Gov. Phil Scott has vetoed what is widely regarded as the most significant energy bill of the legislative session, saying he believes the policy is too costly for Vermonters.
The bill proposes to update Vermont’s 2015 Renewable Energy Standard. That law dictates how much power electric utilities in the state must purchase from renewable resources, like solar, wind and hydropower, but also biomass.
This bill would require most utilities including Green Mountain Power, Vermont’s largest utility, to reach 100% renewable power by 2030. Smaller municipal utilities and semiconductor manufacturer GlobalFoundries would have until 2035 to reach 100% renewable power.
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Most controversial — and impactful when it comes to reducing climate warming greenhouse gas emissions from the electric sector — the policy would quadruple the amount of power that utilities must purchase from new renewables, and double how much power they must purchase from new renewables built in Vermont.
In his veto message to lawmakers, Scott expressed frustration that lawmakers didn’t take up an alternative policy proposal put forward by his administration, which would have taken every utility in the state to 100% carbon-free energy by 2030, including out-of-state nuclear power, and required far less of that power come from new renewables.
He argued that H.289 would raise costs for Vermonters at a time when taxes are already going up. And he said his plan was informed by an 18-month process by which the Department of Public Service sought Vermonters’ input about how to update the state’s electric policies.
“For the reasons stated above and factoring in all the other taxes, fees and higher costs the Legislature has passed over the last two years, I simply cannot allow this bill to go into law,” he wrote.
In his own statement, Senate Pro Tempore Phil Baruth said legislative leadership will try to override Scott’s veto during their veto session in June, and called Scott and Republicans an “automatic ‘no’ on any policy that will move the needle on fossil fuel dependence.’”
Baruth pointed to the governor’s stated intent to veto two other major climate bills — the Flood Safety Act, Climate Superfund Act, and his veto of the Affordable Heat Act last session, also over concerns about affordability.
House Speaker Jill Krowinski said in a statement that Scott’s veto “undermines Vermont’s commitment to a sustainable future.”
What the bill would do — and cost
Under the bill advanced by lawmakers, much of the new in-state power the policy calls for would likely come from new solar. The policy was designed by a working group of environmental organizations, utilities, renewable developers and lawmakers this summer.
Legislative analysts at the Joint Fiscal Office estimate the bill would cost Vermonters between $150 million and $450 million by 2035, which the office predicts is the equivalent of adding between $4.50 and $13.50 to the average Vermont household’s monthly electric bill by the same year.
Much of the cost would come from building new renewables, which, when sited in places where there is adequate battery storage and demand for their power during times when they are productive, reduce the amount of fossil natural gas burned to support New England’s regional grid.
Modeling the policy’s impact on electric rates has proved difficult, with earlier estimates based on numbers submitted by the Scott administration placing the cost much higher. JFO issued six fiscal notes for the bill during the session and has since rescinded that initial cost estimate. The office stands by the lower figures, with the caveat that much uncertainty remains.
Further uncertainty around the cost of the policy comes from unknowns about where on Vermont’s grid the new renewables called for in the bill would be sited.
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Right now, siting is largely driven by the market, which has led to there being pockets of the state where transmission and distribution infrastructure cannot handle new renewable generation without costly upgrades to substations and other infrastructure.
If new renewables are sited first in places where Vermont has transmission capacity for them, a substantial portion of the bill’s cost could be mitigated — but the state doesn’t currently have a policy in place to drive them there.
And while the governor and lawmakers agree Vermont should take steps to decrease its dependence on fossil fuels in the electric sector, a position supported by science, there is deep disagreement about how to proceed in doing so and at what cost.
Vermont has aged and constrained transmission infrastructure — which VELCO, the state’s grid operator, says will need hundreds of millions of dollars in upgrades in the coming decades regardless of whether the bill becomes law.
The grid operator says three nascent interstate transmission projects could address many of the grid constraints that have the potential to raise the cost of this policy over the coming decades. If they are approved and earn regional buy-in, Vermont ratepayers would pay a nominal share of the cost to build them out, with other New England states helping to foot the lion’s share of the bill.
Disagreement about how to decarbonize
In the meantime, the Department of Public Service and others have argued Vermont should do more to require that renewable developers site new projects first in places where there is demand for more electricity, and enough transmission capacity.
They argue the most cost-effective way to transition away from fossil fuels is to build out new power in places where the infrastructure supports it, to stave off any major upgrades to substations and other infrastructure.
Critics of the bill, including many Republicans and the advocacy group Vermonters for a Clean Environment, say the JFO’s cost estimates are too low because they don’t adequately consider the potential cost to electric ratepayers if all that new renewable power gets built in places that necessitate costly grid upgrades.
The Department of Public Service and others have pointed to the fact that according to the Energy Information Administration, Vermont has on paper some of the cleanest electricity in the country, accounting for just 1% of our greenhouse gas emissions as a state — though that does not account for the fossil gas our grid relies on by being hooked up to the New England grid.
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Republicans have raised concerns that Vermonters could be paying more than their fair share to reduce regional greenhouse gas emissions in the electric sector.
But Vermont electric utilities, most environmental groups, renewable developers, Progressives and most Democrats say that framing is misguided because of the global nature of climate change, often citing the 6th IPCC report, which foundthat every ton of carbon released into the atmosphere contributes to the problem of global warming. They say the state can’t afford to wait, pointing to broad scientific consensus that there is a waning window to reduce greenhouse gas emissions in order to avoid the worst impacts of climate change. Many scientists say the economic cost of climate change is vastly underestimated.
Renewable Energy Vermont, the trade group which lobbies on behalf of renewable developers in the state, and the environmental group VPIRG, which often advocates for local renewable energy as a climate solution, estimate the policy would have the equivalent impact of taking 250,000 cars off the road by 2035.
VPIRG, REV, Vermont Natural Resources Council and 350Vermont called Scott’s veto a “dismaying attempt to obstruct Vermont’s environmental and economic progress.”
They and other of the bill’s proponents say that as Vermont takes on parallel policies to reduce emissions in vastly more polluting sectors of heating and transportation through electrification, the state needs its electricity to be as clean as possible to reap the maximum emissions reductions from the costly switch to new technologies.
However, the Department of Public Service, which is charged with regulating electric rates in the state, has warned that if electricity costs go up too fast, it could dissuade people — especially those of moderate means — from purchasing new appliances like an electric heat pump or EV.
To walk or to run?
At his weekly press conference Wednesday, Scott said he and lawmakers share many of the same priorities, including taking action on climate change — despite his vetoes of many major climate bills in recent years. Speaking about a swathe of policies, he said:
“I also believe there is often a path to reach our goals while limiting those consequences. But to find that right balance, we have to take our time to get it right; walk before we run; and, importantly, make sure Vermonters can afford it,” he said.
At a demonstration on the Statehouse steps Thursday, students with the Vermont Youth Lobby implored Scott to sign the legislation into law — along with two other climate bills the governor is expected to veto in the coming weeks.
“Our governor has made it clear year after year, he will veto any and all climate bills,” said Jenna Hirschman, a Youth Lobby activist and intern with the environmental group 350Vermont.
She warned that young voters in the state — who will disproportionately shoulder the burdens of a warming climate because of their age — support rapid climate action.
Two-thirds of lawmakers present in both the House and Senate would have to vote in favor of an override for the bill to become law. The policy passed the Senate on a vote of 18-8 in early May, and the House by a vote of 99-39.
Lawmakers return to the Statehouse for a veto session in mid-June.
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