Green Mountain Power (GMP), the state’s largest electric utility, announced last month that it will receive a $17.8 million benefit from Vermont Yankee nuclear power plant. This big check was just the latest multi-million dollar benefit paid to Vermonters by Vermont Yankee and its owner, Entergy.
When GMP and other companies sold Vermont Yankee to Entergy in 2002, Entergy agreed to share proceeds with the previous owners from any power sales above 6.1 cents per kilowatt-hour. The $17.8 million is GMP’s share of revenue generated by Vermont Yankee power sales from March 2012 - 2013. For Vermont consumers, it's a fleeting bright spot in the cloudy outlook of climbing regional power prices.
GMP Payments to Ratepayers: The History
GMP has said the $17.8 million will go directly back to ratepayers. However, we were told this once before when money from the GMP-Central Vermont Public Service utility merger was spent on state energy programs instead of being returned to ratepayers as promised. There has been plenty of talk in the Legislature this year about new rules and laws to protect the interests of John Q. Ratepayer. Here is a perfect opportunity to "walk the talk."
Given the state’s history with not fulfilling energy promises, we have cause to be concerned. The very agreement that created this most recent revenue windfall for ratepayers was predicated on Entergy receiving a timely Public Service Board decision on the continued operation of Vermont Yankee past March, 2012. That guarantee was consciously withdrawn by the 2010 Vermont Senate vote. Entergy has met its obligations to the tune of $30 million in clean energy funding, a 10 year contract that delivered below-market power to Vermont utilities, revenue sharing, and millions for Windham County economic development, while the state has moved the goalposts time and time again.
The Sources For Vermont Power
Vermonters are still waiting for the State of Vermont to deliver on its promise to deliver low-cost, low carbon power. During the protracted dispute between Vermont Yankee and the State of Vermont, the plant’s many supporters repeatedly maintained that the only viable replacement for its power would be more expensive and increase carbon emissions. This is exactly what has happened as a result of Vermont’s decision to stop buying power from Vermont Yankee. According to grid operator ISO-New England, the average market price of electricity in March, 2014 was 11.25 cents per kilowatt hour, almost three times the four cent 2002-2012 contract rate. Even if a new contract would have cost marginally more, it is plain for all to see that we're paying more now for dirtier power.
The latest solution is a recent plan announced by the New England governors to acquire more electricity and natural gas from Canada and surrounding states. How much will this plan cost Vermonters? Who will pay? And how does more natural gas reduce our “carbon footprint?” And if this plan fails we will remain hamstrung by inadequate access to hydro and other traditional forms of power, having placed too much faith in the as-yet unproven promise of solar and wind generation. It is plain to see that state energy policies have left Vermonters without any good options.
Vermont Should Keep Its Promises
For years, many Vermont leaders took every opportunity to criticize Vermont Yankee, while pitching an alternative, bright new energy future that was short on specifics. As we wave goodbye to Vermont Yankee, it’s now time for the state to restore our confidence in its energy policy. It can start by not hijacking the $17.8 million dollar Vermont Yankee benefit from GMP customers, and by keeping its promises to deliver low-carbon, affordable, reliable electricity.
Reg Wilcox, BSEE Norwich, MSEE Clarkson, is a retired IBM Senior Program Manager. Reg grew up on a dairy farm in Cambridge, worked out of state for ten years after graduate school, and returned to his home town when he began his career with IBM in 1978. In 1802, Reg’s ancestors, Nathan and Rachel Wilcox, were the first European settlers of the Town of Morgan, Vermont.
This post has also appeared as an op-ed in the Rutland Herald (behind a paywall).
Update: May 31, 2014
Governor Shumlin announces proposed rate decrease in Vermont. Press release link below:
A quote from the press release, but with emphasis added by blogger:
“At a time when other states in our region are seeing double digit increases in power costs, Vermonters are going to see rates go down this year,” Gov. Shumlin said. “This rate decrease is great news for Vermont. The agreement provides stability and predictability for one of our most valued employers, and helps ensure that Vermont maintains a thriving center of innovation and technology well into the future. This is further evidence that the merger of Green Mountain Power and Central Vermont Public Service is already delivering cost savings and putting money in Vermonter’s pockets.”