Renewable energy advocates worry that a state fund that has fueled the growth of Vermont’s clean energy industry is running out of money. Gov. Peter Shumlin says he has a plan to replenish the fund through a new generation tax on Vermont Yankee.
The Vermont Clean Energy Development Fund has provided grants, loans, and tax credits for renewable energy projects and customers. Renewable energy developers say the fund has jump-started their industry.
Sunward Solar in Vergennes makes solar hot water systems systems. CEO Tom Hughes says the Vermont Clean Energy Development Fund helped boost sales by lowering the price of the hot water systems. Thanks to the fund, Hughes says, solar hot water is no longer a luxury item for the rich.
"The CEDF makes the benefits of solar hot water available to all Vermonters regardless of their current income of their ability to come up with the up-front cost of a solar system," Hughes said. "It doesn’t matter if you have a $1 million income a year or $10,000 income a year. If you put a solar hot water system on, it can start paying you back right away."
Hughes says energy companies like Sunward usually handle the fund application process and paperwork for customers. His company installed about 250 hot water heaters last year. Hughes says the fund helped cut the price of the systems by about 11 percent.
"It definitely boosted our sales. And that in turn led to us hiring more installers to complete all the installations that we had to do," he said.
But the Clean Energy Development Fund is running short of money. The main source was Entergy Vermont Yankee, which agreed to pay into the fund when it won permission seven years to store nuclear waste in dry casks along the Connecticut River in Vernon.
Since 2005, Entergy has kicked in up to $7 million a year. But those payments were scheduled to phase out this year, when Yankee’s original operating license expired.
Yankee’s future is now tied up in the federal courts and the state Public Service Board. The board has said the company has to follow its previous commitments, but did not specifically order Yankee to continue paying into the fund. Entergy Vermont Yankee has said it will put the money into an escrow account.
The legal uncertainty left the Shumlin Administration scrambling for alternative sources of money. In the end, Gov. Peter Shumlin went back to the same source.
"What you’ll see us recommending is a fair generation tax that is in line with what other states charge and in line with what other generators in Vermont pay at this time," said Shumlin.
Now, Shumlin says the plan is to levy a generation tax on the electricity Yankee sells, but leave it up to the Legislature on how to spend the money.
"I’m a big supporter of the Energy Fund," the governor said. "I will advocate strongly in the Appropriations Committee that the Clean Energy Fund continues to be funded through the appropriations of the state of Vermont."
The new generation tax is likely to be included in the miscellaneous tax bill that’s now in the Senate. Renewable energy advocates are cautiously optimistic.
"It is an advancement for how to keep these jobs going, and how to keep the clean energy going," said Gabrielle Stebbins, executive director of Renewable Energy Vermont, which is the industry’s trade association. "I have to say the devil is always in the details. Since 2005 this has been a dedicated funding pot. And we will certainly be mindful and watching how the appropriations committee ends up treating this funding source as it has been treated in the past, which is as a dedicated funding source."
An earlier version of this story failed to clarify that Vermont’s Public Service Board has not specifically ordered Vermont Yankee to pay into the Clean Energy Development Fund.