Monday, November 10, 2014

Energy and the Vermont Election

Recently, I was asked my opinion about how the Vermont election results would (or would not ) change Vermont Energy policy. I wrote a lengthy email, which has now morphed into this blog post.

Bottom line: despite Governor Shumlin's squeaker (probable) victory, not much will change,

Scott Milne
The election

Over here in Vermont, we don't actually have a newly-elected governor.  The race was very tight, and in these cases, our constitution says that the legislature votes for Governor.  Governor Shumlin had a razor-thin margin over Republican challenger Scott Milne, but the legislature will decide.  If the Libertarian vote was combined with the Republican vote, Shumlin would have lost, but that is not very relevant.  Governor Shumlin says he is "personally humbled" by the election results.

Our legislature will decide.  Despite gains by the Republicans, our legislature has a heavy majority of Democratic/Progressive members, and so we can assume that our current Governor, Governor Shumlin, will be re-elected when the legislature convenes in January. Milne has not conceded victory.

In other words, Vermont's energy policy is unlikely to change very much on the basis of this election. The majority leader of the Vermont House is resigning, but I doubt if any relevant committee chairs will change.

The gas pipeline

The Governor (and others of his party) must be aware that he lost votes by supporting the Addison gas pipeline extension.  That awareness probably will not stop the pipeline, but it may affect Vermont energy policy going forward.  Also, Green Mountain Power is buying a great deal of its power from the grid, and its Hydro-Quebec contracts are "market-follow."  So I expect electricity price rises in Vermont, starting in January.  However, this has nothing to do with the elections: the purchase agreements are already in place.

The Governor's race in Vermont was very tight, but we can expect Governor Shumlin to be re-elected by the legislature when it comes into session in January.  (Such an election is required by Vermont's constitution in situations where neither candidate has over 50% of the votes.) This means that Vermont energy policy is unlikely to change very much.  However, Shumlin supported the Addison gas pipeline extension.  His tight race may have taught local politicians that if they support gas pipeline extensions,  they themselves will lose supporters.  This could have an effect on Vermont energy policy in the future.

Many pundits seem to agree, however, that energy policy was not the deciding factor in this election.  Issues included that Governor Shumlin never explained how he was going to fund Single Payer health care. Also, his attempt to buy land super-cheap from an impoverished neighbor led to doubts about his personal integrity.


Governor Shumlin
Other factors, not dependent on this election, will have the major effects on Vermont electricity

Vermont Yankee will close down in December, and it produces about 70% of the electricity that is produced within the state.  This may affect Vermont power costs or reliability. Even though Vermont utilities did not explicitly purchase Vermont Yankee power, the power was very available on the local grid and was part of the  "grid power" that they bought.   Now much more power will have to be imported.

Vermont utilities have some PPA power, such as 60 MW fixed-price Seabrook power. However, much of their power (market purchased power, Hydro-Quebec "market--follow" contracts) follow the prices on the grid. Therefore, in general, we can expect Vermont electricity prices to rise and be closer to parity with the prices of other New England states.

Also, some New England states no longer buy RECs (renewable energy certificates) from Vermont. Inability to sell RECs may accelerate Vermont's electricity price rise, because less out-of-state money will be flowing to our local utilities.

In short, the election itself will have few immediate effects.  Yet we can expect long-reaching changes  to electricity costs in Vermont.


Anonymous said...

Well, I'm glad to see Milne did well, but close don't count, and a close loss is still a loss. Things might not change with either Milne or Scumlin, but I would have liked to have seen Scummy go down just because of what he did to VY and all the people who depended on it for their livelihoods. That lousy 'Rat should at least have to face those whose lives he ruined.

Mary Gerdt said...

Thanks for this analysis. Sharing with our Stop the Vermont Gas
pipeline group and blogging forward. In spite of strong public outrage at building a pipeline Through farmlands and under the lake, the Governor...the powers that be, want the pipeline awful bad. Why did anti Yankee sentiment catch on like wildfire and my poor overtaxed neighbors are fighting Canadians for their own land? Even Bill McKibben, Ripton resident, has not one bad word about a pipeline...His employment at Middlebury College is boss in his life. Environment second. I believe the pipeline under Lake Champlain could be a disaster unmatched by nuclear power generation. My Sunday rant...Have a Great day! Mary