VCE Weekly Update

Good News, Bad News

by Annette Smith (Executive Director of Vermonters for a Clean Environment, Inc.)

Good News

Southwestern Vermont is the home of one of the finest celebrations of solar energy in New England. Next weekend, July 29 and 30, head to Middletown Springs, Vermont for SOLARFEST (www.solarfest.com) a two-day music festival powered by the sun. This year's festival features an expanded energy fair with solar & renewable energy workshops and over 25 energy vendors & displays. The music is fantastic, the food is terrific, and the setting is incredible.

If too many industrial development projects have landed in your back yard, you can escape for two days to kick back and relax and find something to feel good about. And as a bonus you can learn about renewable energy and what you can do to reduce your dependence on fossil fuels. Every watt created by the sun is one less watt generated by oil, gas, or nuclear fuel.

VCE is joining a coalition of environmental and energy groups to promote Renewable Energy by drafting a series of energy policy priorities and commissioning a study to make policy recommendations. Clear objectives of Renewable Energy advocates will be important in upcoming legislation and the electric utility restructuring docket that was filed with the Public Serve Board [Docket 6330].

Bad News

Is Industry Writing Energy Policy?

On Thursday July 20, Secretary of Energy Bill Richardson announced 14 recommendations to improve the diversity of energy sources in the Northeast.

One of the recommendations by The Department of Energy's Office is streamlining the federal government's process for approving new natural gas storage capacity and pipelines bound for the Northeast in an attempt to reduce the region's dependence on heating oil and prevent a recurrence of price spikes.

This policy recommendation conflicts with the Energy Information Administration's (EIA) report issued in May of this year which predicted that switching from distillate oil to natural gas will not protect the region's energy customers from a repeat of the heating oil price shocks that they experienced earlier this year. If anything, it could aggravate prices not only for distillate oil but for gas.

Also in May, an independent economic consulting firm, Charles River Associates, issued a study that said converting users of heating oil to natural gas would result in higher energy costs for Northeast consumers. The study, commissioned by the Independent Fuel Terminal Operators Association, also found that converting users of heating oil to natural gas could actually result in a repetition of price spikes in the region.

The Administration had requested the Department of Energy to make recommendations on how to facilitate conversions to natural gas in response to the sharp increase in heating oil prices last winter.

The Charles River Associates study focused on the broader question of whether such conversions would be good public policy and economically sound. "Our study finds that the cost of such conversions would far exceed any potential benefit the Department of Energy is trying to achieve," stated W. David Montgomery, principal author of the study and a former Department of Energy economist.

At the request of the Independent Fuel Terminal Operators Association, Charles River Associates (CRA) prepared a report, "The Winter Spike in Northeast Heating Oil Prices: Should Anything Be Done About It?'' The report focused on whether the government should encourage and/or facilitate consumers of home heating oil in the Northeast to switch to natural gas.

The report found that:

Such conversions are unnecessary and unproductive.
Their costs will far exceed any potential benefit.
Conversions involve substantial initial capital costs and increase home energy costs.

What Can YOU Do?
Write your Congressmen. Urge them to defeat any attempts to expedite the construction of new greenfield natural gas pipelines in New England. To support an energy policy that reduces dependence on fossil fuels instead of increasing it.
Sen. Patrick Leahy	United States Senate Washington, DC 20510 (202) 224-4242, (800) 642-3193 senator_leahy@leahy.senate.gov
Sen. James Jeffords	United States Senate Washington, DC 20510 (202) 224-5141, (800) 835-5500 Vermont@jeffords.senate.gov
Rep. Bernard Sanders	U.S. House of Representatives Washington, DC 20515 (202) 225-4115, (800) 339-9834 bernie@mail.house.gov