Administration report says subsidies distort economy, favor wealthy, support purchase of power not in demand by consumers

November 14, 2019 – by Guy Page – Gov. Phil Scott supports cutting price supports for solar power, he said at a press conference today.

Vermont has the fifth-highest residential electricity rates in the U.S., due in part to an increasing market-share of solar power, which by state law utilities must buy at a fixed price, usually between 14-18 cents per kilowatt-hour. The “market rate” for electricity in New England is about 3-5 cents/kilowatt-hour.

“There comes a time you have to wean yourself off. When you’re paying out more than you are receiving. It’s not a good market approach,” Gov. Scott said. “It was a great incentive to jumpstart the renewable sector.”

Emphasis on was. A Nov. 1 proposal by his administration’s Department of Public Service would in effect reduce consumer cost of ‘net-metered’ price-supported solar power, which the report says now:

Benefits the wealthy: “A household in a high earning town is more likely to have a solar system than a household in a low earning town.”  Price supports “shift” about 9.2 cents per kilowatt-hour of solar power production to non-solar power producers. The Nov. 1 plan would return that money to non-producers through credits to monthly power bills over the next 10 years.

Hurts the economy: Net-metering provides jobs [est. 6,000] “but does so in a way that results in economic distortion….there is less disposable income and therefore less economic activity across Vermont.”

Offers less value to consumers than cheaper (3-6 cent) unsubsidized power (hydro, nuclear, gas) because consumer demand for solar is low when its output is high: “Over the last five years, the energy value of the solar output was worth approximately 8% less than the average wholesale energy price.”

It remains to be seen if the Legislature, which gave birth to net-metering in 2011, believes the industry is ready to be weaned.

In other energy news:

• VT Digger reported yesterday that “the Climate Solutions Caucus [of the Vermont Legislature] will introduce a bill next session to require utilities to procure 100% of their electricity from renewable sources, with a greater share coming from in-state generation.” The caucus wants to boost in-state renewable electricity generation (wind, solar) over purchases of out-of-state renewable energy credits, Quebec hydro-power, and New England off-shore wind, nuclear, and fossil-fuel power.

• Burlington residents will pay six percent less for energy efficiency in 2020, as a result of a Nov. 11 Vermont Public Utilities Commission ruling. Like other utilities, Burlington Electric Department pays for its energy efficiency program through a charge in its monthly power bills. The charge for non-residential customers (including businesses) will increase slightly.

• The Vermont Public Interest Group wants Vermont snowmobilers to ‘go electric.’ In a Nov. 12 tweet, VPIRG said “Gas-powered snowmobiles are a blast, but they’re up to 50x more polluting than an average car. Taiga Motors’ flagship electric model reaches speeds of 60mph in under 3 seconds while significantly reducing the noise associated with conventional snowmobiles.” The cheapest Taiga snow machines cost $15,000 (presumably in Canadian dollars), the website for the Montreal-based company says. By comparison, Minnesota-built Polaris gas-powered sleds start at $5400, with the top-of-line at about $15,000.