Opinion: Renewable power carbon tax looms in guvs’ decarbonization request

By Guy Page

Yesterday, five of six New England governors — including Gov. Phil Scott — called for a “decarbonized grid” for New England electricity transmission. Ratepayers will soon know if they want a regional carbon tax, as suggested in March by the president of New England’s power transmission grid operator.

Gov. Scott and the governors of Maine, Massachusetts, Rhode Island and Connecticut — but not New Hampshire — demand that ISO-New England, the regional power grid operator, help them create “a decarbonized grid,” according to a joint statement released yesterday.

The five governors say the grid must be “capable of supporting the accelerated adoption of more sustainable electric, heating, and transportation solutions.” They offer no specific solutions. They decry the current  “market design that is misaligned with our States’ clean energy mandates and thereby fails to recognize the full value of our States’ ratepayer-funded investments in clean energy resources.”

Guy Page

Translated into layman’s language, the governors don’t like that ISO only buys the lowest-cost power available. Carbon-cutting renewable power rarely fits that description. Power plants burning energy-dense natural gas can sell wholesale power for 2-3 cents/kilowatt-hour. By contrast, power from proposed New England offshore wind projects would sell at an estimated wholesale cost of about 20 cents/kilowatt-hour. ISO’s lowest-cost purchasing policy may be welcome to ratepayers but it’s troublesome to states with laws requiring steep carbon reduction.

The same state legislatures that passed the reduction mandates lack the will to enforce them. In their own states, they won’t ban cheap fossil-fuel power, mandate renewable power, or levy a carbon tax on life-essential electricity. Instead the states want ISO-New England to solve their carbon-reduction problems for them, by taxing carbon.

To which ISO-New England CEO Gordon van Welie in effect told the New England states March 6 (see pages 14-16), ‘no problem. But we need your consensus.’ Speaking at a media briefing, van Welie said carbon pricing is “the simplest, easiest and most efficient way” to create wholesale price parity between cheap fossil fuel electricity and “clean energy” power.

He conceded carbon pricing would increase ratepayer spending — in his words, “raise energy market revenues” — but would “favor the operation of resources that reduce carbon emissions, and drive the clean energy transition desired by the states.”

Most carbon pricing schemes charge extra to carbon polluters (in this case oil, gas, and coal-powered electricity generators) and bestow the revenue (after administrative expenses) on energy efficiency and low-carbon power generation providers. Carbon pricing artificially balances the cost of wholesale power. Robbing Polluting Peter to pay Pricey Paul creates at least the appearance of a level playing field.

Van Welie added that it would be easy to implement, and “effective in helping states meet their renewable energy goals.” There was just one problem, the ISO CEO said March 6: “to date, there has not been a regional consensus on this approach.”

In other words, van Welie told the state’s governors: ye have not, because ye ask not.

Yesterday, the governors asked for decarbonization. When the “vision statement” promised by the governors materializes, ratepayers in the five states should know for sure if the governors are asking for the carbon pricing suggested by van Welie. It could also seek more intermittent-power friendly transmission infrastructure. Both wind and solar power generate power at the whim of nature, not on demand as do fossil-fuel generators. Think sailboats vs. motorboats.

Three other questions remain unanswered:

1, Will low-carbon hydro and nuclear power benefit from a regional carbon-pricing scheme? Both Vermont Yankee and Pilgrim nuclear power plants closed largely due to their inability to compete in the wholesale power market with natural gas generators. Renewable power advocates typically ignore or downplay the carbon-reduction value of nuclear and hydro. However, a June 2018 statement by Scott and every New England governor except Maine’s suggested nuclear power price supports.

2. Without buy-in from New Hampshire, will ISO regard a request by five out of six governors as “a regional consensus”? Gov. Chris Sununu signed the June 2018 statement but yesterday’s. Like every other New England state, New Hampshire has set carbon emissions reduction goals of 80% by 2050, using 1990 levels as a baseline. However, Sununu has vetoed instate carbon taxation bills.

3. What would a regional carbon tax mean to Vermont ratepayers? That depends on the amount of the tax, and the ratio of the wholesale energy purchases to other elements of the ratepayer bill (other regional charges, state taxes, energy efficiency surcharges, powerline maintenance, etc.). Most carbon tax schemes start relatively small in the first year or two, to avoid “sticker shock” and to determine effectiveness in reducing carbon. If emissions remain high, it’s seen as a reason to increase the ‘pollution tax.’

Read more of Guy Page’s reports. Vermont Daily is sponsored by True North Media.

Image courtesy of Wikimedia Commons/Paul Anderson

16 thoughts on “Opinion: Renewable power carbon tax looms in guvs’ decarbonization request

  1. A carbon tax merely would replace LOW-COST electricity with HIGH-COST electricity.

    NE already has the highest electric rates in the US, which severely limit economic growth RELATIVE to other US areas.

    In Vermont, burdened by a HUGELY INEFFICIENT government, REAL economic growth has averaged about 1%/y, much less than the rest of the US.

    A carbon tax would make all that worse.

  2. H Q? It is because the control freaks in the puzzle palace do not control HQ, and they do not have the money in the place to call the shots that effect you and me. It is not about electricity, or costs, or carbon, or anything else only their ability or inability to control the property and it’s product, and the money involved.
    I am surprised more people have not caught on to this big farce that is being perpetrated onto Vermonters. These freaks have to be voted out, the lobbyists fired, and get back to the business of common sense and wise judgement which started heading down hill the day Phil Hoff was sworn in as Gov in 1963. It is not complicated, it is only being projected as such and a revolution in terms of representation will be needed to put a screeching halt to the non-sense. Snipping and messing around the edges is not going to do it….. wholesale change will.

    • Phil Hoff, You are SO RIGHT! We have never recovered, may never recover.

      Old enough to remember. Will Biden be next?

    • this is never going to happen. I got a long missive from our representative Zachariah Ralph here in Hartland some time ago about the role of our representatives in the Vermont Statehouse. He made it crystal clear that their obligation is 1. to the Party, 2. to the Committee and 3. to the Constituent. Therefore, there is zero reason they listen to the voters and are so arrogant as to say, “Hey, I got voted in, so I am doing the will of the voters” and unless you stay active with every piece of legislation going on, you do not hear from them on how they are voting. Sadly, Vermonters are one hell of a lazy and apathetic bunch of voters and if there are any (yes, I know there are some) who would defy this kind of crap, they don’t vote.

  3. Maybe Vermont Yankee couldn’t compete price wise with co-gen power providers but they didn’t compete for market share. Vermont Yankee produced until the day it was shutdown, one million dollars a day in profit, thirty million a month. Once a year it went through a thirty day shutdown for maintenance. It provided power to one third of the Vermont population, at a very reasonable rate. I know that once Vermont Yankee was gone my electric bill simultaneously went up and hasn’t stopped. Vermont Yankee was closed under false charges using fear mongering. The RE industry, enlisted politicians, science experts, and the media to scare people with stories about china syndrome, Chernobyl, and nuclear winters. Finally, someone came up with the idea to use tritium, an isotope of hydrogen, to scare the population into believing it was leaking out of the power plant. It was proven there were no leaks in any of the hot cooling systems. Besides tritium is found in the soil and water throughout the US. It was a byproduct of nuclear testing in the deserts. Airborne tritium was carried by prevailing winds eastward. So, fake science, fear mongering, indoctrinated politicians and the news media were used by the RE industry to close Vermont Yankee, in order to make room for GWSA and the expansion of the RE industry. GWSA was signed into law in California in 2006, the first state to enact it. Vermont Yankee was officially decommissioned in December 2014. The RE industry has methodically closed nuclear plants all around the country and introduced windmills and solar fields in their place. Every state has its tales of their shortcomings. Power shortages, overloaded grids, and high costs of power to the consumer.
    So, that is what was really behind the closing of Vermont Yankee.

    • SR,
      Vermont Yankee would RELIABLY run, at near FULL PRODUCTION (90+% capacity factor, one of the highest in the US and in the World), for about FIVE HUNDRED DAYS.

      Then it would shut down for about 4 to 5 weeks for refueling, and make all sorts of improvements, with as many as 1000 outside contract workers on the site, plus its own staff, 24/7.

      All would be highly choreographed, planned to the last detail, with simulations, during the 500 days of running time.

      Then VY would restart and RELIABLY produce for ANOTHER 500 days, all at NEAR-ZERO CO2.

      Dem/Prog Shumlin and Co hounded VY out of business, by REFUSING to sign a LONG-TERM contract at 6 c/kWh, because Vermont RE folks were against VY, and wanted to replace VY LOW-COST electricity with heavily subsidized, weather-dependent, variable wind and solar, HIGH-COST electricity, both of which cannot EXIST on the grid, without the OTHER generators varying their outputs to counteract the variations of wind and solar, 24/7/365, including dealing with GRID-DISTURBING, midday, solar DUCK-curves.

      Close down these OTHER generators, as was done in California, and ALL HELL breaks loose, such as frequent rolling brown-outs/rolling black-outs (a la Third World), which likely would occur during stressful conditions, such as heat waves and wind/solar lulls, when their combined output is less than 15% of normal for that time of year, for up to 5 TO 7 DAYS.

      Some folks say we will have energy storage.

      Custom-engineered, large-scale battery systems cost about $500/kWh delivered as AC to the high voltage grid.
      Any electricity passing through such battery systems has a loss of about 15 to 20 percent, on a high voltage AC in, to high voltage AC out basis.

      Electricity fed into the NE grid is about 120 BILLION kWh/y, or an average of 0.33 BILLION kWh per DAY.
      The peak feed-in is about 0.5 BILLION kWh/d, such as on hot days.

      If wind and solar had been 50% on an ANNUAL basis, or 60 BILLION kWh/y, as RE folks think we should have, and a multi-day lull would occur during winter (minimal solar for that time of year), leaving us with less than 15% of whatever would have been produced, during that time of year, would batteries make up the missing wind and solar?

      If so, their capacity would be at least 1 to 2 BILLION kWh to cover shortages and battery losses during the lull.
      Multiply times $500/kWh, and we are talking some real money, i.e., $500 billion to one $trillion.

      What if a SECOND lull were to occur a few days later?
      It would take strong winds, plus some winter solar, to recharge the batteries to be ready for that second lull.
      What else would charge these batteries, if not SURPLUS wind and solar, which would have to happen between the lulls?

      All this is nothing short of a nightmare, and yet a VERY REAL scenario, if RE folks have their way.

  4. Why the costly “Renewable power” urgency? Estimates have said we have a six hundred year supply of natural gas. Given that may be inaccurate, let’s say two hundred. Two hundred years ago we were cooking with wood or coal, going to bed when it got dark, traveling by horse, crossing seas on sailing ships and hunting with muzzleloaders. Is it realistic to assume we won’t have cleaner, more efficient means of producing power that will displace gas for economic reasons within two hundred years? We have currently, with gas, reduced the amount of carbon dioxide we put into our atmosphere – which was already vastly below a level harmful to animal life – and well below the optimal level for food crops. Implementing a transition into a rapidly developing technology means creating vast and costly infrastructure that will rapidly become obsolete. Do it on a smaller scale, do it where the cost of transmitting power makes it cost competitive.

    • Francisco,

      Two hundred years ago, there were about 1 BILLION people, who knew how to live with little energy.

      Now we have about 7.5 BILLION people, of which at least 4 BILLION are ENERGY GUZZLERS.

  5. Why is hydro and nuclear power considered in the same breath? Currently, Vermont doesn’t use nuclear power and there are no nuclear power plants in the State.

    On the other hand, we have the 4th largest sustainable, non-carbon, electric energy producer in the world right next door to Vermont. Hydro Quebec (HQ) sells its hydro-generated electricty in Vermont for less than half the cost of wind and solar power. HQ has all the power Vermont needs and is actively seeking to sell more of its power here.

    Again, HQ power is an abundant, sustainable, non-carbon, inexpensive, and virtually local source of electricity available for Vermonters. What’s not to like?

    • “Power plants burning energy-dense natural gas can sell wholesale power for 2-3 cents/kilowatt-hour. By contrast, power from proposed New England offshore wind projects would sell at an estimated wholesale cost of about 20 cents/kilowatt-hour.”

      HQ currently sells its power to Vermont for 5.6 cents per KWH.

    • You need to read up on HQ. They have done inestimable damage to the environment and cultures of the areas where their large man made lakes have been built. Just because it was not in your back yard does not make it fine.

      • With all due respect, I’ve researched HQ extensively and invite others to do so. Suffice it to say, I disagree with your assessment of HQ’s ‘inestimable damage to the environment and cultures’. The process and results of HQ’s power development are well documented and are anything but ‘inestimable’.

        • Here is an example of the doom and gloom predicted as a result of HQ’s development.

          “The caribou population of the northeast is also predicted to decline significantly. Just as the construction of the Alaskan Pipeline caused more than 1,000 caribou to drown as a result of their crossing of swollen rivers to breeding grounds in the northwest, the caribou of the northeast have been predicted to suffer a similar fate. This is, and will continue to be, wholesale killing of the caribou because the environmental departments of both of the contracting parties realize that the caribou deaths are inevitable.”


          When, in fact,
          “Considering the use made by the caribou of this immense territory (see Figure 14), it is difficult, if not impossible, to translate the loss of area into loss of habitat and to assess the impact on the caribou population, especially since the region’s caribou population grew spectacularly between 1970 and 1990, increasing from a hundred thousand or so to about a million.”


          • I’ve read several articles on the recent Quebec Caribou herd decline and HQ projects are not listed as a reason for the decline. The release of methane gas as the permafrost melts due to global warming, the natural cycle of overgrazing and infestation of parasites are theorized. In some cases, unauthorized hunting is blamed. But even with these declines, the overall herd (counting all Caribou species in the aggregate) is larger today than it was in 1970, not that concern isn’t warranted.

            The point being that HQ’s effects on the environment are being carefully monitored and are anything but ‘inestimable’. Just because an acorn hits us on the head doesn’t mean the sky is falling, and there is precious little reason why Vermonters shouldn’t be taking advanatge of inexpensive HQ power.

      • Roland,

        The alternative to LOW-COST, STEADY, very-low CO2 hydro would be nuclear.

        It certainly is not wind and solar.
        Do you see the sun right now?
        Do you see any wind right now?
        See my comment.

        The EAN solar build-out, TO MEET PARIS, would be from 438.84 MW dc, at end 2019, to at least 1000 MW dc, at end 2025.

        The increased solar would entail much larger, grid-disturbing, midday DUCK-curves. See VELCO graph in URL
        Managing DUCK-curves costs money. The costs are charged to ratepayers

        Solar requires significant grid extension/augmentation. The costs are charged to ratepayers
        Solar requires large land areas, about 3.5 acres per MW of panels
        Solar, heavily subsidized to make it APPEAR low-cost, nevertheless is charged to the utility rate base at 11 c/kWh (large, competitively bid, Standard-Offer systems and Utility-Solar systems) to 21 c/kWh (net-metered systems).
        Solar is the most expensive electricity on the Vermont grid. It would not be smart policy to have more of it.

        NE grid wholesale prices have been about 5 c/kWh, starting in 2009, courtesy of low-cost, clean-burning, low-CO2 gas, and near CO2-free nuclear.

        GMP buys nuclear from Saybrook’s Nuclear plant to artificially/politically lower its CO2, on “paper”, without spending a dime to REALLY reduce CO2.

Comments are closed.