John Klar: Weaving nets for the poor through net metering

By John Klar

Vermont is guinea pig for progressive experimentation on wealth redistribution masked as “climate action.” Of course we all want a clean ecosystem: but if people suffer economically, the environment takes a back seat — witness the Amazon, China, Burma or the Congo. Vermont is one of the most economically anemic states in America, and the national stock market decline is exacerbating that vulnerability. The “best-laid plans” of the “climate warriors” are crashing on the reality of those economic rocks.

John Klar

Vermont has “progressively” implemented ambitious subsidization of “net-metering” programs whereby 1) taxpayer funds are allocated via capital tax credits to “incentivize” the acquisition of residential solar panel systems; 2) an additional subsidy is procured through guaranteed rates of payment to those panel owners for excess generated electricity that is sold back to the utility companies. These incentivizing “subsidies” are withdrawn from taxpayer pockets, and from the electric rates paid by “non-participating” electric utility customers.

A March 4 hearing exposed the gross disparity and market perversion of this regulatory scheme. A local utility (Washington Electric cooperative, Inc., or WEC) requested regulatory approval from Vermont’s Department of Public Utilities of a 5.95% rate increase on electric rates effective January 1, 2020, of which 28% (or 1.67% out of the 5.95% increase) was directly attributable to “Net Metering Revenue Erosion.” This $258,792 increase resulted from the fact that WEC pays 9-10 cents per kilowatt hour on the grid for power, but then is required by the DPUC to pay 19 cents per hour to “net-metering” customers who sell back power exceeding their own consumption.  This is a direct transfer of funds from “non-participating” (those who have not installed solar panels) WEC customers to those who have benefitted from public capital subsidies to install them.

The Vermont statutes which compelled this arrangement specifically prohibit this exact conduct:

30 V.S.A. § 8010 – (c) …the Commission shall adopt and implement rules that govern the installation and operation of net metering systems.
(1) The rules shall establish and maintain a net metering program that:  … (C)  to the extent feasible, ensures that net metering does not shift costs included in each retail electricity provider’s revenue requirement between net metering customers and other customers.

This wealth transfer impacts poor and elderly ratepayers, who are forced to subsidize those with the resources to install expensive — and profitable — solar arrays. Further, the solar panels are manufactured using fossil fuels and mining operations (mostly in China), are shipped or flown long distances at environmental cost, and will one day become obsolete toxic waste at further environmental cost. Poor ratepayers are undermined in their ability to install comparable systems because their wealth is depleted by inflated fee structures that Vermont’s statutes forbid.

 The scam has multiple dimensions:

— electric vehicles (EV’s) are subsidized by tax dollars for people wealthy enough to afford them, who then are exempt from paying for road improvements because those costs are largely extracted from a gasoline tax. 

— The Transportation Climate Initiative (TCI), Global Warming Solutions Act (GWSA), and Regional Greenhouse Gas Initiative (RGGI) are all efforts to transfer funds from those who drive cars (especially rural residents) to projects like pellet stoves, bike paths and rail lines for urban dwellers.

— ratepayers do not have a legal right to intervene in DPUC hearings affecting what they pay for power; private, out-of-state “nonprofit” groups and their attorneys do (this is also a key feature of the more sweeping GWSA).

This patently regressive wealth reallocation masquerades as environmental salvation.  Vermont’s original “Essex Plan” was more forthright about the regressive aspects of these policies, identifying itself as

A Vermont-specific, future-oriented economic development strategy to strengthen the economy, prioritize the most vulnerable, and harness the power of the market to reduce carbon pollution…. The plan proposes a partnership between state government and Vermont’s electric utilities whereby all of the proceeds of a gradually rising fee on carbon pollution are returned to Vermonters and Vermont businesses on a monthly basis in the form of lower effective electric rates and per-person rebates… Economic analyses of similar carbon pricing proposals … indicate that the ESSEX Plan would create up to 6,000 new jobs, “make whole” Vermonters on the lowest rungs of the economic ladder, and reduce carbon pollution by 15%-25% by 2025 and 30%-50% by 2050.

 This is all fantastical: electric rates are instead being increased; the GWSA has eliminated “rebates,” as including them highlighted administrative impossibility and inequity; those 6,000 “new jobs” are admittedly “one-time benefits” or “transfer payments” between taxpayers that do not pay for themselves; and those “targets” of reduced carbon pollution externalize the environmental costs of manufacturing panels and EVs using plastics, aluminum, fossil fuels, etc. — Vermont will “achieve its goals” in 2050 only by ignoring these initial state-mandated bursts of pollution.

The TCI’s “core funder” is the Rockefeller Brothers Fund, whose track record in fossil fuels speaks for itself.  The TCI plans to use zoning laws and building codes to require EV parking spaces, charging stations and maintenance, and even signage.  But there are no plans imposed to pay for road maintenance, dispose of EV batteries, or subsidize the poor who are disadvantaged.

The plan is to compel people to move from rural to urban centers:

Wishing to avoid the housing cost premium associated with neighborhoods closer to the urban core, many working class families move farther from their places of employment into outer fringe suburbs…. Interestingly, because of the nature of the housing/transportation relationship, this decision often fails to reduce combined expenditures in these categories, but it does extend commute times and distances (Lipman, 2006); thereby increasing VMT [vehicle miles driven] and transportation sector emissions.

These special-interest, government-imposed schemes transfer wealth and gentrify Vermont while hurting economic growth. This truth is buried in the TCI plans:

In many jurisdictions, there is growing recognition that the combined costs of housing and transportation can be burdensome to many families, reduce economic growth potential and [sic] creates other societal costs…. The nature and magnitude of the economic effects of transportation improvements will vary according to the type of project undertaken, the area in which it occurs, the types of industries impacted, and myriad other factors.

What the “climate warriors” keep hidden is the “magnitude of the economic effects.”  They seek to penalize country life to “save the planet,” exert financial pressure to make living in the country more costly, and restrict development to urban areas — all without a single word about helping the small farms and farm families who have been systematically compromised for generations.  Instead, the “Essex Plan” loftily proclaims that “Transitioning off fossil fuels is an economic development and affordability strategy.” 

Mass-produced industrial food, trucked thousands of miles from California, will NOT always be readily and cheaply available in Northeastern America. This dependency is unsustainable, and absorbs massive amounts of fossil-fuel-derived energy and concomitant pollution that is excluded from all of these analyses — let alone from Vermont’s future “energy consumption targets.” 

 The city mice have decided to conquer the land of the country mice, forgetting who feeds whom, imposing a short-term “sustainability” that chooses market winners, increases dependence on industrial food and distribution systems, and makes the poor poorer. Regular Vermonters who embrace their rural way of life can see the net that has been cast, and will cut themselves free.

John Klar is an attorney and farmer residing in Brookfield, and former pastor of the First Congregational Church of Westfield. He is running for governor in 2020.

Image courtesy of Wikimedia Commons/David Monniaux

5 thoughts on “John Klar: Weaving nets for the poor through net metering

  1. Cost Shifting the Name of the Game

    “GMP estimated the 263,515 MWh of net-metered generation (includes small hydro, small wind, solar, etc.) in its customer area will lead to $33 million in cost shifting, from solar system owners to non-owner ratepayers, in 2020, equivalent to 5% of its total annual cost of serving customers.”

    The larger systems, under Special Offer, etc., likely would have $30 million in cost shifting, including due to subsidies and high feed-in tariffs, about 11 c/kWh (recent systems), up to 30 c/kWh (older systems), paid to the millionaire owners in 2020.

    The NE wholesale prices have averaged about 5 c/kWh starting in 2009, i.e., 11 years.

    Future 100% In-State Generation?

    2000 – 2018
    Adding 12.7% of new in-state renewable electricity cost about $2.0 – $2.5 billion.
    Average electricity addition rate was about 12.7%/18y = 0.71%/y.
    Cost was about $2.25 billion/12.7% = $177 million/% of new in-state.
    This was relatively easy, because it mostly was “low-hanging fruit”, with little energy storage

    2018 -2050
    Increasing from 27.8% in-state in 2018 to 100% in-state by 2050, would be a Herculean feat to accomplish in 32 years
    Average electricity addition rate would be about 72.2%/32y = 2.26%/y.
    Cost about $550 million/y, until about 2030, because of expensive, large-scale, energy storage; more per year after 2030.
    Major acceleration of everything and many $billions of spending would be required.

    Capital Cost for 100% In-State Generation

    Generating (6.0, fed to VT grid – 1.667, existing in-state) = 4.333 billion kWh/y of new in-state RE electricity, mostly wind and solar, would require capital costs for:

    1. Wind/solar generation capacity on pristine ridge lines and open lands; large-scale electricity storage; and large-scale grid extension/augmentation. Losses associated with storage would require additional wind/solar generation to offset them.

    2. Additional wind/solar generation capacity on pristine ridge lines and open lands; large-scale electricity storage; and large-scale grid extension/augmentation would be required to power:

    – At least 300,000 EVs for 265,000 households; about 300,000 x 12000 miles x 0.350 kWh/mile = 1.26 billion kWh/y
    – At least 400,000 ASHPs for about 175,000 households; 2 to 3 ASHPs per household for 100% heat; about 175,000 x 8607 kWh/y = 1.51 billion kWh/y

    – About 85,000 households would use cordwood/wood pellets or biofuels, or electric resistance heating.
    – ASHPs usually do not provide heat for DHW, i.e., separate systems would be required.

    3. Major upgrading (“deep retrofits”) of the energy efficiency of at least 88% of all buildings in Vermont.

    All that would cost tens of billions of dollars and have enormous environmental consequences in Vermont.

  2. John, as always, the devil is in the details. At first glance, one might get the impresion that this net metering scam seems reasonable. Then as one delves into the details he or she realizes that this whole program benefits a few at the expense of hard working people struggling to make ends meet. The legislators could care less about the common folk as long as their pet feel good projects are funded.

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