Vermont Energy Plan is Basically Unworkable

2010 Known Electric Resources from PSD
Blog post about this at ANS Nuclear Cafe

Input requested

The Vermont Public Service Department (PSD)  is revising the Vermont Comprehensive Energy Plan which they issued in 2011.  They want public input by July 24,  in other words, this Friday.

Here's the main link to their page about updating the plan. The lower section of this post contains links for commenting.

Yes, the plan has been under serious discussion for about a month.  First PSD had invitation meetings (late June), now they are having public meetings (July).  Then they will issue a draft 2015 plan and request further comments later in the year. You can see local timeline here.  The 2011 plan is one of the base documents.

The Charts and the Questions

On the morning of June 30, the subject of the invitation meeting was Energy Supply Resources. Asa Hopkins is Director the Planning and Energy Resources Division of the PSD. Here is a link to his presentation. (You can see all the meeting agendas and presentations at this link.)

From Hopkin's presentation, this is the current version of the 2010 chart:

 2015 Known Vermont Electric Sources from PSD

Yes, it looks familiar.

 We've got the big green part at the bottom: HydroQuebec.  HydroQuebec falls off somewhat as the old contracts finish, but it is still steady.  Above it is the steady purple of Vermont and New York State hydropower, and the increased level of nuclear (medium blue) as the Seabrook contracts begin. Then there's that huge red part, "residual mix" (aka "buying from the grid or short-term contracts") that is supposed to diminish.  As a matter of fact, it's supposed to go away entirely.

After all, the Vermont plan is for 90% renewables, and the chart shows that we already have a big section of nuclear (relatively new long-term contracts). Nuclear is clean-air, but the Vermont plan isn't about clean air and low carbon, it's about renewables and only renewables.  In other words, with the nuclear purchase in place, in order to meet the Vermont plan, we really can't afford to buy a single electron from the grid.  We also can't afford to expand our use of natural gas.

All that white space at the top right must be filled with renewables.

The last few slides in the presentation show the PSD grappling with this problem. A slide labelled "Question #1 background cont." includes the following:
"Expected identified resources ….leave 46% of the electric portfolio undetermined."

Here come the cars and heat pumps

If you look at the 2015 chart above, you will notice that the line at the top (how much electricity Vermont is projected to require) slopes up gently to the right.  On that chart, the Vermont electricity requirement number seems to hang right around 6,000,000 MWh (6 TWh) for fifteen years.

But if you look at another chart in the same viewgraph presentation, you get quite a different picture.  This is Vermont projected electricity use from the TES (Total Energy Study)  done for the PSD.  The TES study included all sectors of energy use, and predicted that Vermont can lower total energy use significantly.  However, to do this, Vermont will use considerably more electricity (electric vehicles and heat pumps). The chart below sums this up.

Future Vermont Electricity Use, from Total Energy Study and PSD presentation

In this chart, as building heat (heat pumps) and transportation (electric vehicles) kick in, the Vermont energy use goes from around 5 TWh in 2015, to around 9 TWh in 2050.

In other words, the Known Electric Resources chart ended in 2030, with just a gentle uptick in demand, as shown by the top line of the chart. For that top line, PSD  used a VELCO projection of energy use, instead of referring to their own PSD studies.  I don't know what study they used for the "46% of the portfolio" number.

However,  if Vermont really runs all sectors on renewables and therefore electricity, we are going to need much more electricity than estimated by VELCO.  Vermont electricity use practically doubles by 2050. It looks to me as if "46% of the portfolio…. is undetermined" could be a serious underestimate of the problem.

Where will we get so many renewables?  I think that buying from Hydro Quebec seems the only realistic option. And of course, HQ will love the sight of Vermont needing to buy their power!  Talk about Vermont having no bargaining position whatsoever.

Ah well. We can always write to the PSD, and encourage them to read their own reports.

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To comment to PSD

 PSD has specific questions,  which they describe in this document:

http://publicservice.vermont.gov/sites/psd/files/Pubs_Plans_Reports/State_Plans/Comp_Energy_Plan/2015/2015%20CEP%20Update%20Process%20kickoff%20FINAL.pdf

You can make comments through SurveyMonkey

https://www.surveymonkey.com/r/?sm=1NTqHoQRyM1MBw1NQ9xeThq78cUOihKpFdnD4A2EqZE%3d

Or, you can answer questions through SurveyMonkey https://www.surveymonkey.com/r/?sm=kjY2yQok9BGK%2f38FGcFM%2b6pO9xwR%2fNdD7QARhCJpNA8%3d

Once again, the main page about the 2015 plan is here.

The 2011 Plan, the Reports since 2011, and the 2015 plan

The 2011 Comprehensive Plan  was quite lengthy.  It consists of five documents: a one-page overview, a 14 page summary, a 314 page main document, an appendix document (each appendix is separately paginated: I guess the appendix document at 200 pages) and a 26 page "public involvement report." (This last report contains a very amusing typo at the bottom of most pages.  I know that everybody makes mistakes, including me. No big deal. Still, I find my little smiles where I can.) You can find links to all these documents at 2011 Comprehensive Energy Plan.

On to the 2015 plan.

There's a ten-page document of questions about the 2015 plan CEP Process Kickoff Final.  This document contains a lengthy list of energy reports that have been issued by state agencies since 2011.   Yes.  There's a lot of reading ahead if you want to read everything before commenting on the 2015 plan.

You won't have time to read all this before Friday.  I hope this blog post has given some guidance.

Opponents Claim That Vermont Yankee is More Dangerous Than Ever

The Claim: It's More Dangerous Than Ever

All the fuel has been removed from the Vermont Yankee reactor, and is now in the fuel pool. Please keep that in mind as you read the rest of this blog post.

Weather Update: I have heard that the opponent's meeting tonight in Brattleboro has been cancelled due to weather.

A Letter About the Increasing Danger

Fuel pool
Wikipedia

A recent letter in the Greenfield, MA, Recorder claimed that Vermont Yankee is Still a Public Safety Threat. The first sentence of her letter says: When Vermont Yankee nuclear plant shut down on Dec. 29, 2014, the threat to public safety did not end, in fact it may have increased

Ms. Kosterman is concerned with the spent fuel pool, the fact that Vermont Yankee is downsizing its staff, and the end of some types of planning and notification for the Emergency Planning Zone.  Of course, she mentions the terrible situation of the Fukushima spent fuel pools where...well, actually, nothing happened at the Fukushima fuel pools, but she doesn't mention that.

A quote from Kosterman's letter:

With Vermont Yankee downsizing its staff, is there enough security and oversight to protect citizens from terrorist threats? And, if we lose power due to severe weather or if the grid goes down for any reason, will the backup generators be sufficient to cool the spent fuel pool to ensure public safety? 

She recommends writing the NRC during the decommissioning comment period, and asking them to deny any request by Entergy that lowers the company's expenses for safety-related funding.

The State Says It Needs to Monitor the Fuel Pool

Well, yeah sure. That was a letter from a member of the local anti-nuclear campaign. Surely the state government takes a more realistic view?

Don't bet on it.

As I described in a recent post, the NRC allowed Vermont Yankee to downsize their data systems and staffing, now that the reactor is de-fueled. The state is officially worried about this.  An article by John Herrick in Vermont Digger quotes Chris Recchia, Commissioner of the Vermont Department of Public Service, as follows:

(Recchia) said the state is evaluating an appeal to a decision by a federal panel that approved the elimination of the data system.
He said he has “deep concerns” about the safety of the plant without the state being able to monitor radiological conditions in the spent fuel pool..... Without the data management system, the state will not have real-time access to the conditions in the pool.

Apparently the state feels it needs and deserves real-time data on the fuel pool.


Gearing Up for the NRC Meeting 

On February 19, in Brattleboro, the NRC will hold a meeting on the Vermont Yankee decommissioning report. (I recommend the Entergy's VY Decommissioning web site for access to all reports.)   The opponents are gearing up for this meeting by hosting two preparatory meetings, one in Brattleboro on Monday February 9 (I have heard this meeting has been cancelled due to weather), and one in Montpelier on Wednesday February 11.

The opponents don't seem to know that the reactor is shut down.  A quote from the Montpelier meeting announcement:  With the slow motion Fukushima disaster highlighting the vulnerabilities of Mark 1 reactors, how will the state deal with the increased vulnerability of this aged reactor?

Hey guys....news flash!  The reactor doesn't have fuel in it!  The fuel has been removed!  The reactor is  no more vulnerable than any other large inert piece of metal.   Sigh. Sometimes, "respecting your opponents" can be uphill work.

With or without my respect, the opponents are getting ready to confront the NRC again.  Leslie Sullivan Sachs, a leader of an anti-nuclear campaign, wrote this letter to The Commons:  You Don't Need to be a Rocket Scientist. Her letter focuses on being heard at the February 19 NRC meeting on Vermont Yankee decommissioning.

Beyond the NRC Meeting: Gearing up for petitions and contentions

Another nuclear opponent, Clay Turnbull, wrote a comment on Sach's letter. Turnbull felt it was important to say that the February 19 NRC meeting will not be the last chance to take an important part in Vermont Yankee decommissioning.  Here's part of Turnbull's comment on the Sachs letter (I can't seem to link directly to the comment.)

Point of clarification: NRC will be holding a Public Meeting, not a Public Hearing. In a meeting there is no test of truthfulness. In a hearing everything NRC says in under oath and on the record. .....whenever NRC licensing actions involve nuclear reactors, as it the case at Entergy Vermont Yankee, an opportunity to file requests for a hearing and to file a petition to intervene comes with that licensing action. Each time Entergy requests a licence amendment or exemption from regulations is an opportunity for the public to challenge that action with all parties under oath....the public meeting on Feb 19...(should be seen) as the beginning, rather than the end, of opportunities to engage NRC... [Edited to add: The writer is a staff member of the New England Coalition, an antinuclear organization based in Brattleboro.]

Note: Howard Shaffer also has a comment on the Sachs letter.  His comment is excellent and worth reading.

Fear or money? My cynical impression on all of this

I don't think the anti-nuclear groups are equally afraid of a closed plant and an operating plant.  However, I do think they are afraid of losing their funding.  Because, after all, if you successfully "eliminate the danger" by closing the plant,  people may begin to direct their donations and their activism elsewhere.  To maintain funding, you have to say that the plant is still very dangerous.

If a plant being decommissioned is as dangerous as an operating plant, then the fear goes on.  And with  the fear (with any luck), maybe their donations will go on, too.

A State of Extortion: Conditions for a Vermont Yankee Certificate

John McClaughry
at a dinner in his honor

The Prediction: John McClaughry

Shortly after Entergy announced it would close Vermont Yankee in 2014, Governor Peter Shumlin decided that people should work together, not fight with each other.  Specifically, Shumlin said that his administration would “use this opportunity to build better relations with Entergy.”

John McClaughry doubted that statement.  McClaughry is one of the founders of the Ethan Allen Institute, and he predicted that better relations between Entergy and Shumlin were not going to happen.  Better relations weren't in the cards (to use a fortune-teller analogy).   Governor Shumlin would continue to behave the way Governor Shumlin behaves.  

In early September, a few days after Shumlin's announcement, McClaughry wrote an op-ed which was published many places in Vermont:  Governor Shumlin's Unlikely Olive Branch to Entergy. Here's the quote with the prediction:

With this long, outspoken, and unbroken record of opposition to the nuclear plant and its corporate owner, can we expect Peter Shumlin to now seek “better relations” with Entergy? It’s far more likely that he, his regulators and lawyers, and his legislative friends will spend the rest of his time in the Governor’s office extorting every last dime out of Entergy to fund their own pet projects, and when that is pushed as far as it can go, forcing Entergy to spend as much as possible through more of the “cumulative regulation” that Entergy says contributed to its decision to close the plant.

The Pondering: State Weighs Conditions for Entergy

When Entergy announced it was closing the plant, the state "weighed the conditions" they would put

Commissioner Recchia
from DPS site

on Vermont Yankee's continued operation for a final year. 

The Public Service Board was still considering a Certificate of Public Good (CPG) for Vermont Yankee when Entergy announced it was closing the plant.  Entergy quickly filed an amended petition with the Board, asking for a CPG for through the end of 2014, instead of through 2032.  Under Shumlin's administration, the Department of Public Service (DPS) had opposed the 20-year extension.  Would they also oppose a one-year extension? 

When Entergy filed for a one-year extension,  Chris Recchia, commissioner of the department, said the department was considering its options about the one-year extension. Here's a quote from Andrew Stein's article in Vermont Digger. 

“The options are to support it (the one-year certificate) with conditions or oppose it unless there are conditions,” he (Recchia) said.

The Prediction Fulfilled: Also Known As The Shake-Down

First, we have to admit that the state learned some very expensive lessons in various courts.  The DPS considered recommending a time-table for decommissioning, or recommending how the plant should handle spent fuel.  But then they thought better of it. Recchia noted that these areas fall under the purview of the Nuclear Regulatory Commission.  

“We felt we needed to focus on areas where we have jurisdiction,” Recchia said.  (From Oct 25 article Terri Hallenbeck in the Burlington Free Press.)

If DPS tried to regulate safety, they could lose in court. Gathering money from Entergy seemed a more reasonable tactic.  DPS recommended that the Public Service Board should extract money from the plant in return for a fourteen month CPG.  Specfically, DPS recommend that Entergy must

• Put $60 million dollars in a separate trust fund for decommissioning within 21 days of receiving a certificate of public good from the state (Anne Galloway article in Vermont Digger)
• Put $4.65 million dollars into a fund "for the state to disburse" for dislocated worker assistance (Terri Hallenbeck  article). 

Another justification given for Entergy contributing $4.65 million to the state is that the state will lose its "generation tax" revenues when Vermont Yankee stops generating power.  As Galloway wrote in Vermont Digger:

"Once the plant closes, that source of state revenue (the generation tax) will disappear. Recchia says Entergy should be required to continue to make some kind of payment to the state to make up for the economic impact of the sudden, unplanned shutdown."

In other words, McClaughry predicted the situation accurately.  The scenario (extract money and attempt to make decommissioning as expensive as possible) is unfolding exactly as McClaughry predicted it would unfold.

Note from blogger: "Sudden unplanned shutdown"?  Huh?

Second note from blogger:  Will these "generation tax" substitutes actually be used for Vermont Yankee employee assistance?  Your guess is as good as mine....

The Good News and the Bad News


Good News:  This is the state's final chance to extract money. In Andrew Stein's article in Vermont Digger (State Weighs What Conditions to Place on Vermont Yankee Closing) Stein quotes Ray Shadis, a long-time plant opponent.

"It is unclear at this point if Entergy VY, if it closes in 2014, will ever have to appear before the VPSB (Vermont Public Service Board), or for that matter, any state regulatory body ever again,” he (Shadis) wrote to the board. “Chopping the proposed period of extended operation really appears to narrow that possibility and proportionally heightens the need for the VPSB and the parties to ‘get it right.’”

Bad News:  It's not really bad news. More like "major uncertainty."  If the Public Service Board puts tens-of-millions-of-dollars of conditions on a certificate of public good, and Entergy had planned to operate the plant only for a few more months--what will Entergy do?  

It may not be worthwhile for Entergy to litigate in the hopes of merely several months operation.  Also, if Entergy doesn't sign the new CPG, they don't have to abide by its multi-million dollar conditions.  In other words, Entergy might quite reasonably decide not to sign, not to litigate, and simply to close the plant a few months earlier. 

I hope this would not happen, but it could. 

"Building better relations with Entergy" indeed!

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You can link to the complete, 50-page DPS filing from the Vermont Digger article.  I link to it here for convenience. I am always grateful when Vermont Digger links to the original documents. 

John McClaughry, the man who made the prediction, is vice president of the Ethan Allen Institute (www.ethanallen.org). The Energy Education Project (directed by Meredith Angwin) is part of the Ethan Allen Institute.

Very Latest Lawsuit Updated: Vermont DPS not joining opponent

The Ruling and the Lawsuit

In my blog post a few days ago,  The Very Latest Lawsuit,   I described an order that the Public Service Board filed, which was strongly-worded against Entergy, but was not a summary judgment against the plant.

In response to that order, an opponent group, New England Coalition Against Nuclear Pollution (commonly called NEC), filed a suit in Vermont Supreme Court to have the Vermont Court take action and shut down the plant.

On the radio, Pat Bradley of WAMC had interviewed me and Pat Parentau of Vermont Law School.  I am a plant supporter: Parentau is an opponent.  We both agreed that this suit was not likely to get anywhere.

However, NEC hoped to have the Vermont Department of Public Service (DPS) join them in the suit, as DPS had joined them in other suits to attempt to shut down Vermont Yankee.

DPS will not join NEC in this one.

The Department of Public Service Steps Away from NEC

Yesterday, to my surprise, the DPS filed a brief asking the Vermont Supreme Court to deny the NEC appeal. Here's the Burlington Free Press article on the DPS filing  I also link to the DPS filing itself  posted at the Energy Education Project website.  The introduction to that filing:

While the Department appreciates the dedicated work of NEC and other parties over years of litigation with Entergy, the Department nonetheless respectfully requests that the Court refuse the relief requested under 30 V.S.A. $ 15. NEC's complaint does not encompass proper grounds for Section 15 relief; and other reasonable relief is available in pending proceedings before both the Board and the Second Circuit Court of Appeals.

Well, okay, DPS isn't really stepping away from NEC: they mention "dedicated work" and all that. But DPS realizes that there is no reason to open a docket in a new court for a case that is under active review in two other courts, federal and state.

The DPS decision somewhat confirms my belief that the NEC filing in Supreme Court was more for NEC publicity than to win the case.  Indeed, looking at the DPS filing, I realize that if DPS had joined NEC in this filing, DPS would have been undercutting the authority of the Public Service Board to make a ruling on the new docket for the Certificate of Public Good.  In retrospect, I realize...of course DPS wouldn't join NEC in this one.

I am talking about 20-20 hindsight here.  A few days ago, I thought DPS would join NEC in the Supreme Court filing, since that has been DPS's reaction in the recent past: "NEC is suing--let's join!"

Pat Parentau and I agreed with each other on the radio show a week ago: this filing will almost certainly be dismissed by the Vermont Supreme Court.  Looks like DPS came to a similar conclusion.

Howard Shaffer Post at ANS Nuclear Cafe:

Howard Shaffer has a great post  ANS Nuclear Cafe today: politics, lawsuits, and trials. Vermont Weather Gets Colder.  Vermont Yankee Politics Continue Hot.  I encourage you to read it.

Vermont Loses Lawsuit Against NRC about Water Quality Permit

The Intervenors (and Vermont) Sue the NRC and Lose

The New England Coalition (NEC) is an intervenor that has fought Vermont Yankee since before the plant opened.  About a year ago, NEC brought a lawsuit against the NRC.  NEC claimed  that the NRC should not have granted Vermont Yankee a license extension because the plant did not have an up-to-date water quality permit issued by the state. They claimed that Vermont Yankee's NRC license was invalid, and had to be rescinded.

Late last month, NEC lost the lawsuit.  The U.S Court of Appeals in Washington D.C. ruled against NEC and for the NRC.  You can read the ruling here.

Liz Miller
DPS Commissioner

Oops!  Did I say NEC lost the suit?  What I meant was that the Vermont Department of Public Service  (DPS) and NEC lost the suit, because Vermont joined the suit.  DPS joined the suit big-time.  Liz Miller, the DPS Commissioner, argued the case before the Court.

The State's Case and My Opinion

I found the state's case quite odd. I wrote an blog post last year -- A State of Confusion: The Suit about the Water Quality Permit.  As I said at the time: the state is the one that issues water quality permits.  If the plant's water quality permit was not up to the state's requirements, the state should have insisted that the plant do something about this.  Instead, the state sued the NRC, saying the NRC should not have issued the license extension.

In other words, Vermont claimed that Vermont hadn't cared about the water quality permit status, but the NRC should have cared.  My guess was this argument wouldn't convince a court.

It didn't.

The Court's Opinion

The court ruling was related to what I had expected, but different.  The appeals court ruled that the state had an obligation to bring up this contention before the NRC during the hearing, not wait until the license was granted and come in with an "oh, by the way" lawsuit.  To quote the ruling:

“.. petitioners here were required under agency regulations to afford the full Commission an opportunity to pass on the section 401 issue before seeking judicial review. And they had repeated opportunities to do so...[they] sat silent for two and one-half years thereafter, raising their... objection only after the Commission issued the license renewal in March 2011.”

The Opponents' Opinions

Many of the opponents cried bitter tears that the NRC had escaped on a procedural technicality.

According to VPR, a NEC spokesman, Chris Killen, said: "The New England Coalition, and all Vermonters, have now been deprived of the right that was guaranteed to them by Congress, to have a say in how this plant affects clean water." According to the same article, Shumlin's spokesman  John Being said "We're disappointed that the court declined to address our substantive water quality argument and instead ruled, based upon kind of a technical issue, a procedural issue,"

Pat Parentau
Vermont Law School

However, in the same VPR article, Pat Parentau of Vermont Law School said the court ruled on a fundamental point of administrative law.

"Where there's a clear process to raise an issue, before the commission - that‘s the key - before the commission itself - that you can't miss that opportunity and expect the circuit court to hear your argument," he said.

Pat Parentau would like to see Vermont Yankee shut down, but he knows this ruling was not procedural nit-picking.

The Next Step

Of course, Vermont claims it is considering an appeal to the Supreme Court.  Vermont always wants to take it all the way to the Supreme Court. (Take It To the Limit.)  However, most people admit that this ruling is the final ruling. The Supreme Court won't hear the case. The Supreme Court rarely reviews rulings that are made on the basis of administrative law.  So the next step is---this ruling will stand.

It's funny how often Vermont gets tripped up by the Constitution or by customary administrative law requirements, or other stuff like that. It's almost as if our administration doesn't think things through. (sarcasm alert)

Oh By The Way

Let's talk "substantive issues" here for a moment.

First issue.  Vermont Water Quality Reviews are On-Going: The Agency of Natural Resources (ANR)  has been working on a water quality permit with Vermont Yankee since 2006.  To quote a Brattleboro Reformer article on the lawsuit: ANR is still in the process of determining whether Yankee should receive a permit to discharge non-radioactive cooling water -- at up to 100 degrees -- into the Connecticut River. That process has been going on since 2006 and is not expected to be resolved anytime too soon.  In other words, what the heck was this Vermont lawsuit about?

Second issue. Why Is the Department of Public Service doing this?  The Department of Public Service is supposed to be protecting the rate-payer in hearings before the Public Service Board, not running down to Washington to join intervenor lawsuits.  However, as I said in my blog post: Gaz Metro Deal Goes Forward. Ratepayers Stiffed. the DPS is not defending the ratepayer.  The DPS is just another one of the ducks that Governor Shumlin gets in order.

The Gaz Metro Merger: The Consumers Are Not Being Protected

About the Public Service Board

In my most recent post, I urged people to look at the questions the Public Service Board (PSB) has asked Vermont Yankee, and make comments to the Board.

In today's post, I show that the Public Service Board and the Department of Public Service have not protected consumers about other utility issues. This post was published first in True North Reports, and is updated here. When we write the PSB about Vermont Yankee, it is worth knowing some related history.

If you don't have time to keep reading this post, here's the summary:

Question: Are Vermont consumers being protected by the Public Service Board (PSB) and the Department of Public Service (DSP)?

Answer: No

The Merger

Green Mountain Power (owned by Gaz Metro) plans to merge with Central Vermont Public Service. If this merger is approved, Gaz Metro, a Canadian gas pipeline company will own or control most of the energy infrastructure in Vermont. They will own the two electric distribution companies and the gas distribution company (Vermont Gas Systems). They will also (probably) control the two large transmission companies, TRANSCO and VELCO.

The Agencies That Protect Consumers in Vermont

Vermont has two agencies that regulate utilities and protect consumers. Vermont’s Public Service Board (PSB) oversees utility actions and sets rates. The Department of Public Service (DPS) acts as the consumer advocate in cases before the PSB. If these two agencies do their job, Vermont citizens should feel comfortable, no matter who owns the utilities.

Unfortunately, PSB and DPS are not doing their job to protect ordinary citizens and ratepayers.

Conflict of Interest at DPS

DPS is charged with protecting consumers, and many people are concerned with Shumlin’s appointment of Liz Miller as Commissioner of the DPS. Ms. Miller’s husband is managing partner of the law firm that represents Green Mountain Power, a conflict of interest situation that puts her actions as Commissioner in doubt.

Senator Vince Illuzzi was particularly concerned that Miller would not be able to do an appropriate job of supervising the merger. A major issue is preventing Green Mountain Power having monopoly control of the transmission companies. Such control by one massive company could hurt all smaller utilities. Illuzzi filed interventions at both the federal and state levels, asking for an independent counsel to supervise the merger. Many small Vermont utilities joined his interventions.

In response, the state appointed Michael Dworkin to study the matter. Dworkin made some recommendations on managing the transmission companies. Meanwhile, Ms. Miller said that the governor expected DPS to “kick the tires” on the merger deal.

However, even the appearance of conflict of interest can make DPS actions look biased. No matter how fair Miller tries to be, and how many tires she kicks, she is a Commissioner whose husband’s law firm represents one of the biggest players in the merger. Dworkin only studied one aspect of the merger case: the transmission companies. There are other issues about companies that Gaz Metro owns or will own, and these issues directly affect consumers.

Regulating the Pipeline

Gaz Metro (owner of Green Mountain Power) had another docket before the PSB recently. Gaz Metro plans to expand its Vermont Gas Supply pipeline from Burlington to Rutland. The docket before the PSB included the question: whose money will be used for this expansion? Surprisingly, PSB has allowed the pipeline company to raise rates on existing customers in order to extend the pipeline from Burlington to Rutland.

Not everyone of the PSB was in favor of raising the rates to consumers before the pipeline is built. Board member John Burke said that taxing Vermont ratepayers before they get any benefit was "unfair and improper.” Burke pointed out that Gaz Metro has hundreds of millions of dollars available for investment. He was overruled by the others on the board. Existing customers will pay for the new pipeline, even though these customers are already served by a pipeline. Existing customers will see higher gas rates, but will have no personal benefit from the pipeline expansion. The benefit goes to Gaz Metro, which will be able to build a longer pipeline without spending its own money.

Update: Gaz Metro just negotiated a $600 million dollar line of credit agreement. They have plenty of money to build the pipeline without being financed by Vermont ratepayers.

DPS, the designated protector of the consumer, did not take a stand on this case before the PSB.

Following Some Old Money on the Merger

There are other situations in which the ratepayers are not being protected. Since DPS did not step in to protect consumers, AARP is intervening about electric rates in the proposed GMP-CVPS merger.

To understand the AARP intervention, we have to follow some old money. Years ago, the PSB granted Central Vermont Public Service a rate increase, but the PSB stipulated they had to give that money back to the shareholders and rate-payers if their company was purchased. Half the rate increase money was to return to the shareholders, and half to the ratepayers. Since Central Vermont Public Service (CVPS) is now expecting to be purchased by Green Mountain Power, CVPS is obligated to give the money back to these two groups.

CVPS plans to give immediate per-share payments of $10 to their shareholders (share-holders half) while paying back the rate-payers by lowered rates due to the supposed $114 million savings from the merger over a 10 year period (rate-payers half).

Paying back the rate-payers through merger-caused savings is not going to be real money, not like a $10 bill in the shareholder’s pocket. PSB recently gave CVPS a rate increase of 4.8%, or approximately $17 million per year.

This new higher rate will more than offset the $11 million dollar per year “savings due to the merger” that CVPS expects to pass on to customers. AARP is intervening in the merger docket to protect low-income seniors (and everyone else). The DPS has not intervened.

DPS has not intervened to urge the PSB to protect the ratepayers in the gas pipeline or CVPS returning money they are obligated to return to ratepayers. Why not?

Update: The latest updates from AARP imply that the consumer rebate situation is even worse than I described. Two links:

• an article in Vermont Digger shows DPS intervened to make the merger look better (without changing the terms).
• an op-ed yesterday from the AARP asking Gaz Metro/GMP to pay its debts.

Conflict and the Appearance of Conflict

Conflict of interest is impossible to prove. If the Commissioner were not married to a lawyer whose firm represents Green Mountain Power, the DPS might well have taken the same stands. DPS might have approved of pipeline financing by existing customers. They might have been fine with CVPS plans to return money to shareholders with a check and return money to ratepayers through questionable future savings. No one can say that DPS acted this way because of this, or because of that.

However, once again, we are back to the reasons that governments and judges attempt to avoid even the appearance of conflict of interest. With conflict of interest in the background, all decisions the government makes have the possible taint of bias.

Governor Shumlin is an astute politician, and he should take notice of these concerns. For any rate case involving a current or potential subsidiary of Gaz Metro, owner of Green Mountain Power, Governor Shumlin should appoint an independent counsel as consumer watchdog. He should ask Ms. Miller to step aside for that case, since her husband is an executive in a law firm representing Green Mountain Power. The independent counsel should do some serious watching over consumer pocketbooks!

If he does not take this type of action, Shumlin is just handing ammunition to his opponents.

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Earlier articles in this blog have described concerns with this merger. The probable monopoly ownership was covered in Who Owns the Infrastructure. Some conflict of interest concerns were covered in Governor Shumlin and GMP. This article focuses on the probable effect of these mergers on consumers.

I wrote this post for True North Reports. I am grateful for the opportunity to reprint in this blog.

Comments on the Vermont Energy Plan

Some people have sent me copies of their comments to the Vermont Department of Public Service about the Comprehensive Energy Plan. They also gave permission for me to print the comments. The comment period for the plan ends Monday, so get your own comments in as soon as possible. Here's the link for the comment form and email address.

I can publish more comments in the future. Send to mjangwin at gmail.com

An Engineer's Comments: There is No Plan

Charles Kelly wrote:

Vermonters by nature are not wasters. They don't throw away equipment with usable life remaining. Witness all the old farm equipment and trucks still in service in our heartland. In reading the Department of Public Service (DPS) Comprehensive Energy Plan I don't see anywhere where the perfectly usable Vermont Yankee Plant will continue in service until it can be logically phased out within the extended life period certified by the NRC. The DPS energy plan admits to a gap (page 13) in electric supply before renewables and natural gas can be brought on-line. That is at least 18 years (2030) according to Daniel Yergin, Chairman of HIS Cambridge Energy Research Association in his recent book, The Quest.

The other part of the DPS plan is a natural gas pipeline installation which will service only metropolitan areas, and is also years in the making. What do we do in the next decade? The Energy Plan is weak on numbers and timelines. It is more of a statement of wishful thinking, driven by an anti-Vermont Yankee sentiment which permeates the Governor's office. In reading this Energy Plan I don't get the impression that the DPS is proud of it. I do not think they even believe in it. Tell me how my electric rates will stay affordable in the foreseeable future.

A Nurse's Comments: We Don't Plan to Shoot People Anymore

Mary Daly wrote:

I cannot believe that the State of Vermont is planning to close down Vermont Yankee and submit its citizens to high cost renewable replacement energy instead. I have been to both an NRC open house in Brattleboro and a tour of the plant in Vernon and have no concerns about the plant. This hysteria about nuclear energy reminds me of the days in the 60’s when I was going to nursing school and there was talk of arming the Emergency Room staff with guns so that in the event of a nuclear accident, the staff could kill people who had been exposed rather than letting them contaminate others. To my knowledge, there has never been a nuclear accident in the US that would have required that action. Yes, they were worried about bombs at that time.

The hysteria about the tritium leak is just that. I carry tritium with me all the time on my watch.

My request is that we support Vermont Yankee and work to build another plant in the State. That would increase jobs, keep the lights burning and not damage the environment. I bet it would also be less expensive that what you are planning too. You are also ignoring the fact that many Vermonters support wind power but NOT in their back yards. The NIMBY factor.

A Former Vermont Senator's Comments: Energy Independence at the Price of Economic Growth?

John McClaughry, founder of the Ethan Allen Institute, former Vermont State Senator wrote:

The guiding principle of the Plan’s "vision" is “to set Vermont on a path to attain 90% of its energy from renewable sources by 2050.”

The document also advocates for

• Moving toward "energy independence” by requiring Vermonters to reduce their consumption of imported fossil fuels that now comprise two thirds of the state’s total energy consumption.
• Reducing greenhouse gas emissions to 25% below 1990 levels by 2012, and 50% below by 2050, to “lower the state’s contribution to global warming.” (Act 168 of 2006)
• Strengthening and extending the various mechanisms for effecting these goals: mandates, subsidies, controls, and directives.

A more desirable and realistic plan would be , in our view, “to set Vermont on a path to assure safe, reliable and competitively priced energy that will make possible a strong, competitive and growing economic base , both for creation of new wealth and income for the people of the state, and for expanded tax revenues to enable the state to meet its fiscal obligations.”

......

The most startling omission in this voluminous plan is the complete absence, in section 3.1, of any chart or graph showing the sources of Vermont’s electrical energy now, and the sources we can expect to enjoy in future decades if the Plans recommendations are acted upon.

(This is an excerpt, read the complete comment here)

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Full disclosure: John McClaughry is the founder of the Ethan Allen Institute, and I am director of the Energy Education Project, which is part of that Institute.

Pistol image from Wikipedia.