Governor Scott vetoes major electricity bill and legislative leadership vows to reject it

Gov. Phil Scott vetoed what is widely considered the most important energy bill of the legislative session, saying he believed the policy was too costly for Vermonters.

The bill proposes an update to Vermont’s 2015 Renewable Energy Standard. This law determines how much electricity the state must purchase from renewable sources such as solar, wind and hydropower, but also biomass.

The bill would require most utilities, including Green Mountain Power, Vermont’s largest utility, to achieve 100% renewable energy by 2030. Smaller utilities and semiconductor maker GlobalFoundries would have until 2035 to achieve 100% renewable energy .

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Most controversial – and influential in terms of reducing climate-warming greenhouse gas emissions from the electricity sector – this policy would quadruple the amount of energy utilities must purchase from new renewable energy sources and double the amount of energy they must purchase from new renewables energy sources built in Vermont.

In his veto message to lawmakers, Scott expressed frustration that lawmakers had not adopted an alternative policy proposal put forward by his administration that would have transitioned all utilities in the state to 100% carbon-free energy by 2030. State-owned nuclear power much less of this energy came from new renewable energy sources.

He argued that H.289 would raise costs for Vermonters at a time when taxes are already going up. He also said his plan involved an 18-month process in which the Department of Public Service sought input from Vermonters on updating the state’s electricity policy.

“For the reasons stated above, and given all the other taxes, fees, and higher costs the Legislature has passed over the past two years, I simply cannot allow this bill to become law,” he wrote.

In his own statement, Senate pro tempore Phil Baruth said legislative leaders would try to override Scott’s veto during the June veto session and called Scott and Republicans an “automatic ‘no’ to any policy that moves the needle on fossil fuel addiction.” “”

Baruth pointed to the governor’s stated intention to veto two other important climate bills – the flood safety bill, the Climate Superfund bill and his veto of the Affordable Heating bill last session, also due to affordability concerns.

House Speaker Jill Krowinski said in a statement that Scott’s veto “undermines Vermont’s commitment to a sustainable future.”

What the bill would mean – and what it would cost

Under a bill introduced by lawmakers, much of the new domestic energy called for by the policy would likely come from new solar plants. The policy was developed this summer by a working group of environmental groups, utilities, renewable developers and lawmakers.

Legislative analysts with the Joint Fiscal Office estimate the bill will cost Vermonters between $150 million and $200 million by 2035, which the office says is the equivalent of adding between $4.50 and $13.50 to the average household’s monthly electric bill. in Vermont that same year.

Much of the cost would come from building new renewable energy sources that, located in places where there is adequate battery storage and demand for battery power during productive periods, reduce the amount of fossil natural gas burned to support the New England regional grid.

Modeling the impact of this policy on electricity rates has proven difficult because previous estimates based on numbers provided by the Scott administration showed costs to be much higher. During the session, the JFO issued six fiscal notes on the bill and has since withdrawn the initial cost estimate. The bureau maintains the lower figures, with the caveat that much uncertainty remains.

Further uncertainty about the costs of this policy stems from uncertainty over where the new renewable energy sources in the bill will be located on Vermont’s grid.

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Currently, location is largely market driven, which has led to areas of the state where the transmission and distribution infrastructure cannot handle new generation of renewable energy without costly upgrades to substations and other infrastructure.

If new renewable energy sources were located first in places where Vermont has the transmission capacity for them, much of the cost of the bill could be mitigated, but the state does not currently have a policy in place to direct them there.

And while the governor and lawmakers agree that Vermont should take steps to reduce its dependence on fossil fuels for its electricity sector, a position backed by science, there is deep disagreement over how to do it and at what cost.

In Vermont, transmission infrastructure is outdated and limited, and according to VELCO, the state’s grid operator, modernization will require hundreds of millions of dollars in the coming decades regardless of whether the bill becomes law.

The grid operator says three emerging interstate transmission projects could address many grid constraints that could potentially drive up the costs of the policy in the coming decades. If approved and gaining regional support, Vermont taxpayers would cover a nominal share of their construction costs, while other New England states would foot the lion’s share of the bill.

There is no agreement on how to decarbonize

Meanwhile, the Department of Public Utilities and others have argued that Vermont should do more to require renewable developers to first locate new projects in places where there is a need for more electricity and sufficient transmission capacity.

They argue that the most cost-effective way to transition away from fossil fuels is to build new energy where the infrastructure supports it, to prevent any major upgrades to substations and other infrastructure.

Critics of the bill, including many Republicans and the advocacy group Vermonters for a Clean Environment, say JFO’s cost estimates are too low because they do not adequately take into account the potential costs to electric ratepayers if all new renewable energy is built in places that require expensive network modernization.

The Department of Public Service and others have pointed out that, according to the Energy Information Administration, Vermont has on paper the cleanest electricity in the country, accounting for just 1% of our greenhouse gas emissions as a state – although that’s not true, and that doesn’t include the fossil gas that relies on Our network is based, being connected to the New England network.

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Republicans have raised concerns that Vermonters may be paying more than their fair share to reduce regional greenhouse gas emissions from the electricity sector.

But Vermont’s utilities, most environmental groups, renewable developers, progressives and most Democrats say the framework’s formulation is flawed because of the global nature of climate change, often citing the IPCC’s sixth report, which found Every ton of carbon released into the atmosphere contributes to the problem of global warming. They argue the state cannot wait, pointing to broad scientific consensus that the window to reduce greenhouse gas emissions to avoid the worst effects of climate change is shrinking. Many scientists argue that the economic costs of climate change are significantly underestimated.

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Renewable Energy Vermont, an industry group that lobbies on behalf of renewable developers in the state, and the environmental group VPIRG, which often advocates the use of local renewable energy as a climate solution, estimate the policy’s impact will be the same as withdrawing 250,000 cars from the road market by 2035

VPIRG, REV, the Vermont Natural Resources Council and 350Vermont called Scott’s veto “an appalling attempt to impede Vermont’s environmental and economic progress.”

They and other supporters of the bill argue that as Vermont pursues parallel policies to reduce emissions in the much more polluting heating and transportation sectors through electrification, the state needs the cleanest electricity possible to get the maximum reduction in emissions from costly sources energy. switch to new technologies.

However, the Department of Public Service, which is tasked with regulating electricity rates in the state, has warned that rising electricity costs too quickly could discourage people – especially those of moderate means – from purchasing new appliances such as an electric heat pump. or EV.

Walk or run?

At his weekly news conference Wednesday, Scott said he and lawmakers share many of the same priorities, including taking action on climate change — despite his vetoes of many major climate bills in recent years. Speaking about a range of policies, he said:

“I also believe that there is often a path to achieving our goals while limiting these consequences. However, to find the right balance, we need to take the time to achieve it; go before we run away; and, importantly, make sure that the people of Vermont can afford it,” he said.

During a demonstration on the steps of the Statehouse Thursday, students with the Vermont Youth Lobby pleaded with Scott to sign the bill — along with two other climate bills the governor is expected to veto in the coming weeks.

“Our governor has made it clear year after year that he will veto any climate bill,” said Jenna Hirschman, a Youth Lobby activist and intern at the environmental group 350Vermont.

She warned that young voters in the state – who will disproportionately shoulder the burden of global warming due to their age – support quick climate action.

For the bill to become law, two-thirds of lawmakers present in both the House and Senate would have to vote to reject the bill. The policy passed the Senate by an 18-8 majority in early May and the House by a 99-39 majority.

Lawmakers return to the Statehouse for a veto session in mid-June.

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