The GoalsThe ChoicesThe PlanSummary of Vermont’s 20-Year Electricity and Energy PlanThe main goal of the Vermont in terms of its electricity and energy needs for the next 20 years, according to the 2004 Vermont Comprehensive Energy and Electric plan, should be to brings its energy rates, primarily electric, for its residential and commercial customers in line with the rest of the nation.The disparity between average electric rates paid by Vermonters in comparison to the U.S. as a whole has steadily increased for the past 14 years. In 1990, Vermont’s residential electric rates were about 15 percent higher than the U.S. average, commercial rates were 20 percent higher, and industrial rates were 35 percent higher than the U.S. average. In 2004, that disparity has ballooned to about 50 percent in all three cases. This disparity has meant that Vermonters have paid $2 billion in premiums over what they would have paid on electricity had Vermont’s electric rates been comparable to the U.S. average.The GoalsThe Department of Public Service has identified three long term goals to try to alleviate this disparity and set Vermont on a sound electric and energy path.I. Lower Energy Prices – Vermonters pay high prices for their electricity, natural gas, and petroleum products. This must change due to the hurt it puts on residential customers who must deal with an uncertain economy,and on industrial customers who provide needed jobs and face intense competition from out-of-state companies.II. Reduced Risk – Vermonters want lower energy prices, less price volatility, lower supply risk, and don’t want to be exposed to the adverseimpacts of highly volatile fuel prices or unreliable energy supplies. Thus, Vermont’s energy choices should reflect its desire for reduced risk. It should also minimize the risk of widespread electric system blackouts.III. Reduced Environmental Impacts – Since Vermonters are serious about maintaining the high quality of their environment, they should seek out low energy prices and reduced risk that do not sacrafice environmental quality.The ChoicesTo achieve the three goals mentioned above, some tradeoffs will have to be made. Thus, the challenge is to identify the energy policies that provide the best balance of thesegoals at the lowest overall cost.In the area of electricity, the comprehensive plan points out that Vermont is heavily weighted towards two resources: Hydro Quebec and Vermont Yankee, which supply two-thirds of the state’s electricity. This must change as Vermont will need to increase the diversity of its electric resource portfolio. The plan also suggests using “rigorous decision analysis techniques” to improve electric resource strategies; developing more efficient rate designs; increasing regulatory clarity; continuing to improve electric energy efficiency; and encouraging renewable resource development.In the area of natural gas, the plan says that there is “considerable unrealized potential to replace other fossil fuel with natural gas. The existing pipeline structure is theprimary obstacle to the expansion of use. An expansion by Vermont Gas Systems in its existing territory is underway. Other expansions would help Vermont realize its untapped potential in this market.The primary use of petroleum in Vermont is for transportation. Just under half of Vermont’s total energy use is for transportation. Given the international petroleum market, the only likely option available for Vermont are policies that encourage cost-effective increases in efficiency in consumption.The PlanHighlights of Short-Term Action Plan (2004-2007) Implement new electric and natural gas rate designs that encourage economic growth through more efficient market pricing Design, implement and monitor voluntary green-pricing programs for all Vermont’s retail electric utilities Study the impacts of potential shutdown of Vermont Yankee and evaluate potential replacement supplies. Examine the implications of a potential license extension since an application for extension need to be submitted within the next three years. Maintain relationship with Hydro Quebec and explore potential for new hydroelectric or wind resource acquisitions when the existing HQ contract begins in 2015 Reconcile State air pollution rules with distributed generation incentives Encourage raid growth in high-speed Internet connectivity to further local economic growth and improve telecommuting optionsHighlights of Mid-Term Action Plan (2004-2007) Begin planning for Vermont Yankee retirement or re-licensing in 2012 Begin negotiations with Hydro Quebec for replacement power or equivalent Evaluate results of voluntary utility green pricing programs Monitor and evaluate electric generating resource portfolio diversity Continue to evaluate progress in reducing relative electric rtes in Vermont Complete review of EVT programs Monitor technology improvementsHighlights of Long-Term Action Plan (2004-2007) Develop specific plans for replacement of Hydro Quebec contract Continue to evaluate progress in reducing relative electric rates Monitor technology
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