(Host) The Douglas administration is seeking almost 22 million dollars in federal stimulus money to help develop small scale renewable energy projects around the state.

 

The administration says that's a better way to encourage the projects than a bill the Legislature approved this year.

 

VPR's Bob Kinzel reports.

(Kinzel) What's the best way to stimulate the development of renewable energy projects in Vermont?  Governor Jim Douglas and legislative leaders have very different points of view, and the disagreement could lead to a gubernatorial veto of energy legislation.

Under the new federal stimulus law, Vermont is eligible to receive almost $22 million that can be used for grants and low interest loans for residential and business renewable energy projects.

Public Service Department Commissioner David O'Brien thinks the federal law offers the state a unique opportunity:

(O'Brien) "The addition of the stimulus just simply gives us a once in a lifetime opportunity to foster this activity and do so without imposing a direct charge on our consumers."

(Kinzel) O'Brien has been very critical of a bill passed by the Legislature that establishes special utility rates to encourage the development of small, commercial renewable energy projects.

He says the rates of 30 cents a kilowatt hour for solar and 20 cents for wind projects are far above current market prices. And he says the bill will dramatically increase the cost of electricity.

(OBrien) "I think when you compare and contrast the two paths, you could see that what we're doing with the stimulus and what we're doing with clean energy brings renewable energy to Vermonters at all scales, all sizes or shapes, at prices that don't undermine our competitiveness. That's the line we're trying to walk here."

(Kinzel) East Montpelier Rep. Tony Klein is the chairman of the House Natural Resources Committee.

He supports the administration's plan to seek the federal stimulus money. But he says the bill developed by his committee is needed to encourage the commercial development of up to 50 megawatts of renewable energy projects. That represents about 5 percent of the state's overall energy use.

He says the bill also streamlines the regulatory process for these projects to help get them on line quickly.

(Klein) "I see the energy bill as being the faster way to do it because our energy bill is talking about small-scale commercial generators. This is power that would get up on the grid. What the governor may be talking about is small business owners or residences putting projects on their homes or their buildings that they would get to use the power and not necessarily see it into the grid."

(Kinzel) The governor hasn't said that he'll definitely veto the bill but he's indicated that he has serious problems with the legislation.  He's expected to make a decision in about a week.

For VPR News, I'm Bob Kinzel in Montpelier