Updated: Renewables Plus Taxes: The Total Energy Study

Right now, you can comment on the Total Energy Study, the follow-on report for Vermont's Comprehensive Energy Plan.  Comments are open until January 22.  Email address:   PSD.TotalEnergy@state.vt.us


----Also, please see the update at the end of this post.---

The Earlier Version: the Vermont Comprehensive Energy Plan

In 2011, the Vermont Department of Public Service released the Vermont Comprehensive Energy Plan, a plan for moving Vermont to 90% renewables for ALL energy use (not just electricity) by 2050.

Except it wasn't a plan for the future. In my opinion, the Comprehensive Energy Plan was about gas pipelines, which is why I called my post about it: Hurry Up. Hurry Up. Renewables. Don't Pay Attention to the Gas Pipeline. The Plan used a lot of space talking about natural gas.   Later, I wrote an op-ed:  Vermont's Renewable Energy Plan is Wishful Thinking.  I quoted a woman who spoke about the Comprehensive Plan at a meeting before the Public Service Board:  "It's not a plan, it's a collection of slogans."

Yes, in my opinion, the Comprehensive Energy Plan was a collection of slogans, along with some encouragement of natural gas.  There was no plan involved.

The Total Energy Study: A Plan for Policies

Now the Department of Public Service has a new plan--the Total Energy Study.  You could describe the Total Energy Study (TES)  as  planning document meant to help prioritize policies, and the policies will help build a plan which will fulfill the goals (or slogans) of the Comprehensive Energy Plan.

You can find the links to the TES documents on the Public Service Department website. Here's the main report and here are the appendixes.  The report was released on December 16, and the public comment period lasts through January 22. You can comment address: PSD.TotalEnergy@state.vt.us

Is TES a plan?  Well, yes, but not the kind of plan I would have expected.  It's mainly about policy choices, not technical choices, and I'm kind of a technical-choice wonk.  Here's a quote from a section called "What this report is not" from page 12 of the main document: While the Total Energy Study describes several policy and technology scenarios that are expected to achieve the State’s goals, these reports are not intended to be or replace the Comprehensive Energy Plan. Neither this report nor the TES Final Report will articulate or recommend a definitive pathway forward.

TES is about policy-- mostly fiscal policy.  TES is being written under contract to the Department of Public Service by Dunsky Energy Consulting, a consulting firm based in Montreal.  Besides public comments,  there were "stakeholder focus groups" on this study all last summer. The list of stakeholders is in the appendixes to the report. Dr. Asa Hopkins of the Department was kind enough to send me the Request for Proposal for this stage of the study.  It is a public document, and I link to it here.

The Policies: Raising Money for the State

 In my opinion, the "policy choices" in TES are mostly about raising money for the state government.  There are many words in this document, but the main comments are about financial policy: how to build incentives for the change to 90% renewables.  These policies include:

• carbon taxes 
• cap and trade 
• requirements for fuel-switching (I suspect if you don't switch you may have to pay a fine).

The TES document includes lengthy comments about other issues, but, basically, financial sections jumped out at me.  This may be because I am a tax-payer and rate-payer in Vermont, though not a "stakeholder." I am a simple member of the public.

Carbon Taxes and Other Requirements

Carbon taxes, according to TES, may be "revenue-neutral" with cutting back some other taxes, but that is hardly promised. Also, when I read something called "requirements for fuel-switching," I wonder how the requirements will work.  I suspect that police will not come and shut down a business if it doesn't fuel-switch well enough. Fuel-switching won't be quite that draconian!  I am pretty sure that these requirements will be enforced with....fines.  In other words, fuel-switching requirements will be another source of revenue for the government.

I also recommend John McClaughry's excellent commentary on this plan: Vermont's New Energy Gosplan. (Note: John McClaughry is vice-president and co-founder of the Ethan Allen Institute, and I am director of the Energy Education Project of that institute.)

Public Comments

According to the Public Service Department web page on the Total Energy Study, a public meeting was held in November, before the study was published in December.  However, the Framing Report for the study was available at that time.

You can send your comments on the study to the Public Service Department through email.  I encourage you to comment.  Comments are due by January 22. PSD.TotalEnergy@state.vt.us

I also urge you to read the study documents, not just my opinions of the study.  Draw your own conclusions and write your own comments.

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Thank you to Dr. Asa Hopkins

At this point, I want to give a hat-tip to Dr. Asa Hopkins, director of the Planning and Energy Resources Division of the Department of Public Service.  Dr. Hopkins has been very helpful.

I found it odd that Vermont needed a Montreal company to do a study here in Vermont,  since we have so many universities and think-tanks in this state.  I asked Hopkins about this, and he promptly and kindly sent me the Department's request for proposal and a list of the groups that answered that request.  The contract for this study was awarded by competitive solicitation.
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Update and Correction: Another Thank-You to Asa Hopkins!

Dr. Hopkins sent me these corrections this morning, which I am happy to post, and I apologize for the mistakes:


Ms. Angwin,
Two quick corrections/clarifications regarding the TES:
1)      “TES is being written under contract to the Department of Public Service by Dunsky Energy Consulting, a consulting firm based in Montreal.“ The Legislative Report to which you direct your readers was not written by Dunsky Energy Consulting – it was written by PSD staff. DEC is doing qualitative and quantitative analysis for us, under the contract from the RFP you requested. Their work will be complete in the late spring. The PSD will publish a final TES Report over the summer, building on Dunsky’s work but also reflecting our own analysis.
2)      “Also, when I read something called "requirements for fuel-switching," I wonder how the requirements will work.” The TES does not contain anything called “requirements for fuel-switching.”
Best,
Asa


Indeed, Dr. Hopkins is correct. The words "requirements for fuel switching" do not appear in the report. My error and I apologize!

 I was using these words to summarize the following section of the report (page 2) I definitely should have used the words of the report itself. I am sorry. The report lists various policies under consideration, and this is one of them. A direct quote is below, but I have added the italics.

"Renewable targets with carbon revenue: Draws from the previous two policy sets; here, the state would set a target for the renewable energy content of all fuels, placing a non-binding obligation on energy suppliers. If the target were not met within a given sector, however, the obligation would become mandatory within that sector or that sector’s carbon tax would be increased. This obligation structure would be paired with a small economy-wide carbon tax used to raise revenue applied to programs directed at making it easier for obligated parties to meet their target obligations."