COMMENTS OF GLEBE MOUNTAIN GROUP, INC.
ON EEU BUDGET RECOMMENDATIONS
THE GLEBE MOUNTAIN GROUP, INC.
The Glebe Mountain Group, Inc. (GMG) is a voluntary association of residents and
property owners in the Glebe Mountain (Londonderry/Windham) region of Vermont . The
Glebe Mountain Group is dedicated to preserving fragile high-elevation habitat and ridge lines in
Vermont, and to protecting these areas from industrial development. Consistent with this
mission, GMG seeks to assure the orderly and sensible development of energy resources in
Vermont.
These comments are filed at this time because, until the Department of Public Service
(DPS) made its filing on May 17, GMG assumed DPS would recommend that EEU Budget
should be increased at least three fold, a result fully supported by its own studies. Only when
DPS recommended a meager fraction of what its well-reasoned study proved was appropriate did
GMG believe it was necessary to add its comments to the current proceeding. We respectfully
request that these comments, admittedly filed after the time prescribed for such comments, be
considered by the Board in making this all important decision.
ENERGY EFFICIENCY IS COST EFFECTIVE
As noted above, GMG has a substantial interest in the sound development of energy
resources for Vermont. It shares the goal, as articulated in 30 V.S.A. §248(b)(2), that an energy
project should be approved only if it is proven that the proposed project:
is required to meet the need for present and future demand for service which
could not otherwise be provided in a more cost effective manner through energy
conservation programs and measures and energy-efficiency and load management
measures, including but not limited to those developed pursuant to the provisions
of sections 209(d), 218c, and 218(b) of this title
1
It is well-established that the most effective and economical way for Vermont to meet its energy
demand is to conserve energy. DPS has calculated that the cost of implementing Demand Side
Management (DSM) had, through 1997, resulted in annually conserving almost 250,000 MWh at
a cost of 2.4 cents a per kWh. VT Electric Utility DSM Accomplishments: History and Current
Trends at 2. DPS concluded there was considerably more DSM that could be achieved. Id. pp.2
and 6. Efficiency Vermont reported in 2004 that through its efforts in 2004, 58,000,00 kWh of
electricity was saved, at 37 percent of the cost that would have had to be paid to purchase that
much electricity resulting in a 500,000 ton reduction in greenhouse gases and that these benefits
would continue for an average of 14 years. EVT 2004 Preliminary Report. When energy is
saved, the Vermont consumer is able to use the money that would otherwise be spent for
electricity for purchases of goods and services in Vermont, thus adding benefits to the Vermont
economy. For the period 2000-2004 these benefits of energy efficiency as opposed to paying for
electric use produced an estimated $83 million in net lifetime economic value to Vermont. Id.
p.8. In addition, efficiency, as opposed to generation, lowers peak load and is more reliable than
supply solutions. Id. p.10. An investment in energy efficiency produces a better rate of return
than any investment in energy generation. Id. p.12.
If the EEU budget is tripled, the energy savings that will be achieved will obviate the
need to build 200 MW of new capacity over the next 10 years and reduce overall demand by 19
percent. The reduced demand will translate into direct savings on the electric bills of Vermont
consumers. The new capacity, if built, will cost considerably more per MW than will the energy
efficiency measures that DPS has identified in its most recent analysis. For example, there are
numerous proposals to construct wind turbines on high ridge lines in Vermont over the next ten
2
years, including a proposal, now on hold, to put nineteen such turbines on the Glebe Mountain
ridge line. The Glebe Mountain project, like other proposed generation projects, relies upon an
anticipated growth in energy demand over the next ten years, a growth that need not occur if
energy efficiency is economically implemented as we propose.
An analysis of the Glebe Mountain proposal underscores its economic weaknesses when
compared to energy efficiency. The Glebe Mountain project would have a maximum potential
capacity of 47.5 MW and cost a reported $80 million. Because of the intermittent and
unpredictable supply of power from wind turbines, construction of this project will not obviate
the need to build either base load or peaking capacity. Moreover, on an annual basis the capacity
factor of such a project, even if the unique problems associated with reliability of wind turbines
in the harsh New England high altitude climate are ignored, is unlikely to exceed 27 percent
based on the national average for wind turbines. See Attached Exhibit prepared by Thomas
Hewson of Energy Ventures Analysis, Inc.
In addition, the power produced by wind turbine projects is much more expensive than
conserving electricity. Even if the electricity generated by wind turbines is sold at 5 percent
below the spot market price for electricity -- a price that appears to be common among wind
turbine developers in Vermont -- that cost, at today’s prices and at the prices expected in the
future will be at least 3.5 cents a KWh and more likely in excess of 4 cents a KWh. Also,
Vermonters as taxpayers pay a subsidy of 2 cents a KWh for wind turbine electricity and, when
the green tags from such projects are sold on the open market to utilities in Massachusetts to
allow them to meet renewable energy obligations, an additional 3-4 cents a KWh is added to the
cost.
3
Energy efficiency, on the other hand, not only costs less but has a 100 percent capacity
factor - i.e. once the energy efficiency measures are taken they save energy every day, all the
time into the indefinite future and at a price well-below alternative energy options. As the
comments of CLF and VPIRG demonstrate energy efficiency measures that could be
accomplished by a tripling of the EEU budget will actually lower the cost of electricity to
Vermont ratepayers when all costs and benefits are properly calculated.
Thus, it would appear that approving the cost-effective tripling of the EEU budget should
be readily embraced by all Vermonters and the Board. Nonetheless, substantial criticism has
been raised because the additional EEU budget will end up adding to the per KW cost of
electricity, even though the average bill will be less. The comments from the Ethan Allen
Institute are typical of these arguments. They assert “I have never been able to ascertain any
coherent rationale for taxing all ratepayers to provide services to some ratepayers, when the costsaving results of those services ought to justify the ratepayer's own investment.” This argument
reflects a profound misunderstanding of the difference between the market for electricity and the
market for more typical goods and services.
The following example illustrates this fundamental misunderstanding. It does make
sense that if my neighbor wants to buy an extra end table to go with her living room set, I should
not pay for any of the cost of that end table, even if buying the extra end table will allow her to
get a better per table cost, since I cannot benefit from that cost saving. However, when my
neighbor uses more electricity than she needs, her excess use causes the utility to have to build
new capacity to meet that need. The cost of that excess capacity, becomes a cost that all
ratepayers must share. If need for excess capacity can be met by helping my neighbor reduce her
4
energy consumption at a price that is less than I would have to pay for the increased capacity, it
makes economic sense for me to do so. In short, it actually pays, economically, to be a good
neighbor and pay a portion of the cost to have your neighbors use electricity more efficiently.
ENERGY EFFICIENCY IS GOOD FOR THE ENVIRONMENT
Vermont in general and GMG in particular are deeply concerned about protecting
Vermont’s natural environment. The natural environment includes Vermont’s scenic beauty,
like its high ridgelines and also includes the air we breathe and the climate we enjoy. Energy
efficiency is the best way to protect Vermont’s natural environment from the unavoidable
adverse consequences of electricity production. All forms of electricity production create
substantial adverse environmental impacts. Wind turbines destroy the scenic beauty and fragile
natural habitat of Vermont’s ridgelines. Fossil fuel plants add pollutants to the air and increase
greenhouse gases. Nuclear plants create safety risks and pose as yet unresolved nuclear waste
disposal problems. Hydroelectric projects create substantial disturbances to the river
environment. Energy efficiency avoids all of these problems. Every MWh of energy saved
eliminates an adverse environmental impact created by generating electricity.
Some energy production facilities do generate less pollution than others. However,
because of the national cap and trade system for air pollutant discharges and because of the
active market for green tags generated by renewable energy resources, even these more benign
projects do far less than imagined. When a utility acquires power from a wind turbine it gets a
pollution control credit. If, as is the case with utilities in New England, the utility is already in
compliance with national pollutant discharge requirements, it can sell its credit to other utilities
who are not in compliance. Those other utilities then use the credit to meet their discharge
5
obligations without actually reducing their pollution discharges. In short, even using
renewable energy to generate electricity does not provide the level of environmental benefit that
will be provided by energy efficiency.
CONCLUSION
GMG urges the Board to follow the clear mandate of existing law to maximize the
economically justifiable energy efficiency budget and approve a tripling of the current budget.
Thank you for your consideration of these comments.
GLEBE MOUNTAIN GROUP
PO Box 2087
South Londonderry, VT 05155
802 824 4493
By:________________________
Anthony Z. Roisman
NATIONAL LEGAL SCHOLARS LAW FIRM
84 East Thetford Road
Lyme, NH 03768
603-795-4245
One of its Attorneys
cc:
Copies of these comments were served by e-mail on the service list
6