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New energy bill on the horizon in Montpelier

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July 19, 2007

By JOHN FLOWERS

MONTPELIER — Vermont House and Senate leaders this week vowed to hit the ground running in January with a new energy bill that could be even more comprehensive than the one vetoed by Gov. James Douglas.

The Vermont House on July 11 narrowly sustained Douglas’s veto of H.520, an energy bill that would have, among other things:

• Expanded the state’s electric efficiency utility (Efficiency Vermont) to an “all fuels” utility. Efficiency Vermont is currently limited to helping Vermonters improve their homes and businesses in ways to save on electricity, not on fossil fuels.

H.520 called for the Efficiency Vermont’s expanded services to be paid through a four-year tax on Vermont Yankee that would’ve raised roughly $25 million. Douglas was among those who did not support the Vermont Yankee tax, figuring that it would simply be passed on to consumers.

• Encouraged development of more renewable energy projects on Vermont farms.

• Expanded opportunities for “net metering” projects in the state, a process through which small renewable energy projects can sell surplus electricity to the state’s “grid.”

• Encouraged a simplified permitting process for environmentally sound small community hydro projects.

• Set goals for increased use of biofuels.

When the House sustained Douglas’s veto, the Senate drafted and passed bill S.209 — a measure that took out the Vermont Yankee tax. The House chose not to suspend rules (requiring a bill be read three times before a vote) and act on S.209 on July 11, though some lawmakers vowed to make it the foundation of a substantial energy bill they vowed to push next year.

“What I’d like to do is pass it early on in the session,” said Sen. Claire Ayer, D-Weybridge. “I don’t see us having a bill that is less aggressive. If anything, it will be more aggressive.”

House Speaker Gaye Symington, D-Jericho, agreed. She said lawmakers will likely expand the scope of S.209 with other environmental initiatives that will be developed this fall by several study groups, including Douglas’s own “Vermont Commission on Climate Change.”

“I think you will see (an initiative) that goes further than we did (in 2007),” Symington said. “Unfortunately, we will be a year later and one year further behind.”

And Symington said Vermonters should not underestimate the Legislature’s resolve to pass an energy bill. She and other Democratic lawmakers rejected the opinion of some colleagues who believe H.520 does not tackle the real problems facing Vermonters: Surging property taxes, inadequate health care insurance and rising fuel costs.

“I think of it as a job development bill, about saving Vermonters money on their heating bills,” Symington said.

Sen. Mark MacDonald, D-Williamstown, illustrated that perspective with some statistics. He noted that as of January 2007, Vermonters’ heating oil expenses had increased by 114 percent compared with four years ago — a rate that has outpaced other major financial outlays for Vermont households. During that same four years, MacDonald said gasoline costs went up 70 percent; health care costs rose 35 percent; and the school education tax on a home and two acres escalated by an average of 11 percent.

With those statistics in mind, MacDonald — vice chairman of the Senate Natural Resources and Energy Committee and chairman of the state’s Joint Energy Committee — said the state missed a big opportunity in not establishing an all-fuels energy efficiency utility through H.520 to assist Vermonters in taking steps to lower their heating oil consumption. Instead, the status quo is being maintained and most of the oil money is leaving the Green Mountain State.

“Our economy can’t afford to sit in neutral and see money flow out,” MacDonald said.

He voiced his frustration with Douglas’s veto of H.520, a measure he said could have built on a recent trend of good energy policies in the state — including Efficiency Vermont and an advantageous contract with HydroQuebec. That contract is due to expire after 2012.

“The governor inherited an energy policy that was the envy of New England,” MacDonald said. “I don’t think the Legislature wants to see that inheritance frittered away.”

Sen. Peter Shumlin, D-Putney and Senate Pro Tem, took the criticism a step further.

“I believe Jim Douglas is out of touch with the values of most Vermonters when it comes to climate change and reducing our addiction to foreign oil,” Shumlin said.

Like Symington, Shumlin believes the Legislature “will pass an even more comprehensive bill next year,” again forcing the governor’s hand on a sweeping energy policy initiative.

“If we act with boldness and imagination, we can make the future brighter and create jobs in the process — and that’s what Jim Douglas doesn’t seem to get,” Shumlin said. “For the governor to acknowledge Vermonters’ struggles with affordability and then veto a bill that would’ve saved them money, created jobs and reduced our addiction to foreign oil, is puzzling.”

The new jobs, Shumlin said, would be created in “climate change-related technology,” with Vermont emerging as a logical locale for that industry. The concept is not unlike the “Green Valley Initiative,” a proposal by Republican Lt. Gov. Brian Dubie to make the state a destination point for firms specializing in environmental technology.

Shumlin added Vermont needs to pass an energy bill to preserve the industries it already has. He referenced testimony delivered at hearings held last session on H.520, indicating that Vermont could, before the close of this century, see consistently warmer temperatures that could significantly impact the state’s maple sugaring and skiing industries.

“Our lives will changes in extraordinary ways” if nothing is done, according to Shumlin.

He rejected the notion that Vermont and its tiny population would have little or no impact in the international problem of global warming.

“When Vermont has led, others have followed,” Shumlin said.

‘PRISM OF AFFORDABILITY’

Douglas spokesman Jason Gibbs said the governor is in favor of the state passing an energy bill, but stressed he will evaluate any initiatives “through a prism of affordability.

“Energy and environmental policy are important to the governor,” Gibbs said. “But our economic security, creating good paying jobs and reducing the cost of living in Vermont are much more important.”

Gibbs said that Douglas supports the notion of investing in environmental incentives and technology. But he believes that the state’s economy must grow in order to make those investments affordable.

“The governor wants to make sure these environmental policies are working, together with our economic development policies and job creation policies,” Gibbs said.

Douglas continues to be willing to discuss an energy efficiency initiative “within existing state revenues,” but remains opposed to the notion of funding it with a tax on Vermont Yankee.

“The governor has said repeatedly that increasing the tax burden in Vermont, or applying a punitive tax on one company, threatens our economic prosperity,” Gibbs said.

While Douglas vetoed H.520, Gibbs said the governor “chose to implement administratively a majority” of the bill.

“He is optimistic that if the Legislature truly wants to reach an agreement on a comprehensive energy bill during the next session, we can get there,” Gibbs said. “We are looking forward to some talks between now and January that we hope can be effective.”

Those discussions are not likely to include taxes on Vermont Yankee, gasoline or heating fuel, according to Douglas administration officials. Gibbs said that while Douglas wants to encourage energy efficiency, he “doesn’t want to rob Peter to pay Paul.”

As for S.209, Douglas was not keen on the measure because it failed to fund an energy efficiency program using existing state revenues; did not allow the Vermont Public Service Board to conduct an “unfettered” analysis on home heating fuel efficiency; and did not include what Gibbs called a “modest appropriation” within the current state budget to implement the governor’s plan to beef up the state’s weatherization program on an interim basis.

Ayer, the Senate majority whip, was candid in her frustration that Douglas had not urged House Republicans to support suspending the rules to consider S.209.

“If the governor were serious about global warming and creating jobs for Vermonters, he would have had his team at least consider (the bill),” Ayer said.

Rep. Betty Nuovo, D-Middlebury, is a member of the House Natural Resources Committee. She expects her panel will again delve into an energy bill come January. To do less, she said, would be to ignore the increasing number of Vermonters who can’t afford to make their homes more energy efficient and do not qualify for weatherization assistance.

“We need to make sure everyone has the opportunity to be energy efficient,” said Nuovo.

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