Setting the record straight on the FTC decision

Editor’s note: This commentary is by Patrick Parenteau, who is a professor of law and senior counsel at the Environmental and Natural Resources Law Clinic at
Vermont Law School. He is the author of the FTC petition.

“FTC Unilaterally Rejects Vermont Law School’s Claims.” That was the lead in the GMP press release released on Monday. Like so much of what GMP has said about its marketing of “renewable energy” in Vermont the statement is misleading and downright wrong in every material respect.

First, the FTC itself made no decision on the petition whatsoever. As the letter makes clear:

“This letter represents the views of the staff only and has not been approved by the Commission or by any individual Commissioner. The views provided in this letter are not binding on the Commission and are provided without prejudice to the right of the Commission to rescind the positions expressed herein and when appropriate, to commence an enforcement proceeding.”

Second, the FTC staff did not “reject” any of the claims made in the petition. The word “reject” does not appear anywhere in the letter. The FTC staff made it clear that it was not making any findings one way or another: “Although no findings have been made that these claims violate the law, we urge GMP in the future to prevent any confusion by clearly communicating the implications of its REC sales for Vermont consumers and REC purchasers.”

The FTC staff did not dispute a single one of the 13 specific allegations of misrepresentation set forth in the petition: “We have not prepared a claim by claim analysis of the statements identified in the petition.” The staff went on to state that some of GMP’s “unqualified claims raise concerns in light of the principles discussed here,” a reference to the FTC Green Guides that prohibit a utility from making claims that energy is renewable when RECs are sold.

GMP’s attempt to spin this as a law school frolic rather than address the merits of the petition brought by these knowledgeable and concerned Vermonters betrays a troubling lack of respect and professionalism from the state’s largest utility.
 
Third, the FTC staff did reject GMP’s breathtaking argument that because it has a monopoly on electricity sales in Vermont, it is not subject to FTC jurisdiction and its customers have no choice but to accept whatever it sells them. The letter states: “Finally, while Vermont consumers do not have a choice of electricity providers they can choose to use less electricity, generate their own electricity at their homes, or switch fuel types.” That language is taken virtually verbatim from our petition.

Fourth, Vermont Law School did not make any claims whatsoever in this proceeding. The petition was filed on behalf of four distinguished Vermonters: Bruce Post, former legislative aide to Sen. Bob Stafford, Rep. Jim Jeffords and Gov. Richard Snelling; Curt McCormack, who has served in the Vermont Legislature for 14 years and is the former chair of the Joint Energy and Natural Resources Committee; Charles Johnson, longtime state naturalist and author of the leading text on Vermont natural history; and Kevin Jones, professor of energy technology and policy at VLS and former director of power market policy for Long Island Power Authority and director of energy policy for the City of New York. GMP’s attempt to spin this as a law school frolic rather than address the merits of the petition brought by these knowledgeable and concerned Vermonters betrays a troubling lack of respect and professionalism from the state’s largest utility.

Fifth, GMP’s flip dismissal of what the FTC staff called “problematic claims” about its policy of selling RECs while claiming to provide green energy should give its customers real pause. The FTC staff made clear that this was a warning — just like when you get pulled over for speeding and get a warning instead of a ticket. The staff states:

“We urge GMP to review its current and future communications to ensure that Vermont customers, and other market participants, clearly understand that GMP sells RECs for many of its renewable facilities and thus has forfeited its right to characterize the power delivered from those facilities as renewable, in any way.” (Emphasis added) If we identify concerns in the future we reserve the right to take further action.”

Time will tell whether GMP got the message.

Finally, GMP still doesn’t seem to get what this is all about. This is not just about being more transparent and honest with its customers, though that would be a welcome change. Even more importantly, this is about whether GMP’s policy of selling RECs, which is perfectly legal under Vermont’s flawed SPEED program, is reducing Vermont’s carbon footprint. The truth is that it is not. As the FTC letter states when the RECs are sold what you have left is “null electricity” stripped of its environmental attributes. That means that the electricity coming from the New England grid is predominantly “brown power” consisting of coal, oil, natural gas and nuclear. Only by retiring the RECs from commercial wind and solar projects can GMP and the other energy providers in Vermont be said to be reducing Vermont’s carbon emission. To be sure this means that electricity rates will be higher though by how much is hard to predict. There is no free lunch. Either we want to reduce the carbon footprint of our electricity consumption or we don’t. But let’s at least be honest with ourselves. GMP has the opportunity to show real leadership on this. The FTC will be watching. And so will we.