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Energizing Prosperity in Vermont

This document, prepared by Campaign for Vermont, explains how the State of Vermont's aggressive effort to force utilities to buy very high cost electricity from solar, wind and small hydro dam developers, is driving up electric rates. The authors argue this ia a "misguided energy and economic policy." The executive summary of the report is provided below. The full report can be accessed by clicking on one of the links at the bottom of the page.

Executive Summary

Clean, affordable, safe, and reliable energy, especially electricity, is a cornerstone to affordable living, a diversified, dynamic, competitive economy, and a low carbon footprint. Yet despite the State of Vermont's professed desire to provide low cost, low carbon energy, our citizens and businesses pay among the highest electric rates in the country and New England while remaining highly dependent upon carbon-emitting fossil fuels for transportation and home heating.

Campaign for Vermont believes a thoughtful blend of positive economic and environmental goals, not politics, ideology or cronyism, should drive Vermont's energy policy. Competitive electricity prices are vital to any renewal of manufacturing and other job sectors dependent on low cost reliable energy. Competitive electricity prices matter to every business operating on a razor-thin profit margin. While "green" energy jobs are valued, they are not as important as jobs created and sustained more broadly in an economy supported by overall low energy costs. Lower electricity costs also promote affordable living for all consumers, most especially for lower-income Vermonters for whom unnecessarily high residential rates are tantamount to a regressive tax on a basic necessity.

Campaign for Vermont believes, therefore, that clean, competitively priced energy, especially electricity, is a social good. At present, the State of Vermont aggressively forces utilities to buy very high cost electricity from solar, wind and small hydro dam developers, thus unnecessarily driving up electric rates. This is a misguided energy and economic policy in response to legitimate concerns about climate change. While recognizing that Vermont has an enviable carbon footprint, Vermont can best address further reductions in carbon while promoting economic prosperity with policies that encourage competitively priced electricity.

Vermont's current approach pushes electric rates artificially high, thus discouraging cost-conscious consumers from switching from fossil based fuels to electricity for transportation and heating. A grassroots shift away from fossil fuels to other forms of power requires underlying economic costs to be competitive. The state's political leadership and the Vermont Department of Public Service (DPS) have failed to give consumers the competitive tools for change, so our citizens remain overly dependent on high-cost, high-polluting fossil-fuels.

When it comes to competitively priced electricity, Vermont is way out of step and heading in the wrong direction relative to our national and regional competitors.

Vermont Electric Rate Rankings - U.S. Contiguous States
June 2012

Residential 17.02 cents/kWh 2nd Highest
Commercial 14.35 cents/kWh 4th Highest
Industrial 10.18 cents/kWh 7th Highest

In fact, since 2008, Vermont's residential, commercial and industrial electric rates have increased by 17.5%, 14.9% and 10.8% respectively while comparable rates in New England have dropped by 11.1%, 11.9% and 8.3%. Relative to national averages, Vermont's rates are an eye popping 40% higher.

Reducing energy costs is not a pipe dream. In nearby Massachusetts, many ratepayers have seen double-digit slashing of their power bills within the last year. The infinitesimal rate decrease proposed recently by Green Mountain Power Corporation (GMP) is not enough. Campaign for Vermont believes Vermont can significantly reduce all-fuels energy costs and our carbon footprint over the next decade by providing consumers access to cheaper and cleaner alternatives to oil.

State government and the Vermont Public Service Board (PSB) can act to lower electricity rates and encourage the construction of vital energy infrastructure that places the power of choice back in the hands of consumers. Informed Vermonters will be empowered to lead the way to a cleaner, more prosperous future, if given the opportunity.

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OCT 5 2012
http://www.windaction.org/posts/35110-energizing-prosperity-in-vermont
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