Override of energy bill veto unlikely
By LOUIS PORTER Vermont Press Bureau | July 08,2007
MONTPELIER — Even to some supporters, it seems unlikely there will be enough votes in the state House of Representatives to pass the energy bill – the most controversial measure of this year's legislative session – into law over Gov. James Douglas' veto.
But lawmakers are holding out hope that by the time the final gavel falls on Wednesday's special veto session a compromise proposal will make it into law.
The wide-ranging energy bill, H.520, includes measures that encourage wind power development and the installation of solar panels. It strengthens standards for energy efficiency in commercial buildings and allows the potential for variable electricity rates to encourage consumers to conserve power.
But the heart of the bill — and the center of Douglas' objection to it — is an efficiency program to reduce the use of heating fuels. Douglas says he opposes the program because it would be funded in part through a tax increase on the Vermont Yankee nuclear power plant in Vernon. He also says the structure and scope of the program have not been adequately defined.
Lawmakers, led by Senate President Pro Tem Peter Shumlin, D-Windham, have offered to put off a vote on the tax increase until January, provided the state moves forward on setting up the heating program. That program is modeled on Vermont's electricity efficiency program, Efficiency Vermont.
No dice, administration officials said.
"The tax has to come completely off the table," said Jason Gibbs, a Douglas spokesman. "They have got to take this bureaucracy off the table."
The rhetoric from both sides has heated up as the administration and Shumlin have become locked in a public argument over who is more serious about reaching a compromise on the legislation, which is designed to reduce global warming pollution and boost economic development in Vermont.
"He is obviously not serious about reaching an agreement," Gibbs said of Shumlin.
The head of the Senate, meanwhile, said that Douglas is out of step with Vermonters' values and is unwilling to take the issue seriously.
"I fully expect by the time we get up there, the governor will have accepted our proposal for H.520," Shumlin said.
Meanwhile, key players on both sides are working to see if there is a way to reach a compromise because even some of the bill's supporters believe a veto override is unlikely.
"Having the votes for a veto override is an uphill challenge," said Rep. Robert Dostis, D-Waterbury, chairman of the House Natural Resources and Energy Committee. "I am more interested in finding a bill we can all support and move through the House on that day.
"The provisions that are contained in the bill that will help us reduce our use of energy, create jobs and encourage economic development are key," he said.
One avenue of escape from the deadlock could be so-called "forward capacity payments" expected to be made to the state's electricity efficiency program by the organization that administers the New England power grid. Those payments are designed to encourage the development of new power sources in the region — and will go to Efficiency Vermont because of its role in reducing electricity use, Dostis said.
Between 2008 and 2012, those forward capacity payments are expected to be as much as $17 million — much more than was originally expected, he added.
Using that money to fund "all fuels" heating efficiency would make sense, Dostis said, though he said the Public Service Board, which controls Efficiency Vermont's budget, would have to approve the plan.
"It would be a very logical use of those funds given that Efficiency Vermont is already in homes and businesses finding savings in electricity," he said.
Rep. Joyce Errecart, R-Shelburne, a member of Dostis' committee and an opponent of the tax on Yankee, said there is a possibility that a compromise on the energy bill will be reached.
"I don't know if I would say I am hopeful but I am trying," she said. "There is room to negotiate if we can get past the ugly things that have happened in the last couple months."
Not only has each side loudly denounced the other, but there have also been accusations of intentionally derailing compromise talks.
"I am sure the veto will be sustained," she said. "Therefore we really should compromise because it is a very bad result to have the Legislature come home without doing anything about energy policy."
The issue has come to a head because lawmakers have been building momentum, making progress on energy policy issues in each of the last several years.
A real concern is that Vermont is being left behind as states like Connecticut and Delaware pass similar efficiency programs that address the use of heating fuels, said James Moore of the Vermont Public Interest Research Group.
"Vermont is missing out on economic opportunities because other states are passing the kind of clean energy legislation that will not only help the environment, but also support business," Moore said. "In Delaware and Connecticut they have put aside partisan concerns and addressed energy costs that consumers are facing. The governor hasn't been willing to do that, even when the Legislature offered a compromise."
Advocates for the bill say Vermonters stand to lose because they continue to spend more money on heating fuels, and they are missing business opportunities based on weatherization and energy efficiency efforts.
Even if a compromise in broad terms can be reached, crafting a new bill appears unrealistic. The lawmakers are expected to reconvene for only one day, and they have another complicated bill vetoed by Douglas — this one on campaign finance rules — to deal with that day as well.
In any case, overriding a gubernatorial veto is never easy — despite the Democrats' wide majorities in both the House and Senate. It takes two-thirds of those present to pass a bill into law without a governor's signature, and the override must pass the House floor first before it even reaches the Senate.
Since 1836 there have only been six successful overrides of 127 vetoes.
"I don't believe we will have the necessary votes to override," predicted Rep. Tony Klein, D-East Montpelier.
Now is the time to consider a compromise, given the importance of doing something soon, Klein said.
"Vermonters are going to lose out, and lose out big, if we don't keep moving forward," he said. But "you need two parties to talk to each other to reach a compromise. (Douglas) knows what we are willing to do. We need to know what he is willing to do."
Simple, Gibbs said.
"The thing to do is allow the Public Service Board to conduct a thorough analysis of how best to achieve the goals, and in the interim, implement the governor's program," he said.
And Shumlin and other legislative leaders must agree to jettison the proposed increase in the tax on Vermont Yankee's parent company, Entergy Nuclear.
At the end of the legislative session, Douglas proposed an alternative that would have used some state money to reduce the interest rates on private loans for Vermonters who wanted to weatherize their homes or increase the efficiency of their heating systems.
"I think he has some very worthy proposals. I wish he had brought them forward during the legislative session, and I will be pleased to consider them in January," Shumlin said.
As for giving up on reviewing the taxes paid by the nuclear plant, he will not do that — whatever the outcome on Wednesday — Shumlin said.
That is because — although the administration and the company vigorously disagree — the plant doesn't pay its share of property taxes, he said.
"Regardless of what happens with H.520, this discussion is going to continue," Shumlin said. "We stumbled upon a real inequity."
That is because changes made several years ago in how the plant is taxed have resulted in Entergy paying less than it would have based on its value, Shumlin said.
According to estimates by the Joint Fiscal Office — the financial office for the Legislature — Yankee paid $2.8 million into the general fund through the electrical generation tax and $2.2 million into the education fund in 2003. The Joint Fiscal Office estimates that the plant will pay roughly $2.8 million and $2.1 million respectively into those funds annually by 2008.
That is too little given the value of the plant – especially after recent upgrades made by Yankee, according to advocates for the additional Yankee tax.
Yankee officials have said that the changes in tax structure for the plant were made at the request of two governors — Democrat Howard Dean and Douglas, his Republican successor — to give the state predictability and stability in tax revenue. And the work done on the plant – including boosting power output and adding "dry cask" storage for waste – were anticipated when the deal was struck and automatically taken into account since the tax is based on kilowatt hour of electricity produced, according to Yankee.
Douglas has argued that increasing the tax on Yankee will raise power rates after 2012 and will damage the state's reputation and economic development.
"A tax on the Vermont Yankee Nuclear Power Station in Vernon sends a chilling message to our current and prospective employers at the same time we are seeking to support and strengthen job creation," Douglas wrote in his veto message on the energy bill. "In addition, policymakers have an obligation to honor the commitments of previous Legislatures and treat all businesses fairly and honestly."