Energy measures gained little traction, but will come back to life next session

Several key energy investments and policies fell by the wayside during the 2013 legislative session.

But Chris Recchia, commissioner of the Public Service Department, and Rep. Tony Klein, chair the House Natural Resources and Energy Committee, say they will prioritize investments in thermal efficiency and the state’s Clean Energy Development Fund in the second half of the legislative biennium. Outside of Klein’s committee, these investments barely saw the light of day this past session.

Klein also vowed to put policy for siting of energy projects front and center next year. Here is an overview of the legislature’s action on energy issues.

Thermal efficiency

At the beginning of the 2013 legislative session, a 65-member Thermal Efficiency Task Force recommended $267 million in new public funding over seven years for thermal efficiency outreach efforts and upgrades.

The task force estimated that current programs, such as the Vermont Weatherization Assistance Program, are on track to renovate 18,000 homes by 2014. At that rate, the state would fall short of its statutory goal to weatherize 80,0000 homes by 2020 by about 40,000, according to the group’s final report.

The task force called for an initial allocation of $27 million in fiscal year 2014, with an increase in the annual installment to almost $40 million in FY 2020.

Gov. Peter Shumlin proposed an allocation of $6 million for thermal efficiency. The Legislature, however, did not provide any new money.

Klein and Recchia touted House bill 520 for streamlining state processes to better take advantage of thermal opportunities, like prioritizing weatherization services for lower income Vermonters and ensuring the state gets the best fuel prices available for low income heating assistance. But Klein and Recchia say that the extra funding for thermal efficiency is the most important piece of the equation, and it’s missing.

“It’s the most critical part because without the funding, you’re not going to get the job done for all of the low-income Vermonters that are eligible for this help,” Klein said. “It’s also critical in that it means jobs, and it means it keeps money and tax money within the state. In the big picture, there’s no downside to do it.”

The major reluctance for most Vermonters, Recchia said, due to is the initial cost of making such improvements, and he’d like to see the state allocate between $5 million and $8 million to help reduce those up-front costs.

“We have so much work to do in this area,” he said. “It’s one of the most cost-effective ways of reducing our energy demand. It’s directly related to oil, as opposed to electricity generation, and it will make individual residences more comfortable and energy effective.”

The appropriation for thermal efficiency never came to fruition, in large part, because the proposed revenue options were controversial. One of the task force’s chief revenue suggestions was to tax heating fuels, such as oil, kerosene, propane and natural gas.

Shumlin proposed funding the thermal efficiency initiatives with revenue from a 10 percent excise tax on break-open tickets for lottery-like games. The administration estimated that tax would raise $17 million annually, but the Legislature’s Joint Fiscal Office said it would raise about $6.5 million. The proposed tax was off the bargaining table when the final gavel of the session fell.

With that original $17 million, the governor also recommended appropriating $6 million to the state’s Low Income Home Energy Assistance Program, or LIHEAP, and $5 million for the Clean Energy Development Fund.

While the Legislature allocated the LIHEAP dollars from other revenue sources, the Clean Energy Development Fund was pared down.

Clean Energy Development Fund

The Vermont General Assembly created the Clean Energy Development Fund in 2005 to promote and develop cost-effective renewable energy projects.

The fund’s strategic plan for funding renewable energy projects calls for at least $5 million in the tank. This year, the fund will receive $1.3 million from the general fund, less than half of the $3 million allocated by the Legislature last year.

Funds from the Vermont Yankee Nuclear Plant are running dry, too. Agreements with the plant expired last year, and with them went the roughly $6 million annual payment to the fund.

A new generation tax on the plant was estimated to raise $12.5 million annually for the state, but Vermont Yankee’s parent company, Entergy Corp., is suing the state in federal court over the matter. A judge dismissed the case and Entergy appealed.

With that money in limbo, lawmakers are looking for a consistent funding source.

“This industry (subsidy), as with thermal efficiency, has always been at the mercy of stops and starts,” Klein said. “To get money to gear up and move forward and then have it dry up is not helping.”

Klein said the fund is needed, touting its ability to jump-start small renewable projects.

“The clean energy development fund has often been the key link that has gotten important projects, like farm methane projects, over the hump,” he said. “What we’ve learned with the farm methane projects is that it just didn’t allow them to produce electricity, and better manage manure, but they also realized they can generate immense amounts of heat.”

Although some of the industries the fund props up are maturing, Recchia said there is still a place for these programs into the foreseeable future.

“Maybe it’s time to let solar folks be on their own, but then we’d focus on something else,” he said. “I see the need for the funds at roughly $5 million a year, although the program will change as markets mature and systems mature so that they become cost-effective on their own.”

Vermont’s comprehensive energy plan sets a goal of drawing 90 percent of the state’s total energy from renewable sources by 2050. Recchia said that a consistently financed Clean Energy Development Fund would be necessary until the state approaches that target.

Siting and wind policy

Senate Bill 30 might have screamed into the legislative session, but it left with barely a peep.

Earlier this session, a majority of senators took a bill that first called for a three-year moratorium on large-scale wind developments and stripped it down to $75,000 worth of studies. When it arrived in the Vermont House, the Natural Resources and Energy Committee brought the bill to the chopping block, and it emerged even slimmer yet.

The revised bill, which both bodies agreed to, calls for six meetings of the House and Senate Natural Resources Committee during the legislative off-season to address the report and recommendations of the Vermont Energy Generation Siting Policy Commission. The commission, which issued its final report at the end of the session, recommended revising the state energy permitting process to make it more transparent and inclusive.

Shumlin formed the five-person siting commission in early October to assess how the state permits large energy generation projects. The order to explore reform came amidst vocal opposition to the siting of wind developments on Vermont ridgelines and outcry surrounding the Public Service Board permitting process, which is viewed by many lawmakers and residents as unfriendly to public participation.

During the legislative session, other attempts to more stringently regulate wind development or alter the siting process failed. A $75,000 allocation to assess the potential economic, health and environmental effects of wind turbines prevailed through the budget bill.

Klein said that over the offseason, he hopes his committee and the Senate committee can come to a consensus on how to approach the issue of energy generation siting.

“If we’re not able to do that we really haven’t gotten anywhere,” he said. “We’re only going to meet six times, so we’re going to have to focus.”

Klein said he wants to decide the questions of whether or how to alter the permitting process for energy generators once and for all this next session.

“I think we have to come to a conclusion or an end point with this stuff,” he said.

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