VEC board president: Northern Vermont economy is growing 

JAY – The northern Vermont economy is growing, based on demand for electricity, says Tom Bailey, president of the board of Vermont Electric Cooperative.

Bailey of Derby told hundreds of people at the co-op’s annual meeting at Jay Peak Resort Saturday morning that the signs are clear.

“The northern Vermont economy is turning the corner. We at VEC are seeing signs of economic growth,” Bailey said to begin the meeting in the resort’s new conference center.

“Sales to businesses are approaching pre-recession levels.”

But Dave Hallquist, CEO of the co-op, warned that if the Legislature insists on setting high renewable energy portfolio standards, electric rates would spike and hurt the economy and businesses like Jay Peak Resort.

Hallquist also said that VEC will continue its investment in efficiencies and high-tech improvements while Green Mountain Power merges with Central Vermont Public Service. That merger will consume those utilities for years, while VEC improves, he said. VEC members won’t want to sell the co-op to GMP if asked, he said.

VEC made it through a tough year of storms, including spring storms and Tropical Storm Irene, which caused $3.3 million in damages. But $2.2 million of that was covered by federal emergency grants because the co-op is a non-profit, so VEC won’t have to raise rates to cover unexpected expenses, Bailey said.

Rates to members in northern Vermont are expected to go up next year because of higher transmission costs that are beyond VEC control, treasurer John Ward Jr. said.

The board of directors has worked hard to emphasize efficiency and fiscal responsibility, and is launching a plan to return what’s called “patronage capital” in payments to members when there is extra revenue, Bailey said.

The gathering was the first large event in the resort’s conference room, said Bill Stenger, president and co-owner of Jay Peak Resort.

Stenger welcomed the members of the co-op to tour the resort, which is in the heart of the co-op’s territory, that depends on reliable electricity year round. The resort employs 1,000 people in the winter and is operating year-round now with the water park, arena and golf course, Stenger said.

VEC Elections

In elections to the board, members picked George Lague of Derby, who has been serving by appointment on the board for the eastern zone at large, to retain his seat on the board over challenger Rep. Sam Young of Glover.

Lague received 804 votes in the mail-in ballot to Young’s 584.

Also on the ballot were Skip Gosselin, receiving 328 votes to 89 for Bill Hafer, both of Newport City.

Voters also OK’d a power purchase agreement with NextEra Seabrook, a nuclear power plant in New Hampshire. That drew several complaints from members, who stood during a question and answer session to say that either they opposed nuclear power or wanted VEC to buy electricity from Vermont Yankee instead.

The VEC board last year voted not to accept an offer of a higher price from Yankee.

In other issues, voters approved a full slate of ballot articles that streamline board operations, including a requirement that a board vacancy be left open until the next election rather than having the remainder of the board fill that vacancy.

Hallquist broke down the current picture of the electricity industry, saying that he was glad that the renewable energy portfolio standard did not pass the Legislature.

He showed how such a requirement would have caused electric rates to climb, in some cases significantly, as the utility would seek to produce or buy more renewable energy.

An increase in the availability of electricity generated by natural gas has caused changes in the electricity markets, with even some coal plants shutting down, Hallquist said.

And he pointed out that a push by the state for more in-house wind and solar electricity sources for electricity could make the grid unstable, noting that Texas had experienced rolling blackouts because of a high use of intermittent sources like wind and solar.

Hallquist said he had questions about the future of large wind projects on ridgelines.

“You’d need 165 more wind towers the size of the ones in Lowell. I am not sure Vermonters want that,” he said.

Until there is environmentally safe electricity storage capability from batteries, wind and solar will remain intermittent, he said. And there isn’t enough woody biomass to make up the difference, he added.

The price alone should raise questions, he said. Solar now costs 31 cents with federal tax credits, while wind is 14 cents. Natural gas generates electricity now at 4.5 cents, he said.

He showed a chart that outlined the costs for an average homeowner:

– Electricity bill per month – $80

– Using more wind, biomass – $115

– Using solar but not wind – $155

Going to solar for renewable energy portfolio would double Jay Peak Resort’s electricity bill per month, Hallquist said.

The resort is already paying nearly $1 million per month, Stenger said.

That, Hallquist said, would hurt the economic future of Vermont.

Hallquist warned that the renewable portfolio standards argument will come up every year in the Legislature and urged members to raise their questions about it with their lawmakers.

“We want to be part of the discussion,” Hallquist said. “We’re the boots on the ground.”

He called for an energy panel of experts, including utilities, to research the energy situation and report to the Legislature every year.