Power utility says it must raise rates to compensate for green energy mandates

EAST MONTPELIER — Washington Electric Co-op is proposing to raise its electric rates by 5.95 percent, and the utility estimates that at least 1.67 percent is due to net-metering solar installations.

On Wednesday night, the Public Utility Commission held a public hearing at the Old Brick Church about the rate increase, which was proposed last summer. In attendance were a handful of local residents concerned about the higher cost of power.

With net metering, a homeowner or group of owners purchase solar installations to power their homes, and the excess power they generate is sold back to the utility at a premium. In Vermont, legislators have mandated that utilities pay these owners almost double the price that the utility normally pays for power.

If approved by the Public Utility Commission, the rate increase would be retroactive, starting Jan. 1 of this year.

Those in attendance, including GOP gubernatorial candidate John Klar and state Rep. Robert LaClair, R-Barre Town, expressed frustration about the economics of net metering. They complained that the system forces ordinary ratepayers to pay more for electricity due to the customers who participate in net metering.

Gail Graham was one of the disgruntled Washington Electric ratepayers who spoke out.

Michael Bielawski/TNR

CONCERNED ABOUT COST: GOP gubernatorial candidate John Klar and state Rep. Robert LaClair, R-Barre Town, attended a public hearing regarding rate increases for electricity rates in East Montpelier on Wednesday night.

“Now I’m feeling like I’m being penalized because I’m not buying solar panels,” she told Joan White, who was representing the Public Utility Commission. “I have absolutely no control over this — I have to have electricity.”

Another resident, Carol Hebert, said the issue comes down to basic fairness.

“I started looking into it a little bit and I said this is not fair — it’s really not fair that people are choosing to be more efficient and we’re making up that cost,” she said.

Hebert cited a Vermont statute that states that those who don’t invest in net-metering must not be forced to share the cost with those who do.

Klar, a lawyer and farmer from Brookfield, also cited this statute as reason for his frustration with the power company.

“It specifically says that, to the extent feasible, you guys will ensure that the net metering does not shift costs including in each retail electricity provider’s revenue requirement between non-metering customers and other customers,” he said.

“So if I understand it correctly, the state of Vermont is taking money from taxpayers to subsidize those who have the facilities and the money to buy panels and then having ratepayers like Gail … subsidizing it.”

Washington Electric Co-op Executive Director Patricia Richards said she has been warning state regulators about the inequitable economics of net metering for a long time, and she encouraged those at the meeting to relay that message.

“Net metering definitely drives the lender ratio bit [financial reserves required for borrowing], because I’m collecting less from all of you in terms of the total amount of revenue that I need,” she said.

Richards explained that if there were 10 customers and two of them do net metering, she needs to collect from the other eight to make up the difference for the extra money needed for the two with net metering. She said that the utility has to pay about 19 cents per kilowatt-hour for power sourced from net metering customers.

She told the audience that this is all the Legislature’s doing.

“The Legislature told the Public Utility Commission that you shall go do this,” Richards said. “So it’s not Joan’s fault, it’s not the Department of Public Service’s fault. I’m going to blame the legislators. Are there any legislators in the room?”

LaClair, the only legislator in the room, responded with his own question regarding how much of the time the turbines at the 40-megawatt Sheffield Wind installation — which Washington Electric purchases power from — are actually creating power.

Richards said while it’s technically operating 90 percent of the time, it’s only functioning at an average 30 percent of its total capacity. By comparison, the now-closed Vermont Yankee nuclear power plant operated at about 96 percent capacity.

Another renewable energy mandate that is forced on the utilities and passed onto ratepayers in the form of higher prices are the subsidies for electric cars and heat pumps. All Vermont utilities offer “greener” options to comply with Tier 3 of the state’s Renewable Energy Portfolio Standards.

“If we didn’t give away money to do these incentives and we didn’t get people to do some stuff on EVs and heat pumps, we end up paying a fine of $60 a megawatt-hour,” Richards said.

Yet another mandate is the efficiency charge, which is money taken from the ratepayers to fund Efficiency Vermont, an efficiency program created by the Vermont Legislature. Known best for the weatherizing of homes, Efficiency Vermont has now expanded into the business of subsidizing electric cars and heat pumps.

“Not everyone knows about that program or a lot of people aren’t going to qualify for it,” Hebert said. “You get some elderly people who live in an apartment, and they pay their electric bill, the landlord owns all of the utilities. They are paying an energy efficiency payment mandate and they are never going to get anything from it.”

Michael Bielawski is a reporter for True North. Send him news tips at bielawski82@yahoo.com and follow him on Twitter @TrueNorthMikeB.

Images courtesy of Wikimedia Commons/Public domain and Michael Bielawski/TNR
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14 thoughts on “Power utility says it must raise rates to compensate for green energy mandates

  1. A program to install heavily subsidized air source heat pumps in energy-hog houses has been a total flop.

    COST SAVINGS OF AIR SOURCE HEAT PUMPS ARE NEGATIVE IN VERMONT, MAINE, ETC.
    http://www.windtaskforce.org/profiles/blogs/cost-savings-of-air-source-heat-pumps-are-negative-in-vermont

    This article shows, an ASHP in an average energy-hog house in VT:

    – Displaced only 28% of the space heat from the traditional fuels. See URL of CADMUS survey report
    – Reduced CO2 from 25,123 lb/y to 20,129 lb/y, or 20.0%, if 28% of space heat from ASHPs in energy-hog houses. See table 1 and 6
    – Would reduce CO2 from 25,123 lb/y to 8,231 lb/y, or 67.2%, if 100% of space heat from ASHPs in highly sealed/highly insulated houses. See table 1 and 6. The CO2 reduction percentages would slowly increase as the NE grid would have less CO2/kWh.
    – Provided the owner energy cost savings of about $200/y. See table 7 and URL of VT-DPS website
    – Required a turnkey capital cost of about $4,500/ASHP; excludes subsidies.

    If the objective is to “get rid of” fossil fuels and reduce CO2, then the use of ASHPs in energy-hog houses in VT, NH, ME, etc., has been an expensive flop.

    https://publicservice.vermont.gov/sites/dps/files/documents/2017%20Evaluation%20of%20Cold%20Climate%20Heat%20Pumps%20in%20Vermont.pdf
    https://publicservice.vermont.gov/sites/dps/files/documents/Energy_Efficiency/Reports/Vermont%20ccHP%20Summary.pdf

  2. Vermont Shall Become FORTRESS VERMONT
    http://www.windtaskforce.org/profiles/blogs/vermont-is-going-to-hell-in-a-handbasket-regarding-foolish-energy

    Career-legislators/career-bureaucrats have come up with a catchy slogan, FORTRESS VERMONT, to fool Vermonters, and make it easier to get to their wallets and bank accounts.

    No other state is aiming to be a “FORTRESS” regarding renewable energy
    Something fishy is going on here.

    All is just a ploy to get money, extracted from tax payers, so the Perchlik-managed CEDF can distribute largesse throughout the state to favored folks, such as the politically well-connected RE companies.

    The tax payer funds will be used for subsidizing the building of excessively expensive energy systems that later turn out not to adequately reduce CO2 at a reasonable cost, as with:

    1) The grand stupidity of ASHPs in energy-hog houses.
    http://www.windtaskforce.org/profiles/blogs/cost-savings-of-air-source-heat-pumps-are-negative-in-vermont

    2) EVs replacing gasoline vehicles.
    http://www.windtaskforce.org/profiles/blogs/the-proper-basis-for-calculating-co2-of-electric-vehicles

    3) Expensively and inadequately weatherize energy-hog houses, which still would not allow 100% space heat from ASHPs!!

    Perchlik, a holdover from the infamous, corrupt Shumlin era, is on loan from VT-DPS to help the Legislature write the GWSA and FORTRESS VERMONT bill, with all the right goodies for the well-connected, such as Vermont Electric Co-op.
    Perchlik will use his bureaucratic expertise to “make things happen” regarding the GWSA and FORTRESS VERMONT.

    Remember, these are the same career-bureaucrat, career-legislator folks who, some years ago, colluded to set up a subsidized program to have ASHPs in energy-hog houses, which turned out to be an expensive flop for almost all homeowners, but a bonanza for Efficiency Vermont “approved” installers, and Japanese ASHP manufacturers.

    Remember, these are the same career-bureaucrat, career-legislator folks who, some years ago, colluded to set up a plethora of heavily subsidized energy programs that had the net effect of:

    – Lining the pockets of the politically well-connected
    – Imposing a lot of extra costs on the hard-working people, trying to make ends meet, in the near-zero, real-growth, Vermont economy.
    – Not reducing CO2 from 1990 to 2020, despite investing about $5.4 billion in energy systems over about 30 years

  3. Forcing Utilities to Buy More In-State Generated Electricity

    Recently, career-bureaucrats and career-legislators proposed to force utilities to buy 20% of their retail sales from new in-state generation by 2030, which would primarily be expensive, sporadic, wind and solar.

    The 20% mandate would be an increase from the existing 10% mandate.
    RE proponents are pressing legislators for 20%, using various scare-mongering tactics.
    See table 8 for high electricity c/kWh
    Would that not cost many billions of dollars for rate payers and for the overall Vermont economy?
    Many legislators, up for re-election, are objecting. See URLs.
    http://www.windtaskforce.org/profiles/blogs/cost-of-boosting-renewable-energy-mandate-gives-senators-pause

  4. 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.”
    https://vtdigger.org/2019/11/13/in-net-metering-talks-state-ideals-clash-with-ratepayer-realities/

    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.
    http://www.windtaskforce.org/profiles/blogs/cost-shifting-is-the-name-of-the-game-regarding-wind-and-solar

  5. I am so sick of hearing this is only going to hurt the poor people. How about the people that are paying (no help from any organization ) the bills themselves. I live on a tight budget and an so sick of paying all the added cost to my electric bill. (energy efficient charge, power adjustment, storm adjustment, emerald ash borer charge, and electric assistance program fees). If you want a ev buy it on your own dime, not mine. If you want a heat pump. buy it on your own dime, buy it one on your own dime, not mine. I was raised that you pay your own way. The only thing I get from the people of Vermont (not the state of Vermont government) is help on my property tax, which is against my principals and I thank them every year, otherwise I wouldn’t be able to live in my home of 60 years. If you aren’t poor now, you will be very soon if this keeps up.

  6. Net metering for the rich who can afford solar drives up costs for people who can’t. Wash Elec stated so. But the other thing no one mentions is that these people who put solar in, not only get PREMIUM prices for the solar electricity…the worst thing is they free load on Wash Electrics power lines. I recall that Wash Elec is one of the most rural utilities in all of USA. Which means very high costs to maintain all those rural, backwoods power lines. SO? Not only do the solar folks cram down poor peoples throats their expensive power….the “non solar poor folks” are the ones who PAY to maintain all the rural power lines ..upkeep, repairs… FOR the rich solar people…..and the solar folks pay NOTHING …to move their generated power. It is a total “Kumbaya Greenie Scam.”

  7. Thank you so much for writing this article, as it will make it easier for me to share with my friends and neighbors. I’m so glad I did attend. I want to commend Patty Richards for her excellent presentation, and for allowing us to feel comfortable during the discussion.

  8. A lot of good hidden stuff revealed in the article from the PUC hearing. Notably, most of this info showed up in print, available to the public, but in the jargon of shrewd lawyers, intentionally barely understandable. But, it’s beginning to come to light now. And will continue to do so as electric rates for more and more people increase. There never was any intention of providing cheap, in-house, renewable energy because in VT that is an impossibility. Vermont’s only shot at that went away with VT Yankee. It was the lowest price energy manufactured in VT and supplied a third of it’s power needs. VT should have requested another two Yankee station and it would be self sufficient. But, then, there would have been no room for green energy, solar fields and windmills. There would be no net metering and paybacks to homeowners, who create more than they need and no rate hike on non-solar households. This seems more logical than what is currently illogical. This is the age of insanity where the beginning of reaping what has been sown gets revealed. In those immortal words of the Mask, “Hold on to your lugnuts, it’s time for an overhaul!”

    • “VT should have requested another two Yankee station and it would be self sufficient.”

      The most correct answer to powering VT affordably…

      Thorium reactors would even use spent rods that others would pay
      your plant to fuel it. How much more “green” can you get..
      Keep electing legislators who sin tax you to feelz good keeps VT
      sliding down the slope of leftest failure..

  9. If I want something that has a cost, I have to pay for it – not someone else. What’s reasonable about having other people pay the cost of net metering? Let the people who want it pay for it. And let the competitive market determine how much the utility pays for electricity – let them buy from the lowest bidder. That doesn’t freeze out individuals who supply power to the grid – it just makes them sell competitively. No rational person thinks all this expensive folderol is going to change Vermont’s climate even though it’s been estimated that wind turbines contribute to warming.

    • The progs won’t do as you suggest. They wouldn’t be in control. They’re like having a boss who is a micro manager.

  10. Nice work if you can get it:

    1…Talk the climate talk… but when the echo fades,
    2….send the bill for the expense of it to ratepayers.
    3…Actually get paid
    4…Repeat next year

  11. The do gooders strike again. The unintended consequences of subsidizing solar has filtered down to the folks who have to pay a penalty for electricity. Why should utilities be forced to pay solar users twice for the electricity than what is charged to nonsilar folks????? Simple, it’s called VOTES!!!

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