provide a clean, cost-effective energy resource for Vermonters, and this upgrade is helping us achieve that goal.”
“This project is an important part of Green Mountain Power’s strategy to provide its customers with long-term, stably priced renewable energy.”
In none of these conversations does the Public Service Board, Green Mountain Power or Vermont Electric Cooperative demonstrate an understanding of the FTC standard for the use of “renewable energy.” Vermont’s new renewable energy legislation also does not define renewable energy consistent with FTC guidelines. None of the parties demonstrates an ability to clearly communicate to Vermont’s citizens.
Vermont utilities currently receive about $50 million annually from the sale of RECs. This represents about 6 percent of the cost of electricity. At the same time that SPEED projects were being constructed, Hydro-Quebec had excess hydropower equivalent to 10 times the output of GMP’s Lowell project until 2023 that is currently being sold for 3.5 cents per kilowatt-hour with no addition to the buyer’s carbon footprint. As a citizen I wonder who made the decision not to buy this cost-effective renewable energy. Vermont Electric Cooperative buys GMP wind power for 12 cents per kilowatt-hour and sells the associated REC for about 5.5 cents per kilowatt-hour, increasing our collective carbon footprint.
As Vermont’s new renewable energy program is trotted out again with the David Blittersdorf-proposed 5-megawatt wind project in Irasburg, be watchful for the deceptive use of language. According to 9 V.S.A.§ 2453, “deceptive acts … in commerce … are unlawful.” While no longer allowing double counting, current policy still allows RECs to be sold out of state, increasing our carbon footprint.
Robert R. Holland is a resident of Irasburg.
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