Lawmakers debate green power

Hydro-Quebec renewable designation could unlock REC revenue in RPS markets, labeling large hydro as carbon-free. Vermont utilities and officials back the change, while environmental groups warn of market flooding and ecosystem impacts.

As the Hydro-Quebec power agreement was being completed in Quebec City, 250 miles to the south legislators were hearing the potential benefits and pitfalls of declaring that electricity to be renewable.

Hydro-Quebec power has historically not been counted as renewable electricity, in part because of the size of the massive dam network and in part because of the effect the project has had in flooding land in Canada.

But if that power could be counted as renewable energy in the United States (a decision that would not be up to Vermont's Legislature alone) the electricity could be worth more in places with a market for renewable energy certificates, while Wisconsin debates Canadian renewable energy in its own policy arena. If lawmakers enacted such legislation the money from the sale of such certificates from electricity that came through Vermont – potentially a lot of money – would be split between Vermont utility ratepayers and the Canadians, according to the Vermont utilities.

"We're supporting this bill in the Legislature," Mary Powell, the CEO of Green Mountain Power, said. "Having that designation makes it clear that projects like Hydro-Quebec are reliably run, carbon-free and, as clean energy policy creates demand nationwide, cost-effective ways of delivering energy."

Gov. James Douglas said he also supports that designation and expanding the definition of what is renewable.

"It seems arbitrary that a hydro project that is 200 megawatts has renewable status under some policies, but a project that is 201 megawatts is not," Douglas said. "It is renewable. That's a fact."

James Volz, the chairman of the Vermont Public Service Board, told members of the House Natural Resources and Energy Committee that he had no problem with lawmakers revising renewable energy standards to include large hydro projects.

"That's fine," he said. "I don't see any problem with that."

But it is not fine with everyone. Some environmentalists are worried that the renewable designation for Hydro-Quebec – included so far in a draft energy bill – could damage the renewable energy market by flooding it with credits or in other ways.

"We are concerned this is the nose under the tent," said Chris Kilian, head of the Conservation Law Foundation in Vermont. "It could open the door to essentially wiping out these important public policy provisions."

John Seeback of the national group American Rivers was even more pointed in his testimony to the House Natural Resources and Energy Committee.

Large hydroelectric projects "are not renewable by any reasonable standard" he said. That's because such projects, particularly when they are first built, make it more difficult for fish to migrate, release global warming causing gases and flood thousands of acres.

"These changes would not benefit Vermont's power producers either," he said.

Rep. Tony Klein, D-East Montpelier, chairman of the committee considering the language, said what happens to renewable energy credit markets in the rest of New England is up to those states.

"That's for them to figure out," he said. "There is a huge future potential here. It doesn't cost us a thing, as the payoff for renewables increases in Vermont, there is only upside."

Exactly what the renewable designation would mean for Vermont is not clear. Most states that have a renewable energy certificate market have one because they require their utilities to buy some portion of their power from renewable sources like wind, solar or small hydro projects, including revitalizing old mill dams in some regions, called a renewable portfolio standard. But Vermont has operated under a different set of rules which were designed to encourage renewable power projects while still allowing the state to sell more of its renewable energy certificates to other New England states.

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