Vermont’s energy future: a Canadian view

[Note to the reader: Simply an interested observer, I have no connection with Valener Inc., such as owning or promoting its stock.]

Vermonters can explore and invest in Vermont’s Canadian energy future through investor-owned Valener Inc. (Toronto Stock Exchange: VNR; http://www.valener.com).

Public Valener owns 29 percent of Gaz Métro Limited Partnership; private Gaz Métro Inc. owns 71 percent.

Providing customary reports to investors, Gaz Métro executives and directors have informed Valener stockholders that the Canadian natural-gas pipeline serving Franklin and Chittenden Counties will be extended from Burlington to Middlebury by 2015 (Investor Presentation, May 26, 2011, p. 22).

An interesting map of CVPS’s and GMP’s territories shows that southern and central Vermont’s energy future is already Canadian, but northern Vermont’s energy future is still in play (Consolidated Financial Report, June 30, 2011, p. 14).

It also identifies just one major power plant in Vermont: Vermont Yankee. Vermont’s Comprehensive Energy Plan includes a natural-gas-fueled replacement as an anchor load to facilitate extending the pipeline to Middlebury and beyond (p. IV-93).

Environmental lobbyists may shoot down these projects as they did the proposed Albany-Bennington-Rutland natural-gas pipeline and power plants. If they do not object, we should ask why they changed their minds.

Howard Fairman
Vernon, Vermont, USA

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Vermont’s energy future: Who is listening to whom?

The Rutland Herald (Vermont) wrote in an editorial (“Energy answers,” August 6, 2011 [online for subscribers]):

“Findings from the state Department of Public Service confirm the conventional wisdom about the possibilities for the state’s energy future and point in the direction of common sense.

“The department is drawing up a much anticipated new energy plan that could provide direction for policy choices as the state confronts the many challenges related to energy and the environment.

“As part of the process of drawing up the plan, the department has collected comments from thousands of Vermonters in order to assess public opinion on energy issues.”

Nevertheless, the CEP (Comprehensive Energy Plan) Public Involvement Report (Vermont Department of Public Service, August 3, 2011) is not a “public opinion survey.”

According to this report (page 4):

“It is not an exhaustive record of public comments, nor is it a scientific survey of Vermonters. Rather, it captures general trends and suggestions to form a snapshot of public opinion across a variety of energy issues.

“It reflects the views of the comments received, but it is not necessarily representative of the views of all Vermonters or the Administration. Comments have not been edited for factual accuracy.

“Comments were received via email and the CEP website, as well as verbally at stakeholder meetings and public forums.”

In other words, advocates for or against particular energy options, not necessarily Vermonters, shared their views. Feasibilities, environmental impacts and true costs (including subsidies) have not been determined.

The Rutland Herald wrote: “For example, Vermonters like the idea of decentralized, small-scale, ‘distributed power generation’.” Some Vermonters do, though perhaps not if their properties turn out to be affected or taken by the generation facilities or the transmission lines connecting them to the Vermont grid.

A century ago, Vermont had decentralized, small-scale, distributed power generation. Everyone outside of those neighborhoods waited until electricity came to their neighborhoods. My already settled neighborhood, a mile from the 1909 Vernon hydro plant, waited until 1956 — 47 years.

Nowadays, every Vermonter’s work and leisure depend on electricity. Availability, reliability and affordability will be our demands, whatever the energy source.

Howard Fairman
Vernon, Vermont, USA

Vermont Uncommon Taters: plain, nutritious, organic, underground, local food for thought about Vermont.

 

 

Vermont’s energy future is Canadian

[Updated August 16, 2011: Gaz Métro’s announcement to investors that the existing Canadian natural-gas pipeline will be extended from Burlington to Middlebury (Vermont) by 2015; management’s investor discussion and analysis of the Central Vermont Public Service (CVPS) acquisition.]

Why does Gaz Métro — pipelining Canadian natural gas to Vermont, New Hampshire, Maine and Massachusetts — own Vermont Gas Systems and Green Mountain Power, and covet Central Vermont Public Service?

The Québec government, owner of Hydro-Québec, governs La Caisse de dépôt et placement du Québec, a $151.7-billion provincial investment fund. (“Québec Deposit and Investment Fund” has no official name in English.)

La Caisse controls Trencap, which controls Noverco, which owns Gaz Métro Inc., which controls Gaz Métro Limited Partnership, which owns Northern New England Energy, which owns VGS and GMP, and would own CVPS, “a clear consolidation opportunity.” (details)

La Caisse’s chairman is chairman of GMP. Noverco and subsidiaries’ boards share key members.

In Québec, Gaz Métro must sell natural gas at cost and Hydro-Québec must discount electricity. Both profit by selling their surpluses to the neighbors, subsidizing Québec employers and employees competing with us for free-trade business and jobs. (speech)

The Vermont Comprehensive Energy Plan includes a natural-gas power plant on the pipeline in Franklin or Chittenden County “as an anchor load to leverage expansion of the VGS network to communities that are currently without natural gas.” (plan)

(August 16, 2011) Valener, Gaz Métro’s investor-owned business partner (Toronto Stock Exchange: VNR) has announced a “significant extension of the natural-gas distribution network in Vermont [from Burlington to Middlebury], a US$65-million project, expected to be operational by 2015” (Investor Presentation, May 26, 2011, page 22).

Gaz Métro’s pipeline partner, TransCanada of Calgary, Alberta, provides the natural gas and owns a modern, 560-megawatt, natural-gas power plant in Rhode Island, easily duplicated here. Gaz Métro’s merged GMP and CVPS will buy the electricity and resell it to us at attractive rates as long as natural-gas prices remain low.

Closing 605-megawatt, federally relicensed Vermont Yankee eliminates their principal competitor.

(Transmitting electricity from Québec through Vermont to other states is impossible without new transmission lines similar to the Northern Pass project in New Hampshire.)

Howard Fairman
Vernon, Vermont, USA

Vermont Uncommon Taters: plain, nutritious, organic, underground, local food for thought about Vermont


Background:

My researching and writing of this uncommon tater was inspired by two contrasting press releases:

Competing to buy Central Vermont Public Service, Fortis of St. John’s, Newfoundland, said in a press release: “Approximately 50 percent and 40 percent of the energy supply in 2010 for CVPS was derived from nuclear and hydroelectric sources, respectively, making it one of the cleanest energy supplies in the United States. Most of the energy sold by CVPS is acquired from Hydro-Québec and the Vermont Yankee nuclear power plant through power purchase agreements.”

Shunning Vermont Yankee, but contracting to buy “low cost, low-carbon, reliable” New Hampshire nuclear power from Seabrook, Green Mountain Power said in a press release: “This agreement is very favorable for our customers, and delivers on the vision Green Mountain Power launched three years ago to move to a cleaner, greener future in a cost-effective way. We set out to accomplish this by ramping up cost effective renewables while we built a solid portfolio that is low in carbon, cost and is incredibly reliable. This provides the perfect platform for our continued efforts to pursue cost effective renewable energy options.”

Buying and merging with Central Vermont Public Service, how could Green Mountain Power rationally reject and replace Vermont Yankee nuclear power?

Having explored a rationale, I offer this uncommon tater as food for thought about this question.

Another question: Backed by La Caisse and therefore far better financed than Fortis, did Gaz Métro let Fortis set the price of CVPS before bidding slightly higher to dissuade Canadian and international competitors hoping to buy lucrative, increasingly scarce, investor-owned American utilities?

(August 16, 2011) Gaz Métro management, via investor-owned business partner Valener, offer an informative discussion and analysis of the CVPS acquisition (Consolidated Financial Report for the Third Quarter of Fiscal 2011 Ended June 30, 2011, page 14).

Employee-owned Vermont Yankee detailed analysis and proposal

Members of the
Vermont House and Senate
Committees on Natural Resources and Energy

Cc: International Brotherhood of Electrical Workers Local 300

FYI: Governor Peter Shumlin
Attorney General William Sorrell
Vermont Public Service Board

With reference to my more widely distributed “Employee-owned Vermont Yankee funds decommissioning & river stewardship,” here is a more detailed analysis and proposal for your further consideration as you please.

The State of Vermont asserts power to close Vermont Yankee, which is manifested only if it is exercised. That the states cannot interfere with interstate commerce, likely including generation and transmission of electricity via the New England grid, seems to be settled law. The Supreme Court of Vermont has clearly stated its criterion for allowing or disallowing legislative encroachment on executive powers. The Supreme Court of the United States (and perhaps of Vermont) likely will decide these issues in due course.

Entergy, however, has forfeited Vermonters’ trust and respect, which anti-nuclear lobbyists naturally are exploiting to realize their clients’ agendas.

The fundamental question remains: What is best for Vermonters?

  • Vigilant operation of Vermont Yankee is best for Vermonters.
  • Timely demolition and “green field” cleanup of Vermont Yankee when the federally extended operating license expires in 2032 is best for Vermonters.
  • Exemplary stewardship of the Connecticut River is best for Vermonters.
  • Removal of all nuclear waste from Vermont is best for Vermonters.
  • Reliable, affordable electricity is best for Vermonters, especially employers and during peak demand.

Employee-owned Vermont Yankee

Long-time employees say that Vermont Yankee was well run before Entergy bought it, because they were a team focusing on vigilant operation, as they would again if given the opportunity.

Vermont Yankee has a consistent, 39-year history of operating revenue and expenses generating and selling electricity profitably in interstate commerce via the New England grid, providing excellent grounds for projecting them 21 years hence until the federally extended operating license expires.

Employee-ownership of Yankee likely would happen in the customary manner and be financed conventionally with 20-year revenue bonds paid off from operating revenue.

The market will determine the bond interest rate, which in turn would determine a purchase price at which operating revenue covers operating expenses, debt repayment and paying up the decommissioning trust fund.

Employee-owned Vermont Yankee funds decommissioning

Relying on investment income from the current balance of the decommissioning trust fund to fund demolition and cleanup of Vermont Yankee someday is a race between cumulative rates of investment appreciation and cost inflation.

While theoretically possible, paying up the decommissioning trust fund in this manner is likely to be practically impossible.

Instead, regular contributions should pay up the decommissioning trust fund while investment appreciation compensates for cost inflation.

Profits from employee-owned Vermont Yankee’s continued operation until 2032 can pay these regular contributions.

Employee-owned Vermont Yankee funds river stewardship

Environmentalists protest the ecological impacts of pumping cooling water from and returning it to the Connecticut River. The “river” is not a real river, but a stair-step series of hydroelectric reservoirs having unnaturally weak currents and high water temperatures. Nevertheless, there is no reason to make matters worse.

Intake suction can be minimized if necessary by widening the river-water intake (narrower currents flow faster; wider currents flow slower). Native aquatic life can be nurtured and returned to the river. Cooling greenhouses can combine thermal and solar energies to grow local flowers, fruits and vegetables year-round while exchanging atmospheric carbon dioxide for oxygen.

Environmentalists who favor nuclear power as a limiter of global warming could work with Vermonters to organize and judge a design competition for the demonstration hatchery, nursery and greenhouses. Design criteria could include minimizing land use and energy wastage. Vermont would demonstrate exemplary stewardship of a working river, possibly obtaining financial grants supplementing Vermont Yankee’s funding.

Removal of all nuclear waste from Vermont

The United States used to recycle nuclear fuel. Fearing proliferation of nuclear weapons, President Carter issued in 1977 an executive order to stop recycling. This executive order has been rescinded, but recycling has not resumed. Instead, we store nuclear fuel forever at the sites of operating, closed and demolished nuclear power plants. Doing nothing to face and solve this problem has not gotten rid of it.

Meanwhile, France and Japan are recycling nuclear fuel successfully without nuclear proliferation. Vermont should take the lead in championing our doing the same.

Reliable, affordable electricity

Electricity is a fundamental economic input for every employer. It must be both reliable and affordable, which will be the sine qua nons of Vermont’s energy future.

Advocates of closing Vermont Yankee state correctly that there is ample surplus electric generating capacity on the New England grid — at typical levels of electric demand.

They overlook that this is not true during peak electric demand throughout New England, when Vermont imports 75 to 90 percent of its electricity, including from Vermont Yankee on the state line.

Existing interconnections with Hydro-Québec have no spare capacity to replace Vermont Yankee’s output before March 2012. Designing, permitting, acquiring rights-of-way, building transmission lines and building converter stations will take several years.

Vermont’s energy future can be innovative, even revolutionary. Requisite technologies are new and evolving rapidly as scientists and engineers ascend the inevitable learning curves perfecting both their knowledge and its application.

For example, existing solar panels inefficiently convert a limited range of hues (wavelengths) of sunlight into electricity. Prototype multi-layer solar panels more efficiently convert more hues of sunlight into more electricity.

If Vermonters commit ourselves too soon to evolving energy technologies, we will be stuck with them or the costs of discarding and replacing them with perfected versions.

Twenty years from now, when Vermont Yankee is closing for good, we will have tried and proven reliable and affordable alternatives.

Thank you for your consideration.

Howard Fairman
Vernon, Vermont, USA

Employee-owned Vermont Yankee funds decommissioning and river stewardship

Governor Peter Shumlin
Attorney General William Sorrell
Vermont House of Representatives
Vermont Public Service Board
Vermont Senate
Vermont news media

A letter to the editor (173 words), open letter, press release and op-ed piece (317 words):

There is an alternative to closing Vermont Yankee: an employee-owned nuclear-power plant funding timely “green field” decommissioning from profits of continued operation until 2032 while demonstrating exemplary stewardship of the Connecticut River.

Finding no other buyer, Entergy may sell Yankee cheaply to get this burden off its books and its shareholders off the hook.

Employees, who say that Yankee was well run before Entergy bought it, could gladly operate it safely and efficiently while contributing the profits to pay up the decommissioning trust fund instead of sending money to Entergy in New Orleans.

When the federally extended operating license expires 21 years from now, demolition and cleanup can begin immediately and be completed as soon as possible. Vermonters will have planned, designed, permitted, built and perfected alternatives to Yankee.

We also can demonstrate environmental innovations protecting the Connecticut River while pumping cooling river water through Yankee. Cool inflow can first circulate through a hatchery and nursery for native aquatic life. Warm outflow can first circulate through greenhouses growing flowers, fruits and vegetables year-round.

Continuing an open letter, press release and op-ed piece (144 additional words):

Entergy can instead operate Yankee while the courts decide the constitutional questions. Can the State of Vermont constitutionally prevent continued operation of a specific business duly licensed by the federal government and engaging in interstate commerce? Can the Vermont Legislature, despite constitutional separation of legislative and executive powers, authorize (or not) the Vermont Public Service Board to issue a certificate of public good to a specific business?

Closing Yankee, Vermont will lose reliable electricity, good jobs and millions in taxes and fees. We will keep a derelict nuclear plant and its radioactive waste and pollution that must be secured and safeguarded until the decommissioning fund grows to pay for demolition and cleanup decades from now. Our grandchildren and great-grandchildren will wonder why we swapped cheap electricity for exempting Entergy from contributing to the decommissioning fund.

If anyone “wins” by closure, what will Vermonters win?

Howard Fairman
Vernon, Vermont, USA