October 24, 2006
Susan Hudson, Clerk
Vermont Public Service Board
120 State St.
Montpelier, VT 05620
RE: EEU Participation in the Forward Capacity Market
Dear Ms. Hudson:
Conservation Law Foundation (CLF) and Vermont Public Interest Research Group
(VPIRG) offer the following comments on the EEU participation in the Forward Capacity
Market.
Vermont’s efficiency programs should participate in the region’s forward capacity
market. This market allows for efficiency measures to respond to and meet the region’s
capacity needs and to be paid a capacity payment for their participation. It is one of the
few silver linings in the regional energy picture that otherwise looks fairly grim. It is the
first time that regionally, energy efficiency will be allowed to participate on equal footing
with generation for meeting the region’s capacity needs. As energy efficiency continues
to be the lowest cost and cleanest energy resource, all efforts that will allow this resource
to meet a greater portion of our region’s growing demand should be undertaken.
In light of this, the comments provided by others on the EEU participation in the Forward
Capacity Market (FCM) are very disappointing and fly in the face of the Board’s recent
order increasing the EEU budget.
1. The Board should contract with VEIC for Vermont’s efficiency programs to
participate in the FCM.
VEIC is a NEPOOL participant and has been actively participating in the working
groups developing the rules for the FCM. They have the expertise and the
capacity as a NEPOOL participant to undertake these tasks. Fracturing this effort
and having the programs participate as a portion of each of the other utilities
participation or through some new entity is redundant at best and certainly
inefficient and ineffective.
2. Funds collected should be used to fund further efficiency measures.
In the Board’s recent order increasing the energy efficiency budget, the Board
recognized that an even higher level of funding is justified and would still acquire
available and cost effective energy efficiency measures. The Board declined to
order a higher increase until it reviewed the possibility for other funding
mechanisms, such as amortization, that would reduce the rate impact.
Capacity payments received from participation in the FCM are a funding source
with no rate impact. They should offset any limited administrative costs for
participation, and then be used to fund additional efficiency measures. These
funds are paid for efficiency and should be used to continue and expand
efficiency efforts. This keeps these funds working to meet growing demand with
low cost efficiency, reduce pollution and greenhouse gas emissions and keep
Vermont’s energy costs as low as possible. It is simply incomprehensible that the
Board, the Department or any of Vermont’s utilities would consider that these
funds should be used for any purpose other than to acquire more efficiency
resources.
Thank you for consideration of these comments.
Sincerely,
Sandra Levine
Conservation Law Foundation
James Moore
Vermont Public Interest Research Group