Vt. House passes new version of last year's energy bill 

The Vermont House on Wednesday passed by a massive margin a new version of the energy bill shot down last year by Gov. James Douglas’ veto.

But the Murphy’s Law of legislating remained in place: If lawmakers make compromises to gain support on one side, they risk loosing the bill on the other.

So while the House version of the bill offered the Douglas administration some compromises compared to last year’s measure, it may run into trouble when it heads back to the Senate, where those compromises might not be popular. And some renewable energy advocates were lukewarm in their support of the House version, at best.

The bill, which passed the Senate in the final moments of the 2007 session, was changed somewhat in the Houe before gaining initial approval in that chamber Wednesday on a roll call vote of 136-2.

“It is not often you see such an overwhelming vote in the House on an issue of such complexity,” Rep. Robert Dostis, D-Waterbury, who shepherded the bill through his Natural Resources and Energy Committee. Dostis also presented the bill to the House, which passed the measure with almost no debate.

The bill begins to establish a new heating fuels efficiency program but does not levy a new tax to pay for it. The bill also establishes a set tax rate for wind power projects.”It says to those businesses that want to invest in renewable energy projects in the state, ‘We are open for business,'” Dostis said.

President Pro Tem Peter Shumlin, D-Windham, said he is troubled by some aspects of the House bill and will seek to amend it.

“They have done good work on this bill,” Shumlin said. But “we can’t take baby steps and accomplish the goal of saving Vermonters money when they are trying to pay their heating bills.”

The minimum tax established for wind power projects is too high, Shumlin said. And the structure established for the new heating fuels efficiency program does not do enough to simplify how Vermonters will gain access to those services, Shumlin said.

If the bill gains final approval today from the House it will go back to the Senate, where it may be looked at by the Finance Committee, Shumlin said. In the end, a conference committee of members from both chambers will likely be convened to iron out the differences in the two versions.

The version of the bill which was vetoed last year would have imposed a tax on the Vermont Yankee nuclear plant to pay for efficiency programs to weatherize and take other measures to reduce how much heating oil, propane and other fuels Vermonters use. A proposal earlier this year would have added to the tax on heating fuels to pay for those programs.

Instead, lawmakers in the House decided to use other sources of money, including forward capacity payments for installing electricity generation, and payments under the Regional Greenhouse Gas Initiative to fund the programs, a least at first. Between $3 million and $4 million is expected to be available in 2009 for those programs.

The bill also reauthorized the gross receipts tax on heating oil to pay for weatherization for the poor Because of increased fuel costs there will be as much as $5 million a year for that program by 2009.

One criticism of the bill has been that it does not automatically make Efficiency Vermont – the “efficiency utility” that offers electricity saving programs – the organization that does heating fuels work, as well.

But the bill does allow Efficiency Vermont to do such work, makes the program more transparent, and requires a request for proposals, which the efficiency utility could and likely will bid on, Dostis said.

“It’s a good bill. We are pleased with the outcome,” said Richard Smith, deputy commissioner of the Department of Public Service, part of the Douglas administration.

“It is a good effort on the part of the Administration and the Legislature to find common ground,” Douglas said. “We shared a goal, we shared an objective and we worked hard to achieve it.”

Matt Cota, head of the Vermont Fuel Dealers Association, also likes the bill.

“I think this bill is the work of a great compromise between Chairman Dostis, the Governor and the stakeholders, including the fuel dealers,” he said.

Two Republican House members, Rep. Rick Hube of Londonderry and Rep. Harvey “Bud” Otterman of Topsham, voted against the bill. That was because of the wind power tax provision, Hube said.

“We are subsidizing the wind companies that are making a fortune on these things,” he said. “Effectively all other taxpayers are going to be subsidizing them through their property taxes.”

But advocates of wind power development said the bill, in fact, doesn’t go far enough to encourage such alternative energy.

The problem, they said, is the establishment of a minimum tax on wind projects based on their top potential capacity, whether they are running or not. If the turbines were running, the tax would be based on actual production.

That could especially be a problem for small and mid-sized projects of one or two turbines, such as might be put up by a town or village, said James Moore of the Vermont Public Interest Research Group.

“For that community, it could effectively triple their tax” if the turbines were not operating, Moore said.

The bill does not move far enough fast enough on implementing the new efficiency programs either, and gives too much say to the administration in how they are structured, Moore said.

More importantly, however, is the realization in the Statehouse that Vermonters want such a program, Moore said.

“Republicans, Democrats and Progressives all recognize that Vermonters want renewable energy and want help reducing their heating bills” he said.

But Andrew Perchlik of Renewable Energy Vermont said the bill will help.

“This bill is an economic stimulus package for much of the renewable energy industry in Vermont,” he said. “The bill will save Vermonters money on their energy bills while it puts out the welcome mat for wind farms and other renewable energy.”

By Louis Porter
Vermont Press Bureau

Times Argus

14 February 2008