Op – Ed by Lisa Ventriss, President of Vermont Business Roundtable
As the debate over Vermont’s energy future moves ahead, it is imperative that the public debate – and the resulting decisions – be based on a full analysis of the most current information available. The recent paper issued by Vermont Public Interest Research Group (VPIRG) sets out an ambitious vision, but fails that most basic of tests and threatens to create unrealistic expectations and promises. VPIRG would like Vermonters to believe that Vermont Yankee power can be replaced with renewable energy at a lower price, but while this may sound appealing, it is simply not true.
Most significantly, VPIRG’s estimates of the cost of renewable energy are not supportable. For example, VPIRG indicates that Vermont Yankee could be replaced with renewable energy costing 7.3 cents per kWh. Market prices for renewable energy projects are significantly above 7.3 cents per kWh, even when looking at the least expensive, large-scale renewable projects. VPIRG, along with multiple other organizations across the state and the legislature, recognized that most new renewable energy sources cost more than market power when it supported the standard offer passed during this legislative session, which sets rates for smaller renewable resources that range from 12 to 30 cents per kWh.
VPIRG also claims investing in renewable resources will result in electricity “delivered at 1-3 cents per kWh because they have no fuel costs.” While it is true that renewable projects can be priced stably over the long term because the fuel is free, renewable energy technologies are very costly to build – in fact, up-front capital accounts for the bulk of the cost of most renewable projects. These large capital costs need to be accounted for when comparing costs of Vermont Yankee and alternatives. The all-in price of most renewable resources will, in fact, be much closer to 10 cents per kWh or higher.
Because Entergy and the utilities have not reached agreement on future pricing of Vermont Yankee power, it is impossible for VPIRG to estimate what may be future VY prices. And, it is academic, because an accurate analysis of renewable energy costs shows that renewables are more expensive than even the highest estimates of what Vermont Yankee might cost. VPIRG’s conclusions about replacing Vermont Yankee with renewables are just not based on facts but are, frankly, simply wrong.
To be clear, every frugal Vermonter understands that cost-effective energy efficiency programs should be the first response in our attempts to keep electric costs down, and pretty much everyone wants to see more renewable energy in Vermont’s mix. But it will take time to build new renewable generation in the state. Keeping Vermont Yankee running can offer a cost-effective, low-carbon power source while renewables are built, assuming Entergy offers utilities value in a new contract.
The Roundtable supports a diverse electric energy supply that is clean, reliable and competitively priced;and this includes renewables as well as nuclear sources. Today, thanks to clean energy development, namely, Hydro-Quebec and Vermont Yankee, Vermont boasts arguably the most carbon-free power portfolio in the country, and with rates that are the envy of the region. In recent years, our electric rates have become the lowest in the Northeast, while our power production produces a fraction of the greenhouse gases of other states. At the end of the day, it is important that the state’s decisions about future electricity supplies be based on an informed, accurate and complete analysis that takes into account the real costs and characteristics of power available to the state. Vermonters deserve nothing less than that.