Response to David O’Brien on energy efficiency and renewables: May 9, 2012

David O’Brien wants to reduce climate change mitigation to a matter of finger pointing, but that won’t solve the problem. Given that we live on just one planet, each pound of carbon dioxide not generated solves one pound’s worth of the problem, whether it comes from Vermont, Beijing, or Timbuktu.

Mr. O’Brien’s concern for “working Vermonters” is touching, but not convincing. Had he really had such a concern when he was DPS commissioner, he could have promoted programs to insure the working Vermonters were 1) using energy as efficiently as possible and if necessary, 2) receiving rate subsidies if optimal public policy dictates higher rates.

He did neither. Instead, he sat on a GDS study from January, 2007, which showed that the State could save close to $1 billion and 20% of its electric consumption by increasing its investment in energy efficiency programs. While Vermont has done more on energy efficiency than most states as I’m sure he’ll tell us, the GDS study (commissioned by DPS, after all) makes it crystal clear that it has done nowhere near enough. I’m sure Mr. O’Brien also understands that every “negawatt” generated by energy efficiency in Vermont saves all ratepayers considerable amounts of money because efficiency costs FAR less than ANY power source.

Additionally, Mr. O’Brien’s broader economic analysis is highly selective and therefore skewed.

First, ALL energy sources are heavily subsidized in the US and have been for decades, yet O’Brien and many others complain only about the relatively recent and highly visible subsidies granted to renewables in their effort to play ‘catch up.’ Without subsidies, the price of ALL energy in the US would be considerably higher than it now is. Were that the case, even without subsidies, renewables might well be competitive; they’d CERTAINLY be considerably MORE competitive.

Real analyses are not easy or straightforward, since, among other things, many of these subsidies bear no direct relationship to prices (e.g., Price Anderson Act). What IS certain, however, is that removing renewables subsidies while leaving in place those granted to other energy sources would maintain a highly slanted playing field in which there is nothing resembling “free” competition.

But there’s a second, related problem. Not only are fossil fuels and nuclear heavily subsidized in terms of their production of energy, they’re also effectively subsidized by being allowed to shed a portion of the costs they impose on society onto taxpayers. Thus, the price of fossil fuel generated power does not include the costs imposed by the air and water pollution it creates. Still, ignoring these costs doesn’t make them disappear. They show up in the costs of mitigation, in health effects, lost work and productivity, etc. Until all externalized costs enter into prices, the price of electricity produced will not fully reflect the cost of generating it.

So the reality is this: the market price for energy in the US means virtually nothing, since the market is not even close to being free or to including the information required to make real free markets operate efficiently. It follows that the price of US energy is NOT an adequate indicator either of cost, of social good, or really of much of anything other than of the lobbying power of specific industries.

Finally, I’ve just looked at the study on which Mr. O’Brien relies to conclude that “more jobs are lost than created” with renewable energy: (http://publicservice.vermont.gov/planning/DPS%20White%20Paper%20Feed%20in%20Tariff.pdf) Like the Spanish “study” on which it relies in part, it appears to simply apply a model to a set of data, but on a very casual reading at least, I see nothing in the study which demonstrates that the model itself is reliable or accurate. Put differently, the study is, at best, only as good as the model on which it’s based, and readers are left with no way to judge the model itself. In short, if the model or ITS assumptions are flawed, then the conclusions which follow from it are completely worthless, yet readers have no way to assess either the model or the assumptions.

As a more empirical matter, perhaps Mr. O’Brien can explain how it is that there are currently far more jobs in the Vermont renewable energy sector (well over 1000 at the last count I saw, which was BEFORE numerous projects were undertaken) than at VY (502), despite the obvious difference in the quantity of electricity produced. And let’s not forget that VEIC employs 180 workers as well, many, if not most, engaged in energy efficiency efforts.

Originally published (and full discusssion) at: http://vtdigger.org/2012/05/04/final-energy-bill-passes-minus-renewable-portfolio-standard/#comment-34671

Clairifying the problems of Nuclear Power in the Green Mountain State and beyond