Shumlin Has Plan For Promoting Energy Projects, Without Surcharge
04/11/11 5:50PM By John Dillon
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(Host) Governor Peter Shumlin says he has a way to pay for renewable energy development without relying on a surcharge on consumers.
Shumlin upset some lawmakers last week when he opposed the fee on electric bills one day after the House had endorsed it.
The governor now says he has a better idea that he says will spare consumers and help pay for energy projects.
VPR's John Dillon reports:
(Dillon) The governor wants the Clean Energy Development Fund to pay out some of its money in grants, rather than tax credits. He says the plan will immediately give developers of renewable projects 50 percent of the money that they would normally receive over five years in tax credits.
Shumlin said the fund can then use the dollars that have been freed up to help pay for more clean energy projects.
(Shumlin) "So it's a win-win for ratepayers because they won't see their rates go up 55 cents a month. It's a win-win for the developers, because they'll get cash up front. And it's a win-win for the Clean Energy Development Fund because it gives us more dollars - roughly $3 million - to recycle and grant to other projects that are desperately needed."
(Dillon) For Leigh Seddon, vice president of Alteris Renewables, the up-front payment makes sense. Alteris is developing a 2 megawatt solar project in Bennington County. The project has been approved for a $900,000 tax credit. But Seddon says the financial people looked at the numbers and liked the Shumlin administration's plan.
(Seddon) "And when this proposal came to us from the administration: would you accept $450,000 instead of the $900,000 tax credit, so you can get it this year when you want to build the plant, not over five years, the investment people said, ‘That works for us.' Financially, that works for us to have the cash up front, and the certainty and we will go along with that."
(Dillon) The idea of using the Vermont Clean Energy Development Fund to pay grants rather than tax credits is borrowed from federal law. The feds give renewable energy developers the option of using a tax credit subsidy or a cash payment from the U.S. Treasury.
But the governor sprang his idea on lawmakers at the last minute. He irked some in the House who had gone on record in support of the consumer fee, despite opposition from low income advocates that it amounted to a regressive tax on poor people.
Shumlin said he never supported the 55 cent fee, but he acknowledged the process wasn't perfect.
(Shumlin) "Judge us by the bills that we sign, not all of the mechanizations that happen as we get there. I would rather save Vermont ratepayers 55 cents a month with a good idea than worry about how you all interpret our timing."
(Dillon) House Speaker Shap Smith was supportive, but said he wants to examine the governor's plan in more detail. Smith sounded philosophical about Shumlin's intervention last week.
(Smith) "Well, I think you have to expect bumps in the road. That's just the way things go. I just hope this is not something that is repeated on a frequent basis."
(Dillon) The Clean Energy Development Fund has committed about $8.5 million in tax credits for 93 projects. Shumlin said his proposal would free up about $2.7 million that can then be re-directed to support other renewable projects.
For VPR News, I'm John Dillon in Montpelier.