The concept of beneficial electrification is widely promoted as a means of reducing greenhouse gas emissions in the state. But the success of beneficial electrification depends on people like you and me choosing to use more electricity and less gasoline, propane, heating oil, and the like. – Stephen Knowlton
By Stephen Knowlton
In last year’s President’s report to the members, I talked of storms, outages, and WEC’s ongoing effort to improve reliability of service in the face of changing weather. Over the last year, we’ve experienced high winds and another flood in our territory in addition to “regular” storms that have led to outage levels that have exceeded the yearly averages prior to 2022, not to mention devastating loss of some members’ property.
This year’s report deals with a different challenge—the question of affordability and what WEC members are paying for on their bills. Those of you who follow the news know that affordability—the ability to pay for one’s basic and essential needs within one’s income—has made a political impact during the last year. Having reliable electricity is essential to modern life in the US. Reliability regularly comes up as the highest priority of electric service in polls of electric ratepayers. But most people also pay keen attention to the electric bills they pay for this service they rely on. What isn’t always clear on our electric bill is the added cost of state programs that impact your bill.
We know we are paying for the cost of electricity WEC purchases to deliver to us whenever we want it. Our bill also covers the salaries of the staff and union employees of WEC who keep the system running. Part of our bill also goes to paying off the debt on loans that WEC uses to pay for equipment and materials to maintain our substations, lines, and poles. As the costs of skilled labor, materials, repairs, and other operating necessities go up, so do rates needed to pay for them even at a not-for-profit, member-owned utility like WEC. All electric utilities in Vermont are regulated by the state government through the state’s Public Utility Commission to ensure that utilities supply electricity to their customers at the least cost. WEC members already know the sparsely populated and residential nature of the territory they live in leads to somewhat higher rates.
There are also state programs that add to your bill. While of value, they present ratepayers like us with two challenges. First, the imposition of extra fees and costs on our electric bill unrelated to our usage is likely to make some of us think twice before making a switch to use and pay for more electricity rather than less. The concept of beneficial electrification—the replacing of fossil fuel energy with cleaner electricity to heat our homes and drive our vehicles—is widely promoted as a means of reducing greenhouse gas emissions in the state. But the success of beneficial electrification depends on people like you and me choosing to use more electricity and less gasoline, propane, heating oil, and the like.
Secondly, these added fees are often regressive. They tend to fall on those who are least able to pay more or adjust their electric usage to get out from under rising electric bills, say, by investing in a net metering facility that is expected to pay off its investment in 10 years. Net metering in WEC territory also has the effect of unfairly transferring the costs of operating WEC’s grid from some members to others. Most of the benefits and incentives offered by the state’s beneficial electrification goals accrue mainly (but perhaps not solely) to more well-do-to residents, in my opinion. If climate change affects us all, one should expect that our society should equitably pay the cost of mitigating it via a standard income tax in which those who earn more pay more. It is unjust to burden ratepayers as if electricity was a luxury.
Efficiency Vermont (EVT), the state’s designated energy efficiency utility, has traditionally provided assistance to Vermonters to purchase energy efficient devices and to improve commercial processes so that they use less electricity, which I think is a worthy goal. This program is funded by Vermont electric ratepayers by a supplemental cost per kilowatt-hour charge on their bill. Our General Manager Louis Porter tells me that WEC ratepayers have averaged only about 50 cents of returned direct incentives on the dollar of the fees they’ve paid; our service territory has few large commercial ratepayers of the type that offer the biggest return on efficiency per project. Whatever the reason, I urge members to contact Efficiency Vermont whenever you are considering buying a heat pump or EV charger to find out your options for guidance and assistance; you’ve paid for this assistance and should take advantage of it. Furthermore, legislation proposed this year would allow to expand their mandate of reducing electric consumption through efficiency by orienting their program to target greenhouse gas reduction in the transportation and building heating sectors by doing more to encourage using electricity. As currently proposed, the bill would limit EVT’s budget to its current amount. I worry, however, that expansion of the mandate will result in a demand for higher fees on electricity to support what is good work in the future, and it seems counterproductive to raise fees on electricity to provide money for incentives to encourage use of electricity.
I don’t know what the outcome of this particular issue will be. Whether it survives in its present form or not, it represents an effort by the government and corporate community to subsidize renewable energy developers and other environmental goals by increasing the burden on the average electric ratepayer, who may not fully grasp why his or her bills are going up. Many of you may agree with this approach to use any means to reduce greenhouse gas emissions. But I hope that the state finds the means and the will to justly socialize the cost of doing so to include all stakeholders in Vermont’s future.