Vermont solar panel scheme means regressive taxation

Vermont has "progressively" implemented ambitious subsidization of "net-metering" programs, whereby 1) taxpayer funds are allocated via capital tax credits to "incentivize" the acquisition of residential solar panel systems, and 2) an additional subsidy is procured through guaranteed rates of payment to those panel-owners for excess generated electricity that is sold back to the utility companies.  These incentivizing "subsidies" are withdrawn from taxpayer pockets, and from the electric rates paid by "non-participating" electric utility customers.

A March 4 hearing exposed the gross disparity and market perversion of this regulatory scheme.  A local utility (Washington Electric cooperative, Inc., or WEC) requested regulatory approval from Vermont's Department of Public Utilities of a 5.95% rate increase on electric rates effective January 1, 2020, of which 28% (or 1.67% out of the 5.95% increase) was directly attributable to "Net Metering Revenue Erosion."  This $258,792 increase resulted from the fact that WEC pays 9–10 cents per kilowatt-hour on the grid for power but then is required by the DPUC to pay 19 cents per hour to "net-metering" customers who sell back power exceeding their own consumption.  This is a direct transfer of funds from "non-participating" (those who have not installed solar panels) WEC customers to those who have benefited from public capital subsidies to install them.

The Vermont statutes that compelled this arrangement specifically prohibit this exact conduct: 

30 V.S.A. § 8010

(c) [T]he Commission shall adopt and implement rules that govern the installation and operation of net metering systems.

  1. The rules shall establish and maintain a net metering program that:

 ... (C)  to the extent feasible, ensures that net metering does not shift costs included in each retail electricity provider's revenue requirement between net metering customers and other customers.

This wealth transfer impacts poor and elderly ratepayers, who are forced to subsidize those with the resources to install expensive — and profitable — solar arrays.  Further, the solar panels are manufactured using fossil fuels and mining operations (mostly in China), are shipped long distances, and will one day become obsolete toxic waste at further environmental cost.  Poor ratepayers are undermined in their ability to install comparable systems because their wealth is depleted by inflated fee structures that Vermont's statutes forbid.

Vermont's original "Essex Plan" was more forthright about the regressive aspects of these policies:

The plan proposes a partnership between state government and Vermont's electric utilities whereby all of the proceeds of a gradually rising fee on carbon pollution are returned to Vermonters and Vermont businesses on a monthly basis in the form of lower effective electric rates and per-person rebates[.] ... Economic analyses of similar carbon pricing proposals ... indicate that the ESSEX Plan would create up to 6,000 new jobs, "make whole" Vermonters on the lowest rungs of the economic ladder, and reduce carbon pollution by 15%–25% by 2025 and 30%–50% by 2050.

This is all fantastical: electric rates are instead being increased; "rebates" have been eliminated; those 6,000 "new jobs" are admittedly "one-time benefits" or "transfer payments" between taxpayers that do not pay for themselves; and those "targets" of reduced carbon pollution externalize the environmental costs of manufacturing panels and electric vehicles using plastics, aluminum, fossil fuels, etc.  Vermont will "achieve its goals" in 2050 only by ignoring these initial state-mandated bursts of pollution.

The "climate warriors" penalize country life to "save the planet," exert financial pressure to make living in the country more costly, and restrict development to urban areas — all without a single word about helping the small Vermont farms and farm families who have been systematically compromised for generations.  Instead, the "Essex Plan" loftily proclaims that "[t]ransitioning off fossil fuels is an economic development and affordability strategy."

Mass-produced industrial food, trucked thousands of miles from California, will not always be readily and cheaply available in Northeastern America.  This dependency is unsustainable and absorbs massive amounts of fossil fuel–derived energy and concomitant pollution that is excluded when calculating Vermont's future "energy consumption targets." 

The city mice have decided to conquer the land of the country mice, forgetting who feeds whom, imposing a short-term "sustainability" that chooses market winners, increases dependence on industrial food and distribution systems, and makes the poor poorer.  Regular Vermonters who embrace their rural way of life can see the net that has been cast.

Vermont has "progressively" implemented ambitious subsidization of "net-metering" programs, whereby 1) taxpayer funds are allocated via capital tax credits to "incentivize" the acquisition of residential solar panel systems, and 2) an additional subsidy is procured through guaranteed rates of payment to those panel-owners for excess generated electricity that is sold back to the utility companies.  These incentivizing "subsidies" are withdrawn from taxpayer pockets, and from the electric rates paid by "non-participating" electric utility customers.

A March 4 hearing exposed the gross disparity and market perversion of this regulatory scheme.  A local utility (Washington Electric cooperative, Inc., or WEC) requested regulatory approval from Vermont's Department of Public Utilities of a 5.95% rate increase on electric rates effective January 1, 2020, of which 28% (or 1.67% out of the 5.95% increase) was directly attributable to "Net Metering Revenue Erosion."  This $258,792 increase resulted from the fact that WEC pays 9–10 cents per kilowatt-hour on the grid for power but then is required by the DPUC to pay 19 cents per hour to "net-metering" customers who sell back power exceeding their own consumption.  This is a direct transfer of funds from "non-participating" (those who have not installed solar panels) WEC customers to those who have benefited from public capital subsidies to install them.

The Vermont statutes that compelled this arrangement specifically prohibit this exact conduct: 

30 V.S.A. § 8010

(c) [T]he Commission shall adopt and implement rules that govern the installation and operation of net metering systems.

  1. The rules shall establish and maintain a net metering program that:

 ... (C)  to the extent feasible, ensures that net metering does not shift costs included in each retail electricity provider's revenue requirement between net metering customers and other customers.

This wealth transfer impacts poor and elderly ratepayers, who are forced to subsidize those with the resources to install expensive — and profitable — solar arrays.  Further, the solar panels are manufactured using fossil fuels and mining operations (mostly in China), are shipped long distances, and will one day become obsolete toxic waste at further environmental cost.  Poor ratepayers are undermined in their ability to install comparable systems because their wealth is depleted by inflated fee structures that Vermont's statutes forbid.

Vermont's original "Essex Plan" was more forthright about the regressive aspects of these policies:

The plan proposes a partnership between state government and Vermont's electric utilities whereby all of the proceeds of a gradually rising fee on carbon pollution are returned to Vermonters and Vermont businesses on a monthly basis in the form of lower effective electric rates and per-person rebates[.] ... Economic analyses of similar carbon pricing proposals ... indicate that the ESSEX Plan would create up to 6,000 new jobs, "make whole" Vermonters on the lowest rungs of the economic ladder, and reduce carbon pollution by 15%–25% by 2025 and 30%–50% by 2050.

This is all fantastical: electric rates are instead being increased; "rebates" have been eliminated; those 6,000 "new jobs" are admittedly "one-time benefits" or "transfer payments" between taxpayers that do not pay for themselves; and those "targets" of reduced carbon pollution externalize the environmental costs of manufacturing panels and electric vehicles using plastics, aluminum, fossil fuels, etc.  Vermont will "achieve its goals" in 2050 only by ignoring these initial state-mandated bursts of pollution.

The "climate warriors" penalize country life to "save the planet," exert financial pressure to make living in the country more costly, and restrict development to urban areas — all without a single word about helping the small Vermont farms and farm families who have been systematically compromised for generations.  Instead, the "Essex Plan" loftily proclaims that "[t]ransitioning off fossil fuels is an economic development and affordability strategy."

Mass-produced industrial food, trucked thousands of miles from California, will not always be readily and cheaply available in Northeastern America.  This dependency is unsustainable and absorbs massive amounts of fossil fuel–derived energy and concomitant pollution that is excluded when calculating Vermont's future "energy consumption targets." 

The city mice have decided to conquer the land of the country mice, forgetting who feeds whom, imposing a short-term "sustainability" that chooses market winners, increases dependence on industrial food and distribution systems, and makes the poor poorer.  Regular Vermonters who embrace their rural way of life can see the net that has been cast.