Website:http://www.raponline.org

The Regulatory Assistance Project177 Water St.

Gardiner, Maine USA 04345Tel: 207.582.1135

Fax: 207.582.1176

50 State Street, Suite 3Montpelier, Vermont USA 05602Tel: 802.223.8199Fax: 802.223.8172

Vermont Power SupplyThe Very Big Picture

Windham Regional CommissionRichard SedanoApril 5, 2005

Introduction

Regulatory Assistance ProjectRAP is a non-profit organization, formed in 1992, that

provides workshops and education assistance to state government officials on electric utility regulation. RAP is funded by the Energy Foundation, the US EPA and the US DOE.

Richard Sedano was Commissioner of the Vermont Department of Public Service, 1991-2001, and presently serves on the Montpelier Planning Commission

Electric IndustryPolicy Goals

ReliableSafeSustainableEnvironmentally SoundConsistent

AdequateSecureEfficient (Fair)AffordableEncourage Economic Vitality

Keep These in Mind as You Listen to Speakers

Where we are – Undiversified, Committed with Efficiency

Vermont is different from New England

Summer 2003 MW

Very Commodity (Gas and Oil) Heavy

Vermont Year of Need: 2009

You are here

New England faces a gap around the same time

New England Year of Need: 2011

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New EnglandElectricDemandDemand + Reserve

GeneratingCapacity

Summer Growth Is Key to Forecast of Demand

MW

Load Center

New Projects

Added projects will be needed if load continues to grow

Natural Gas Cost UP!

http://www.naruc.org/associations/1773/files/david_biegler_agf_w05.pdf

The Crystal Ball on Price Is Foggy

Big spread

A Carbon Gap: What are the economic implications?

U.S. DOE EIA 2005 Annual Energy Outlook

1990 level

Efficiency is cheaper, avoids construction

Power Costs vs. Efficiency Vermont Costs for 2002 & 2003NE-ISO Average Monthly Price

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Cen

ts p

er K

illow

atth

our

EfficiencySavings:

1 cent/KWh(Jan 2002),more than

6 cents/KWh(Mar 2003).Currently

3.6 cents/KWh

Delivered Cost of Wholesale Power * Wholesale Spot Market Price Efficiency Vermont, Contract Commitment

DPS: "MAXIMUM ACHIEVABLE SAVINGS" FROM ENERGY EFFICIENCY

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h

30%(2175GWh)

Existing Policy

Potential

Customer Generation is Efficient

The US Status Quo

Challenges for VermontPower Supply ReplacementMaintaining environmental qualityLowering costs

Pressure on low income customers due to higher energy costsPressure from large businesses due to prevailing rates

Vermont Yankee specific issues (fuel, license)Wind sitingPlanning to integrate power, efficiency, and transmission

Vermont Yankee: Getting Used to Entergy

Spent FuelFederal PromiseJurisdiction

Safety, environment

Connection to Vermont Clean Energy ChoicesNose under the tent to license extensionUprate accelerates need

License ExtensionAgingExperienceSpent FuelNeed for Power

Climate changealternatives

WindA contributor to energy solution

Not correlated to fossil fuel price, supplySystem benefitsNo carbonDeclining costLocal

Reasons to Pause (assume all ecologyissues solved)

Cost-benefit considering aesthetics

Offshore would be better site?

At high deployment (20%) system issueResulting development

Degree of Control of Vermont’s Destiny

What can Vermont do?Developing in-state resources driven by planning

Efficiency to put the breaks on load growthClean, small scale and customer-sited generationWind, to the extent it meets other objectivesBy the way, this brings economic growth for Vermont

Reduce need for new power linesContinue significant use of long term contracts

“Control” not the issue, rather external forces risky