Self-inflicted Vermont energy cost increases loom on horizon

By Guy Page

On Tuesday, UVM trustees agreed to divest its endowment portfolio of fossil fuels, and Gov. Phil Scott committed Vermont to zero carbon-emissions buses and trucks by 2050. In a month or two, the Legislature may approve the Global Warming Solutions Act. The decisions will likely increase the cost of living in Vermont, barring unforeseen technological changes in New England energy generation and delivery.

According to the UVM website, “On July 14 the University of Vermont’s Board of Trustees voted to divest the University’s endowment of fossil fuel investments. It was a unanimous decision and it was in keeping with UVM’s ongoing commitment to sustainability focused policy and environmental research. The decision means that UVM will end new direct investment in fossil fuels. And it will fully divest from public investments in fossil fuels by July 2023.”

Guy Page

2017 divestment study commissioned by Vermont Treasurer Beth Pearce reports that fossil fuel divestment ties fund managers’ hands, subtracts blue chip stocks that create longterm value, and does little to reduce carbon emissions. That’s because divestment merely shifts ownership to another buyer. Divestment does not make fossil fuel companies “go away” — it merely allows the divester to wash his/her hands of ownership. But even this act of cleansing purification has a practical climate change downside: no ownership means no more influence on corporate policy. UVM will no longer be able to saunter into Exxon stockholder meetings and demand change.

UVM of course is facing a huge pandemic-related deficit. Its endowment funds ongoing programs, and is the “rainy day fund” of last resort. It’s hard to see how divestment would improve the university’s financial standing. But regardless, the long battle with UVM trustees now won and done, climate activists likely will now turn their attention to the big prize: Vermont’s multi-billion dollar state/school/municipal employee pension funds. In 2017 Pearce and the pension fund representatives fought off divestment tooth and nail on fiduciary grounds.

Vermont’s pension fund has declined in 2020. Rep. Bob Bancroft (R-Westford), a professional economist, wrote to Vermont Daily yesterday: “During 2019, the unfunded liability grew from $4.5 billion to $4.6 billion despite a catch up contribution [from the Legislature]. This was on top of the regular actuarial contribution. It was a banner year for the stock market. I can only imagine what the unfunded liability is today. There are only three ways to address this problem, increase taxes, cut spending or declare bankruptcy. People need to be made aware of how significant this problem is.”

The March, 2020 report for the Vermont State Employees’ Retirement System pension fund shows that the fund value dropped 10.9 percent in the first three months of 2020. The less money in the fund, the higher the unfunded liability. Forced divestment would add to the existing woes of unfunded liability and shaky investment value.

As reported Tuesday, Scott pledged that all new buses and trucks will be zero-carbon emitters (likely electric) by 2050. He said at his press conference 2050 is a long way off and the intent is to drive the industry away from internal-combustion and towards electric. Cost-conscious electric vehicle advocates hope mass production and better tech will reduce price disparity; electric buses now cost $750,000 compared to $500,000 for diesel.

Public transportation is already a drain on Vermont tax revenue, and will become even more if Vermont’s trend towards fare-free riding and expanding routes into rural areas continues. Like college and health care, transportation should be “free,” progressive policy makers say. In practice they shift the cost from the consumer to the taxpayer or other source of public funds.

The multi-state agreement to which Scott pledged Vermont does not yet recommend a “carbon tax.” However, until last year neither did the Transportation and Climate Initiative (TCI), a multi-state agreement to reduce all transportation carbon emissions. Only in its final planning stages did the states roll out a specific scheme forcing gasoline and on-road diesel consumers to pay more at the pump. Until the cost of buying and running electric buses reaches market parity with diesel, that extra cost will need to be recovered somewhere, somehow. And as long as riders stay off the hook, that leaves local, state and/or federal government the likely payers.

The point of all of this climate change advocacy is to transition America from fossil-fuels to renewable power. Transition isn’t necessarily a bad thing. Vermonters breath cleaner air with a lower carbon content due to high-value transition away from coal and oil to natural gas and nuclear power and Canadian hydro power. The pandemic itself has transitioned many Vermonters away from commuting to work — for many of us, perhaps forever.

But consumer-driven transition isn’t what the climate hawks have in mind. VPIRG and other advocacy groups are run by solar/wind renewable power advocates, including many board members who are longtime owners or investors in renewable power companies. For them, low-carbon, low-cost alternatives like nuclear, hydro and natural gas are as much the enemy as oil and coal — perhaps more so because many voters finding these existing, small-footprint plants aesthetically and financially preferable to endless acres of subsidized solar panels. A Senate bill to make Vermont renewable-reliant shows that transition would cost ratepayers $1.2 billion over the next several years.

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

Image courtesy of Wikimedia Commons/James Ennis
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8 thoughts on “Self-inflicted Vermont energy cost increases loom on horizon

  1. THE GLOBAL WARMING SOLUTIONS ACT A DECADES-LONG BURDEN ON VERMONT
    https://www.windtaskforce.org/profiles/blogs/the-global-warming-solutions-act-a-decades-long-burden-on-vermont

    EAN, VEIC AND VELCO MAKING A SELF-SERVING JOINT ATTACK TO GAIN THEIR OBJECTIVES

    All three entities want to build out solar from 438.84 MW dc, to at least 1000 MW dc, by 2025, even though solar:

    – Is, by far, the most expensive electricity in the portfolio of Vermont utilities. Table 2 shows some of solar costs shifted onto ratepayers, taxpayers and added to government debts See Appendix.
    – Imposes the greatest threat to the stability of the grid, due to ever-larger DUCK-curves, as has happened in southern Germany and southern California. The more solar, the larger the DUCK-curves.
    – Would make the use of EVs and heat pumps less attractive.

    NOTE: The CEP mandated goal is 1000 MW dc, by 2032

    “Meeting Paris”: In 2019, EAN made estimates of what it would take to “meet Paris”, i.e., reduce CO2 from 9.76 million metric ton, at end 2016, to 7.46 MMt, at end 2025, or 2.281 MMt. See URL

    EAN/VEIC/VELCO Self-Serving Goals by 2025 are Unrealistic

    Their goals appear to be extremely dubious with:

    1) The Federal EV tax credit having been cancelled
    2) The solar Investment Tax Credit expiring in 2022
    3) The multi-year recession and high unemployment due to the virus economy.
    4) ASHPs Marginally Effective for Reducing CO2 in Average Vermont Houses. See URL
    5) EVs Minimally Reducing CO2 Compared with Efficient Gasoline Vehicles. See URL

    Major increases of taxes, fees and surcharges on ratepayers, taxpayers, and adding to government debt to pay for their self-serving, dubious claims, likely would not be a palatable option

    VERMONT CO2 REDUCTION OF ASHPs IS BASED ON MISREPRESENTATIONS
    This article shows ASHPs are ineffective in average Vermont houses.
    Owners lose money each year, and the CO2 percent reduction/ASHP is minor.
    EAN/VT-DPS used 34 g CO2/kWh to evaluate ASHPs, about 9 times less than NE grid CO2/kWh!!!
    http://www.windtaskforce.org/profiles/blogs/vermont-co2-reduction-of-ashps-is-based-on-misrepresentations

    VERMONT CO2 REDUCTION OF EVs IS BASED ON MISREPRESENTATIONS
    This article shows owners would have cost savings/mile, even if compared against a higher-mileage gasoline vehicle
    The CO2 percent reduction/EV is minor, if compared to a higher-mileage gasoline vehicle, on a lifetime basis.
    EAN/VT-DPS used 34 g CO2/kWh to evaluate EVs, about 9 times less than NE grid CO2/kWh!!!
    http://www.windtaskforce.org/profiles/blogs/vermont-co2-reduction-of-evs-is-based-on-a-misrepresentation

  2. Divest fossil fuels? What a Kumbaya Cancel Culture idiocy move. Because when the UVM management/Board met on this…they got to the meeting by CARS…which runs on fossil fuel. Few people have 100% electric ones. So without their fossil fueled car there may have been no face to face meeting – to get rid of “fossil fuels”. every piece of plastic IN YOUR CAR…be it a Tesla or gas guzzler..plastic comes fom fossil fuel. What heats most Vermonters houses? Fuel oil. Many use wood too….but wood smoke REALLY pollutes worse than what comes from your oil boiler. Even better? NATURAL GAS is the cleanest, safest and lowest cost fuel. But VT liberal enviros want to ban it, because it is fossil fuel? they ban by fighting any pipline construction to distribute it. Just call it a day readers here…Progressives own VT now. It will not change. It took them slowly and well planned 40 years to do so… Either you give in to “all woke-ness” and stop your complaining…., or you get out – and live the remainder of your life… happy & free and a LOT more money in your pocket….less taxation without repsentation….

  3. The sky is falling ! The sky is falling ! Everyone get rid of your fossil fuel related investments and invest in non-reliable renewal energy sources. When the sun isn’t shining and the wind isn’t blowing then everybody can enjoy another covid-19 like shutdown but without heat or light.

  4. I want to see the plans for these zero emission snow plows and trucks delivering to stores.

  5. In divining the goals of political moves one might do well to turn a deaf ear to the motivations claimed by the promoters and instead concentrate on the rationally foreseeable results of those actions, to assume those to be the actual desired ends. Short of birthing its own volcano, nothing done by Vermont is going to alter its own or the global climate; the motivations, hence, are elsewhere to be sought. Given the nationwide Progressive effort to promote anarchy and overthrow both the civil and economic stability of the nation in their quest for dictatorial power under the rubric of Social Justice, I submit that the obvious outcome of the AGW programs is exactly the outcome we may rationally expect, to impoverish all but the select few, drive the state into bankruptcy and consolidate power in the government. It will, patently, do nothing to the climate. That is a ruse.

  6. Gov. Phil Scott committed Vermont to zero carbon-emissions for buses and trucks by 2050.

    Scott is 61 years old today and will be 91 years old in 2050 when his ‘commitment’ comes to fruition. My guess: he won’t remember it. Being ten years older than Scott, and assuming buses and trucks are still the transporation of the day, I know I won’t remember it. That’s politics for you. Old men making promises they can’t keep.

  7. I’m enjoying my sub .06/kWh electricity right now while thinking back To when I paid the efficiency Vermont tax and how convoluted it was to try and only use their certified contractors… then watching folks from N.H. and NY crossing into VT for only one reason. To buy LED lightbulbs subsidized by all the hard working Vermonters . Man glad I don’t have to endure that bloated bureaucracy.

    You guys are skewed

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