This month Rhode Island’s dominant utility, National Grid, made its second-ever filing with the Public Utilities Commission (PUC) under Rhode Island’s “revenue decoupling” statute. Grid’s filing clarifies matters in a debate that swirled around the environmental community in Rhode Island (and the rest of New England) for years but ought now to be resolved once and for all – an argument over whether decoupling is a rip-off of utility rate-payers. CLF (and other environmental advocates) have argued for years that there are important environmental benefits to be reaped from decoupling. Opponents, including some ratepayer advocates, argued that decoupling would be bad for rate-payers because it would inevitably lead to unjustified rate hikes.

Grid’s highly technical, 59-page filing with the PUC this month is dense reading, with pages upon pages of complicated charts, but at the end of the day the filing resolves the controversy. Decoupling is good for ratepayers. In the year that ended on March 31, 2013, Rhode Island electricity ratepayers will receive a collective refund from National Grid of $4.2 million, including over $42,000 in interest on ratepayer overpayments.

Some explanation of what decoupling is and how this controversy has developed is in order.

Traditional utility regulation provides little incentive for utilities to promote energy efficiency. This is because reduction in sales equals a reduction in profits for the utility.

Decoupling is a way to address this problem and to align the utility’s pecuniary interest with the public interest in efficiency and conservation. Decoupling separates (that is, “decouples”) a utility’s income from the amount of commodity the utility sells. This effectively removes a major disincentive to utility enthusiasm for and participation in energy efficiency measures.

Decoupling is not all that is needed to achieve carbon-emission reductions through energy efficiency; but decoupling is one important and necessary ingredient. Many states have decoupled, and there is a high correlation between states that reduce carbon emissions the most (thereby lowering ratepayer bills the most) and states that have decoupled.

Work on “decoupling” is one aspect of CLF’s wider work on reducing carbon emissions in order to address the climate change emergency. More specifically, decoupling is closely linked to our work on energy efficiency. One of the most effective ways to reduce carbon emissions in the short- and medium-term is to work on energy efficiency.

In 2008, CLF participated in a litigation in the PUC in which we tried to get the PUC to decouple gas prices. The litigation, PUC Docket # 3943, took weeks, and CLF presented an expert witness, crossed examined witnesses of other parties, submitted briefs. But CLF lost the case; the PUC ruled that it would not decouple gas prices in Rhode Island.

In 2009, CLF tried again, this time trying to get the PUC to decouple electricity prices. This litigation, PUC Docket 4065, also took weeks – again, we presented an expert witness, cross-examined other parties’ witnesses, briefed the issue. Again we lost; the PUC ruled that it would not decouple electricity prices.

The main argument against decoupling was that it would hurt ratepayers. The Division of Public Utilities and Carriers (this is the statutory ratepayer advocate in Rhode Island, and is different than the PUC) opposed decoupling for this reason, as did others. One expert witness against decoupling put it this way: “[T]he plan would allow a broad range of automatic rate adjustments that would result in rate increases . . . .There is no down side to the Company. The only down side is to the ratepayers.”

In response, CLF introduced evidence that actually came from 28 natural gas utilities and 12 electric utilities in 17 states across the country that have operative decoupling mechanisms. This broad range of utilities showed two important results from decoupling. The first, and smaller point is that decoupling adjustments tend to be minor. Compared to total residential retail rates, decoupling adjustments have been most often under two percent, positive or negative, with the majority under 1 percent. The second, and larger, point is that decoupling adjustments go both ways, sometimes providing small refunds to customers, sometimes providing small surcharges.

Nevertheless, despite the evidence we introduced, we lost both cases. The PUC was persuaded that decoupling was just a trick whereby the utility could always ratchet rates upward.

In 2010, CLF, working with other environmental organizations supported a bill in the Rhode Island General Assembly that would require decoupling of both electricity and gas prices. On May 20, 2010, Governor Donald Carcieri signed the bill into law.

On October 18, 2010, the PUC opened a new docket in order to implement the new law that mandated decoupling. This time, the question wasn’t whether Rhode Island would decouple, but how. CLF participated as a full party in the docket in order to ensure that the decoupling mechanisms adopted would be designed to reap all the environmental benefits without unduly hurting or harming ratepayers. Nine months later, on July 26, 2011, the PUC approved an excellent set of decoupling rules for both electricity and gas.

A year ago, in May 2012, Grid filed its first-ever report under the then-new Rhode Island decoupling statute and under the PUC rules. That report showed that, on the electricity side, Grid needed to rebate to Rhode Island ratepayers just over a million dollars for the year that had ended on March 31, 2012.

This month, Grid filed its second-ever report under the now-not-so-new-anymore decoupling statute.  This year, the amount Grid is going to rebate to Rhode Island ratepayers has more than quadrupled, to $4.2 million.  Rhode Island ratepayers are getting rebates – not additional payments – in both of the first two years that electricity decoupling has been implemented in Rhode Island.

Remember the main point that CLF’s expert witnesses made in the decoupling dockets that we lost in 2008 and 2009: decoupling adjustments go both ways. Sometimes ratepayers pay a little extra; sometimes ratepayers get a rebate. Real-world results from the first two years of decoupling show that CLF’s main point was 100% correct.  And not only are Rhode Island ratepayers getting a rebate from Grid, but everyone in Rhode Island enjoys the savings and efficiency benefits that decoupling enables – and the environment enjoys lower carbon emissions.

As I suggested a year ago when the first-year figures came out, there may be two lessons that can be learned from this – one about CLF and one about the broader environmental movement.

About CLF: One of the things I love about working for CLF is the stick-to-itiveness that the organization (and my fellow and sister staff members) have. In 2008, we litigated decoupling, and we lost. So we tried again. When we lost again, we turned to a different forum, the General Assembly. When the law we supported passed, we were pleased – but we didn’t rest. We still had another litigation in the PUC to make sure that the law was properly implemented.

CLF is nothing if not persistent!

And about the broader environmental movement: So often our opponents argue that environmental protections are too costly to implement. Too often, the arguments made by environmentalists about the benefits and savings from environmental protections are just not believed by decision-makers and by ordinary citizens. With decoupling, everyone (including the PUC and so many others) just “knew” that decoupling would be an expensive rip-off. When evidence like this comes to light about the financial and pecuniary benefits of environmental laws, we should make sure that the public knows.

Can the Vermont Public Service Board determine the meaning of its own orders? The answer would seem to be “Of Course!” But that is the question that Vermont Yankee’s owners are putting before the Vermont Supreme Court.

In two orders the Vermont Public Service Board issued a strong rebuke to Entergy.

The Board refused to amend its prior orders and confirmed that the conditions of Entergy’s permits remain intact. Those conditions include that Entergy will not operate Vermont Yankee past March 2012 without new approval from the Board.

Entergy brought this appeal to challenge those orders.

On Monday Conservation Law Foundation’s brief, filed jointly with New England Coalition and Vermont Public Interest Research Group challenged Entergy’s claims. Our brief noted:

Rather than comply with the conditions … and Board orders that were not appealed, Entergy instead seeks to ignore Vermont law and expand the application of this simple statute to sanction continued operation regardless of the current license requirements and prior commitments that were incorporated into the Board’s Order approving the sale of the plant to Entergy.

The State of Vermont also filed a brief opposing Entergy’s appeal.

It seems obvious that Entergy should be held to its commitments. We gave the Vermont Supreme Court some good arguments to encourage it to agree with us. Entergy will file a reply brief next month and a decision is expected within a year.

Come join Conservation Law Foundation and our allies THIS SATURDAY in Burlington, Vermont for a discussion on Vermont’s Energy Choices.

Vermont’s Energy Choices: Old Dirty Problems and Clean Energy Solutions
Saturday, April 27th, 1:30 PM at the Billings Auditorium at UVM in Burlington

The time is NOW to move away from dirty sources of energy such as tar sands, nuclear, oil and coal. Solutions are available now to move us away from expensive, dangerous and polluting energy.

Come hear national and international experts on the problems of dirty energy – from fracking to tar sands – and  the real-world successes of renewable power – including community based renewable power in Europe.

Throwing up our hands is not an option. Come find out how to make a clean energy future our reality.

You can sign up and more information here:  See you Saturday!

The Vermont Public Service Board will be holding a public hearing on the proposed expansion of Vermont Gas facilities.

Vermont Gas Systems Expansion

Thursday evening, March 21, 2013

7:00 p.m 

Champlain Valley Union High School in Hinesburg, Vermont

At a time when climate change is upon us we must think carefully about putting in place new fossil fuel systems that will be around for a very long time. Keeping us hooked on fossil fuels for many years is a bad idea.

The Board will be considering the proposed route, which runs through valuable wetlands and farmland. This is the beginning of a bigger project to supply gas across Lake Champlain to New York. It also moves Vermont closer to being able to access gas supplies from fracking, which is ongoing in New York and Pennsylvania.

Come let the Board know what concerns you have. Tell the Board you want to make sure energy is used wisely and that Vermont takes steps now to reduce our addiction to fossil fuels. It is important for the Public Service Board to hear from you.

Senator Bernie Sanders is hosting a Global Warming Conference – What does it mean for Vermont?  — on Saturday March 16 from 10am to 4pm at Montpelier High School in Montpelier Vermont.

Bill McKibben will be the Keynote Speaker and Senator Sanders will be joined by Vermont and national leaders for workshops and discussions about climate change and what it means for Vermont.

I am pleased to join Senator Sanders and Bill McKibben for this event. It is a great opportunity to learn more about how we can tackle climate change together.

The event is free and open to the public and lunch will be provided.

More information is available here.

In the aftermath of the storm called Sandy, there have been weekly calls for the federal government and for states to address how our country might adapt in response to a changing climate. A recent Government Accounting Office report, a petition to FEMA with which CLF has been involved, and the launch of a new Northeast regional web-based climate resource, all illustrate different aspects of this challenge.

Every year, the GAO provides an update to Congress as part of its “High Risk” series, detailing areas of government fiscal exposure and recommending actions to mitigate those. In this year’s report, GAO has added a new area of concern: “Limiting the Federal Government’s Fiscal Exposure by Better Managing Climate Change Risks.” The major finding? “The federal government is not well organized to address the fiscal exposure presented by climate change,” even though a National Research Council paper in 2010 concluded that “increasing the nation’s ability to respond to a changing climate can be viewed as an insurance policy against climate risk.” The conclusion? “The federal government needs a strategic approach with strong leadership and the authority to manage climate change risks….” Unfortunately, in areas such as federal flood and crop insurance, technical assistance to state the local governments, and disaster aid, there has been little progress to date.

This is illustrated by a petition filed in October by the Natural Resources Defense Council and National Wildlife Federation that calls on FEMA to abide by it’s statutory responsibility to include anticipated climate change effects in its approval of each state’s Hazard Mitigation Plan, the key document that the New England states use in planning how best to avoid weather and climate risks, and be eligible for disaster relief funds. CLF has urged our state congressional delegations to request that FEMA act on the petition, which it has thus far ignored.

As New England communities seek information and resources on best practices to assess and act on our changing climate, a new tool became available this week. NOAA, working with National Wildlife Federation, EPA, and others, has just opened the Northeast Climate Database, a searchable tool to provide regionally relevant climate information. Here you can look for reports and resources specific to a state, a geography such as the ocean shore, or an issue like public health in a warming world.

CLF has long been involved in these issues. From our active involvement in assuring that New England’s climate future is accounted for in National Forest planning, to tackling coastal adaptation issues in Rhode Island, and challenging the EPA for failing to address climate change considerations in its 2008 Lake Champlain cleanup framework, CLF has always been a regional leader in climate adaptation. As CLF staff attorney Anthony Iarrapino said, “Climate change is no longer an ‘if’ or a ‘when.’” I invite you to follow CLF as we act on CLF President John Kassell’s declaration that climate change is the key issue not just for CLF, but for all of us, over the next decade.

photo courtesy of Shannon Henry @ flickr.com

The past few weeks have not been kind to Vermont Yankee or its owners. Investment analysts continue to raise doubts about Yankee’s economic future. It is costing more to run the plant and its future looks bleak.

In Vermont, hearings began last week before the Public Service Board on whether state approval should be granted. Entergy’s four – that’s right, four – law firms are packing the hearing room, but the plethora of high-priced lawyers are having a hard time showing that Vermont will be better off to keep the plant running. Much of their time is spent raising objections and claiming nearly every matter is out of bounds, and cannot be considered by the Board.

The Board must decide if continued operation is in Vermont’s best interests. Matters of radiological safety cannot be considered by the state board, but matters of economics, power supply and the environment are fair game.

During the first week of hearings, Vermont Yankee’s witnesses were on the stand. It was an impressive collection of corporate executives, economists, professors and power professionals. Their testimony had been previously submitted in writing. The hearings allowed the Board and the parties to ask questions.

Just like the tired old plant, the questions revealed real cracks in Vermont Yankee’s claims. One of Entergy’s top executives acknowledged “very serious issues” regarding “misinformation” about the existence of underground pipes at the plant in 2010. He also acknowledged a number of past incidents where penalties had been imposed for failing to follow required rules.

On power supply, the plant is not needed for reliability. The lights will still stay on without Vermont Yankee. There is an excess of power available in New England and the growth in renewables alone over the next decade is greater than the total output of Vermont Yankee.

When asked about environmental problems at the plant, Entergy’s executive confessed he is not an expert on environmental law noting he took that class “Pass/Fail” in law school. Too bad. Vermont deserves better.

Hearings continue February 19 at the Vermont Public Service Board, and are expected to finish February 25. The Board has asked for additional Entergy witnesses to explain how it has complied with prior commitments and also about events that happened in 2010. The State of Vermont, Conservation Law Foundation and the other parties will then make available their witnesses who will answer questions about power supply, the environment and economics.

Keeping the lights on shouldn’t be this difficult. The response by Entergy to the outage at the Super Bowl is very reminiscent of the responses by Entergy to the many problems at its Vermont Yankee nuclear plant. It boils down to a piece of equipment failed and the power went out. A repeated problem at Vermont Yankee has been equipment failures – from cooling tower collapses to leaking pipes.

Sure problems happen, but c’mon. Enough already. The problem is that the same company that can’t keep the lights on for the Super Bowl is also challenged to keep its nuclear fleet running smoothly.

Even without news of the Super Bowl outage, UBS issued another report  about the shaky financial future of Vermont Yankee. The report states:

“We continue to believe Entergy is likely to decommission at least one of its units, such as Vermont Yankee, in 2013. We anticipate the process of decommissioning will become of greater importance to Entergy shareholders, as concerns around shareholder-financed contributions to decommissioning funds continue to garner concern.”

The financial outlook looks bleak. Meanwhile, next week hearings begin at the Vermont Public Service Board about Vermont Yankee’s future. Entergy has money to keep four law firms employed working on the case. That money would be better spent closing the plant and cleaning up the site.

Vermont keeps working on better ways for people and goods to get where they need to go. The threats from climate change and the high cost of maintaining our travel ways mean we need to be smarter and greener.

In 2011 Vermont’s Governor Peter Shumlin announced that the Circ Highway – an expensive, polluting and ill-conceived highway project outside Burlington — would not be built as planned. In its place a Task Force would work on solutions that won’t bust the budget or foul our air and water.

Over the past year a good part of that work looked at targeted improvements in the immediate Circ area. The result is a study of the network . With this are recommendations that were just adopted by the Task Force to move forward with making improvements to some existing roadways in and around Williston.

A public meeting will be held on Tuesday, February 5, 2013 from 7:30 – 9:00 PM at Williston Town Hall, with a presentation of the findings of the study and the recommendations. The meeting is hosted by the Williston Planning Commission. Refreshments will be served.

CLF has been mostly pleased with this work and encouraged that new and more effective solutions are moving forward. As we noted in comments to the group, a bigger role for transit and roundabouts could cut costs and pollution further.

Come learn about new projects and let the transportation officials working on these projects know what you think.