Green Mountain Senate Punishes Utility For Producing Too Much Green Energy
I stumbled across this little tempest in a tea-pot going up in Vermont. I have a lot of affection for the state – away from the cities, they are a pretty self-reliant, likeable people. Plus, the manager of this fine store tried to sell me a rifle when I was 12 years old (my parents, being fanatical supporters of victim disarmament, refused his offer).
Vermont politics is pretty distressing, since it is in many ways a very socialist state. I won’t go into all the reasons (especially since I don’t understand them all), but it is a bizarre result of New Yorkers in the cities interacting with locals who are xenophobic about outsiders.
This article highlights one of those bizarre situations. There is a nuclear power plant in Vermont. Like all nuclear power plants, it is the product of the political economy, simultaneously subsidized and taxed by various governmental agencies, its fortunes weakly coupled with the free-market.
Recently the state senate was considering an attempt to make Vermont more “green”. In effect, some state senators feel that their neighbors use too much energy, and want to stop them. Rather than going after the consumers, though, they want to make it more expensive for everyone to purchase electricity. So, they want to tax energy producers.
Of course, telling people who live through the cold winters of Vermont that they should use less heat and light might get those people angry at the senators. The senators, though, decided to use an old political trick, one which can get people to support policies that harm them directly. They fan feelings of jealousy and envy:
Senate President Pro Tem Peter Shumlin, D-Windham, said Entergy had been making windfall profits in recent years because of the high wholesale price of electricity and because of bonus payments to power producers that don’t emit the greenhouse gas carbon dioxide.
Ah yes, windfall profits! Those bastards! How dare they take advantage of a shortage by producing more electricity! Especially when we subsidize them!
Of course, like Darth Vader in cloud city, the senate is reneging on a previous agreement. When the utility protests, the senators shift the blame:
But Sen. Mark MacDonald, D-Orange and a longtime critic of Vermont Yankee, said the nuclear plant and industry had broken many of their own promises over the years.
He pointed to the industry’s early promises that nuclear power would be “too cheap to meter,” as well as the nuclear industry’s failure to establish a permanent disposal site for radioactive waste.
He recalled that when the plant opened in 1972, the Vermont utilities that owned it said they would be good neighbors; Louisiana-based Entergy bought it in 2002. And he spoke of the original plan that the plant would run for 40 years, followed by decommissioning and site cleanup.
Entergy is now seeking to run it for an added 20 years.
“For someone who has broken deal after deal after deal after deal, to come into this chamber and tell us we’re breaking a deal?” MacDonald said, shaking his head.
OK, let’s run through this. The Federal government originally subsidized nuclear power heavily, and numerous plants were built. Everybody thought that nuclear power was going to be cheap and ubiquitous, especially with the government paying the liability insurance. We were all going to have atomic sky-cars. Everyone thought that new technology would solve that pesky waste problem.
Then the federal government agreed to dispose of the waste. Except they couldn’t agree on a place to do it. Also the plants began to have problems, some like three mile island that freaked out the public, and some that only freaked out the industry, like cracks found in the pressure vessels of lightwater reactors world-wide. Remember the government picking up the tab on liability insurance? Guess what it did to the incentive to improve safety? Anyway, as a result building new nuclear power plants became more difficult. Operators faced increasing regulatory costs operating them, and there was consolidation as a few companies specializing in operating nuclear power plants bought plants from companies that could not afford to do so.
Now, suddenly nuclear power is “good” again, since it produces minimal amounts of CO2 (I’m including the emissions from periodic testing of the emergency diesel generators). The feds and the locals are offering subsidies to produce nuclear power. Companies that want to take advantage of the subsidies, who are prevented from building new plants, are naturally trying to expand capacity and also extend the length of the existing plants.
In other words, all of these “broken promises” are the results of the electricity producing industry reacting to changes in government energy policy!
Senator Mark MacDonald’s comments bring to mind something Mencken once wrote:
Every decent man is ashamed of the government he lives under.
I think the good senator is fortunate that he is permitted to mooch off of other people, and is not forced to earn an honest living.