by John McClaughry
The highly popular Disney movie series Pirates of the Caribbean, starring the lovable rogue Captain Jack Sparrow, has captured the imagination of a new generation, as Errol Flynn and Burt Lancaster pirate movies did half a century ago.
In Montpelier a similar but less appealing series has been playing for the past several years. Its current lead character is the less lovable Captain Pete Shumlin. Now he and his crew are deeply engaged in a scheme to loot millions of dollars from the people of the state.
Captain Pete is far more devious than the earlier generation of swashbucklers. Instead of boarding treasure ships to take their chests of gold, Captain Pete has a penchant for relieving people of their money in ways that they are far less likely to notice.
Also, Captain Pete isn’t in the piracy game to enrich himself. He wants to collect the gold to underwrite the ventures of his favorite cause, the renewable industrial complex. But straightforwardly taking the money from people at sword point produces resistance. So Captain Pete has concocted all sorts of devices to relieve Vermonters of their money without letting them know what is being done to them.
For a decade Vermont’s Captain Petes focused their piratical urges on a non-voter, Entergy Nuclear. They extracted millions of dollars from the company in return for permission to produce more electricity, and to store spent fuel rods on its own property.
The prime beneficiary has been Captain Pete’s Clean Energy Development Fund. This body, created in 2005, was charged with passing out the revenues collected from Vermont Yankee to a variety of renewable energy projects, all in the name of making Vermont a world leader in combating the Menace of Global Warming. Notable among these are tax credits – later outright grants – to upscale homeowners who install expensive solar electric systems.
But with Vermont Yankee now free from further extortion by Captain Pete, the Fund will quickly run out of money to distribute. That would require the renewable energy purveyors to sell their products in a competitive market where, unsubsidized, they are simply not competitive.
Since most of the money raising schemes promoted by Captain Pete during his Senate leadership have fizzled out – the $150 surtax on the purchase of minivans, SUVs and pickup trucks, the “heating fuel savings charge”, the “unanticipated revenues” tax on nuclear electricity, and the cap and trade plan come to mind - the desperate search is on to find something, anything, to continue funding the CEDF.
Captain Pete’s mates in the legislature have ginned up one solution: force Vermont’s utilities to buy lots of renewable electricity at four times the market price (“renewable portfolio standard”), or pay the value of any carbon credits required to cover a shortfall into – yes! - the Clean Energy Development Fund. This is contained in Rep. Tony Klein’s H.468, now before the Senate.
But that’s complicated and uncertain. The ingenious Captain Pete has a better idea. In 2001 the Public Service Board allowed a struggling Central Vermont Public Service Company to raise its rates, but on the condition that if the company were sold, ratepayers would receive a rebate of (now) $21 million.
Now CVPS is being sold to Gaz Metro of Montreal, and will be merged with Green Mountain Power. Captain Pete and his Department of Public Service are the leading cheerleaders for this acquisition.
But Captain Pete doesn’t want Gaz to have to dribble out $21 million by “sending back small checks to people we can’t find”, and has denounced – no other verb seems adequate – “quibbling” over the matter. All those little ratepayers don’t need the money! The renewable industrial complex needs the money! Don’t quibble with Captain Pete!
This intricate – some might say underhanded – scheme was brilliantly explained by Rep. Oliver Olsen, here, on Vermont Tiger. Concludes Olsen, “After forking over more money in our rates to pay for these [mandated renewable energy] investments, we get the ‘benefits’ and they [Gaz] keep the money…In effect, it’s a clever way of raising revenue to fund state programs that came up a little short in this year’s budget. In other words it’s a hidden tax.”
Of course it is. Worse yet, it’s a tax designed not to help the poor, sick and struggling. It’s a tax to benefit Captain Pete’s cronies who will wax fat while ratepayers forego the rebate and pay higher electric bills to boot.
Maybe someday someone will make a modern pirate movie about this misadventure, hopefully after all the parties to it have been (figuratively) keelhauled.
John McClaughry is vice president of the Ethan Allen Institute.