Session preview 2016: Carbon tax, renewable siting focus of legislative energy initiatives 

Rep. David Deen, a sponsor of one of two carbon tax proposals, says the tax is revenue-neutral.

Deen’s bill uses proceeds from the carbon tax to offset reductions in other taxes, including sales tax and property tax. Both bills devote some portion of revenues to home weatherization and other conservation measures. VPIRG, an environmental advocacy group, is pushing for the initiative.

A carbon tax is considered regressive because it requires low-income residents to contribute a greater share of personal income than a flat tax in which everyone pays a percentage of their wealth.

To manage this undesirable feature of the tax, most of the money that the carbon tax would generate is returned to taxpayers through a scheme that offers proportionately larger tax rebates and tax credits based on income levels, along with assistance to low-income residents for efficiency measures such as home weatherization.

The carbon tax would initially add 10 cents per gallon to the price of gasoline and would gradually increase over a decade to 88 cents per gallon.

The proposal has been controversial, and the Vermont GOP and Lt. Gov. Phil Scott, a Republican candidate for governor, have accused the sponsors of the bill of “denying the existence of an affordability crisis” in Vermont.

“We know how much less affordable our state would be if the Democrats made everyone pay an additional 88-cents per gallon for gasoline or their heating oil,” Dave Sunderland, chair of the Vermont Republican Party wrote. “We know how this additional tax burden would drive up prices and force even more workers – and more jobs – outside our borders.”
Deen said he’s been disappointed by what he said are unfair characterizations of the bills’ early drafts.

“I think people are sort of manipulating the message for their own reasons,” he said. “I can’t even begin to speculate what their reasons are. If it was in Texas, I could understand, because of the oil patches, but in Vermont we don’t have an oil patch, so I’m not entirely sure why it’s being misrepresented, but it is being misrepresented.”

Renewable energy siting

Much of this year’s energy legislation originates in the Senate, Joint Energy Committee Chair and House Rep. Tony Klein said.

“I think the focus you’re going to see will be on the siting of projects, and attempting to give a greater voice to local entities,” he said.

Klein said he has no opposition to that, but said localities must not be given the final say on whether a project is built, “because if you did that we wouldn’t have any cell service in the state of Vermont, and we probably wouldn’t have any internet connections.

“There are problems that arise that need to be addressed,” he said. “Communities need to feel they have control over their community lots, for one. But you have to balance that.”

“We need to keep going forward with the development of renewables,” Klein said, “but they have to be built in the best place at the best way, and at the best possible price.”

To that end, the Legislature last year created a Solar Siting Task Force under Act 56. This group of trade representatives and regulatory officials will issue a report and draft legislation on Jan. 15.

Sen. Chris Bray, D-Addison, said it’s important to put the siting issue in perspective. He says that utility poles, wires and substations for the state’s electrical grid occupy 58,000 acres in Vermont, while solar power arrays take up about 1,000 acres. (The state has a total of 6 million acres.)

In that context, the emotional reaction to solar siting land use impact, Bray said is “not proportionate.”

But Bray, who has drafted his own “placeholder” bill, says citizens and towns need more of a say in the Public Service Board proceedings, and to that end, he proposes that the board hire a public administrative assistant who can help citizens understand complex utility law well enough to participate in the quasi-judicial process.

Another provision of Bray’s energy bill would put ratepayers on the hook for infrastructure costs related to better renewable project siting.

As it stands today, developers must pay for all necessary infrastructure improvements, which means to save money they often choose sites closest to existing power lines.

Under Bray’s plan, ratepayers would cover the cost of locating renewable sites further from the road. A separate pilot project would offer incentives for “preferred locations,” such as quarries, landfills, rooftops and parking lots. The proposal also calls for municipal “solar parks,” or designated areas for large installations. Projects outside these locations would receive 3 cents per kilowatt hour less.

The legislation would also require the creation of decommissioning funds for renewable projects that have reached the end of their useful life.

“People like to know we’re not leaving a lot of glass and metal out on the landscape,” he said.

Change to eminent domain proceedings

The siting bill also makes a key change to eminent domain proceedings spurred by the Vermont Gas Systems pipeline project in Addison County, Bray said.

Bray’s bill would prohibit utility companies from using eminent domain to acquire easements when those utilities include non-disclosure agreements in their negotiations with landowners.

In the case of the Vermont Gas pipelines, many landowners who took payment for easements across their land signed non-disclosure agreements preventing them from telling their neighbors and others how much they were offered. Many of those landowners mistakenly believed they had no choice but to sign the agreements, Bray said.

Non-disclosure agreements prevent a free exchange of information that could lead to fair market value prices for utility easements, he said.

The secrecy, he says, ensures that only one party in negotiations for an easement actually knows the going price. In those deals, the landowner typically has less money and experience in these matters than the utility, Bray said. The landowner is “compelled to respond” and forced to become party to the negotiations, he said.

“There are a lot of things that make me think citizens face an un-level playing field when it comes to these type of negotiations,” he said. “Making them transparent makes it more level.”

Lawmakers will also consider draft legislation that address several other environmental issues, including:

S.237 would limit forest fragmentation and protect habitat. Seventy-eight percent of Vermont’s landscape is forested and Bray says the state’s trees are its greatest natural resource.
Private landowners would be required to register dams with the Department of Environmental Conservation under H.37. The goal of the legislation is to ensure that dams meet minimum safety requirements. The Nature Conservancy has estimated that 200 Vermont dams offer no flood control or energy benefits, and the organization is pushing for their removal.