Emerson Lynn on Politics

A Bill With No Upside

Vermonters have the lowest energy costs in New England, an advantage that could come to a screeching halt if Vermont legislators this week approve legislation forcing Vermont Yankee to pledge $300 to $400 million into a decommissioning fund.
    Aside from the obvious – that the pledge could force Vermonters to pay more for their power – it has become an ugly political battle as well.  The crescendo came yesterday during a press conference in which Vermont business leaders were explaining the potential of the bill’s ill effects on Vermonters.  In a testy exchange afterwards, Senate President Pro Tempore Peter Shumlin called IBM’s John O’Kane a liar, which then prompted the governor to issue an apology to IBM, calling Shumlin’s behavior “inappropriate, unprofessional and disrespectful.”
    We’re pretty sure Mr. Shumlin would not make anyone’s first team when it came to assembling a troupe skilled in the arts of diplomacy or economic development. He was wrong to make the argument personal.

But it’s also easy to understand Mr. Shumlin’s frustration. This is round two in his battle against Vermont Yankee. He was the impetus behind the ill-fated proposal last legislative session that would have placed a tax on Vermont Yankee’s profits to pay for a proposed energy-efficiency program – an estimated $26 million. He lost, but returned this session with the decommissioning fund proposal; something that has already been approved by the Senate.
    His frustrations are political. He saw three key advantages with the legislation: first, he could claim that he was protecting Vermonters from future rate increases if the decommissioning fund was underfunded – something that he could trumpet to Vermonters sensitive to energy cost increases; second, it would give him considerable influence in the expected debate next year as to whether Vermont Yankee’s license should be extended past the 2012 contract; and, third, he could crow about bringing a corporation to its knees.
    But Mr. Shumlin’s “advantages” are beginning to fade under the glare of public examination and the damage may extend to House Speaker Gaye Symington who has also bought into the politics of the Shumlin plan and who intends to have this legislation be part of her expected gubernatorial race.
    It’s Mr. Shumlin who deceives, not Mr. O’Kane. IBM does not participate in legislative events for the fun of it. It participates because it believes it will be affected. And IBM believes the proposed legislation will drive up its utility bill, which, in turn, could affect the viability of its Essex operation. IBM is the economic engine that drives a good share of the commerce in Chittenden, Franklin, Lamoille and Grand Isle counties. It’s a concern that needs to be taken seriously.
    Mr. Shumlin contends that the legislation does not mandate Vermont Yankee to actually pay the money up front, that the company also has the option of employing other financial guarantees, thus, Vermont Yankee would not need to raise rates.
    That’s completely disingenuous. Any financial guarantee must show up on the company’s balance sheet. It’s a liability. It’s an obligation that subtracts from the company’s financial strength. 
    It’s also a loaded gun being pointed at Vermont Yankee’s head. If Mr. Shumlin, et al, decide not to extend Vermont Yankee’s license, then Vermont Yankee could be forced to ante up the money. End of discussion. That’s a deal breaker. That was the thrust of Mr. O’Kane’s argument.
    What happens? Vermont Yankee shuts down Vermont’s lowest cost energy provider. We go to the open market to buy our power. Our bills go up. IBM’s $33 million a year energy bill goes up, and potentially a lot of jobs with it. Other businesses may face the same fate.
    We are debating the wisdom of this in the midst of a recession?
    Mr. Shumlin and Ms. Symington also deceive by suggesting that Vermont rate payers are at risk. Nothing could be further from the truth. They have paid in once, and will not be required to a second time. As has been said before, the Vermont Public Service Board has stated that any additional costs needed for decommissioning “will not be passed on to Vermont consumers.”
    Period.
    Thus, when supporters say they are protecting “our children, and our children’s children”, they are not, as is becoming readily apparent as the public becomes more aware of the issue.
    The legislation was approved earlier this week by the House Commerce Committee, along party lines.  Committee chairman Warren Kitzmiller was quoted as saying he really liked his job and that he knew “my leadership” would be “disappointed” if the bill did not emerge unscathed. Swanton’s Michel Consejo voted for the bill as well. In other words, the House leadership [Ms. Symington] told Kitzmiller to report the bill out of committee precisely as it was passed by the Senate. The committee’s Democrats lined up obediently and did as they were told.
    The legislation is scheduled to be brought to the floor for final debate this week, perhaps as early as today. We would hope that reason would trump the politics of blind obedience. And we would hope Legislators understand that this legislation puts Vermonters at risk. If it becomes nothing more than an issue of politics, then legislators should also understand that they put their own political futures at risk by voting for legislation that will raise utility bills and chase jobs from Vermont.

Emerson Lynn is editor and publisher of the St. Albans Messenger where this essay first appeared.

Comments

[James Laughead]

I would like to see a line and staff structored diagram of Vermont Yankee, to understand what is going on with this operation. I thought this was sold to a Canadian operation. To me a picture or a diagram is worth more than a 1000 words.

[Jack Harding]

Emerson Lynn just came as close as he has ever been to calling anyone a liar when he said Mr. Shumlin and Ms. Symington "deceived" and were "disingenuous". As an unbiased and thoughtful spokesperson for the real interests in this state it is disgraceful that the self aggrandizing leadership of the democratic party force a man of Emerson's integrity and respect to even come close to the edge of the cesspool in which these two liars(I'm not Emerson) wallow.

Emerson, thanks for using your perch to defend Mr. O'Kane and chastising Caesar Shumlin and his clueless accomplist from the Commerce Prevention Committee.

Mr. O'Kane, as a Vermont taxpayer I would like to apologize to you on behalf of our incompetent state leadership who have proven they do not understand how to support and thank the state's largest employer, they have no knowledge of finance or accounting, they are willing to cost thousands of families their jobs to support a personal ideology they refuse to publicize ("We hate business and capitalism") and are, in fact, liars.

Emerson says Mr. Shumlin's frustration is understandable. Perhaps it is understandable from a Socialist who was humilaited during his last attempts to destroy Vermont Yankee. However, it is in no way understandable from an elected legislator. If anyone thinks that higher electric bills alone will put a headwind on this state's economy then buckle up for the tsunami when IBM calls it quits in Vermont.

I have written this several times now and will say it again; every indicator is that IBM is getting out of the microelectronics business and Burlington will be the first to be sold or shut down. Our "leadership" in Montpelier need not provide them any more reasons, like doubling their electric bill, to call it a day.

Governor Douglas understands the stakes of the game being played and he must, once again, throw his full political capital in front of the train that could destroy what is left of Vermont's failing economy.