As the debate over Vermont’s energy future moves ahead, it is imperative that the public debate – and the resulting decisions – be based on a full analysis of the most current information available. The recent paper issued by Vermont Public Interest Research Group (VPIRG) sets out an ambitious vision, but fails that most basic of tests and threatens to create unrealistic expectations and promises. VPIRG would like Vermonters to believe that Vermont Yankee power can be replaced with renewable energy at a lower price, but while this may sound appealing, it is simply not true.

Most significantly, VPIRG’s estimates of the cost of renewable energy are not supportable. For example, VPIRG indicates that Vermont Yankee could be replaced with renewable energy costing 7.3 cents per kWh. Market prices for renewable energy projects are significantly above 7.3 cents per kWh, even when looking at the least expensive, large-scale renewable projects. VPIRG, along with multiple other organizations across the state and the legislature, recognized that most new renewable energy sources cost more than market power when it supported the standard offer passed during this legislative session, which sets rates for smaller renewable resources that range from 12 to 30 cents per kWh.

VPIRG also claims investing in renewable resources will result in electricity “delivered at 1-3 cents per kWh because they have no fuel costs.” While it is true that renewable projects can be priced stably over the long term because the fuel is free, renewable energy technologies are very costly to build – in fact, up-front capital accounts for the bulk of the cost of most renewable projects. These large capital costs need to be accounted for when comparing costs of Vermont Yankee and alternatives. The all-in price of most renewable resources will, in fact, be much closer to 10 cents per kWh or higher.

Because Entergy and the utilities have not reached agreement on future pricing of Vermont Yankee power, it is impossible for VPIRG to estimate what may be future VY prices. And, it is academic, because an accurate analysis of renewable energy costs shows that renewables are more expensive than even the highest estimates of what Vermont Yankee might cost. VPIRG’s conclusions about replacing Vermont Yankee with renewables are just not based on facts but are, frankly, simply wrong.

To be clear, every frugal Vermonter understands that cost-effective energy efficiency programs should be the first response in our attempts to keep electric costs down, and pretty much everyone wants to see more renewable energy in Vermont’s mix. But it will take time to build new renewable generation in the state. Keeping Vermont Yankee running can offer a cost-effective, low-carbon power source while renewables are built, assuming Entergy offers utilities value in a new contract.

The Roundtable supports a diverse electric energy supply that is clean, reliable and competitively priced;and this includes renewables as well as nuclear sources. Today, thanks to clean energy development, namely, Hydro-Quebec and Vermont Yankee, Vermont boasts arguably the most carbon-free power portfolio in the country, and with rates that are the envy of the region. In recent years, our electric rates have become the lowest in the Northeast, while our power production produces a fraction of the greenhouse gases of other states. At the end of the day, it is important that the state’s decisions about future electricity supplies be based on an informed, accurate and complete analysis that takes into account the real costs and characteristics of power available to the state. Vermonters deserve nothing less than that.

Compared to last year we are seeing about the same volume of travelers but spending levels have declined. Vacations are still a high priority, especially for families, but vacation budgets are lower. Every consumer has become a negotiator looking for the best deal. There remains a fair amount of financial fear despite signs of a recovering economy.  When the job market recovers then consumer confidence will return and our industry will see an upswing. The bottom line? Consumers will continue to travel with smaller budgets and industry growth will return as jobs grow which in turn will mean revenue growth for Vermont.

Question #2: All businesses across industry and geography have had to make concessions and reduce expenses to weather the economic storm. What has been the area in which you’ve chosen to invest during this time period, and why?

Almost all business is re-trenching in one form or another. We have reduced capital spending in favor of protecting jobs to the greatest extent possible. Our business is essentially a people driven service business and when the economy turns around we want to be sure our best people are here to help the business and themselves enjoy new growth.

Question #3: You have been in leadership positions with a large number of non-profit organizations in recent years including, among others, Vermont Public Television and the Vermont Chapter of the Nature Conservancy. What is it about the Roundtable that prompted you to accept a leadership role as board chair and invest your personal time and energy?

Before accepting an invitation to join a non-profit organization I have a number of criteria I employ to help my decision.

First I have to believe in the mission.  The Roundtable’s Mission to “Making Vermont the best place to  do business, be educated, and live life” was easy to buy into as I have a Vermont education, am a Vermont business owner and do not want to live anywhere else.

Second, I evaluate the staff leadership and Board membership. Both have been outstanding over a long period of time at the Roundtable.

Third, I ask questions about the reputation of the organization with a focus on ethical behavior. VBR passes with flying colors.

Fourth, I try to evaluate whether or not the organization really is capable of making a difference to the well being of Vermonters.  Again, VBR passes with flying colors.

Finally, I never join an organization without the intent of committing time and effort to making a personal contribution to the goals of the enterprise.

All of the above made the decision to accept the honor of Chair an easy one.

Question #4: You have been a strong advocate for public investment in pre-K education in Vermont, in fact, it was a major recommendation from the Roundtable’s “Courage to Change” task force that you chaired. What would you say to other business leaders who may be skeptical about investing dollars at this end of the education spectrum?

I believe pre-K education is an integral part of a much bigger picture of a healthy future for Vermont.  Making Vermont a great place to live includes respect for one another including meeting the social needs of our Vermont society. We cannot take care of these needs without strong state revenues and we cannot and should not raise taxes. The best way to raise tax revenues is to raise personal and business income. The best way to raise income is through a highly educated and motivated work force to both attract jobs to Vermont and help companies grow who are here now. The best long term way to ensure a vital workforce is through a vital education system that is designed to start early in the child’s life to build the child’s knowledge base as well as create an understanding of the value of education.

I strongly believe that we must think of pre-K educational investment in the same way as a business evaluates a capital investment.  We must put money “up front” to gain the long-term benefits. There is ample evidence that children given an educational head start tend to stay in school and go on to higher education and that fits perfectly in the system of making Vermont a great place to do business, be educated and live life.

Question #5: The winter season is long and the conditions can be harsh. How do you motivate your senior leadership and front line staff from November to March?

First we must hire people who have a “love of chaos!” and know how to celebrate success as well as cope with frequent challenges. Second, once hired, everyone has to know that they are respected, from the night janitor to the president. Third, the main business objectives must be regularly measured and all concerned must be given feedback. Fourth, the reward system must be fair and as generous as possible. Fifth, Management must be open and accessible and participative. Sixth, Fun, Fun, Fun!! Develop and live this attitude in all seasons.

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The Task Force will not only update the Roundtable’s position on tax policy, but will exercise its educational mission and conduct an awareness campaign throughout the state around the structural fiscal issues plaguing Vermont.  Also, it will serve as a resource to the Blue Ribbon Tax Commission that was created by the legislature this past session, and which is chaired by Roundtable Member Emeritus, Bill Schubart. The commission has been charged to investigate structural issues in its first year and tax expenditures issues in the second year, with deliverables by January of 2010 and 2011, respectively.

During the period 1991-2001 the Roundtable published five different reports on tax and fiscal policy. These reports are available on our website at http://vtroundtable.org/article/view/19096/1/3358 .

Mary Powell, President and CEO of Green Mountain Power, and Tommy Harmon, President and CEO of Sonnax Industries, were elected to the Board of Directors by the members at the Roundtable’s summer meeting on June 18th.

Powell brings over 20 years of comprehensive experience in all aspects of business management, extensive experience in executive level leadership, business ownership, operations and human services. She joined Green Mountain Power in 1998. (Green Mountain Power’s website)

Harmon joined Sonnax in 1996 as the Chief Financial Officer and for the last five years has served as the Chief Operating Officer where has has been an integral part of the company’s strategy and growth. (Sonnax’s website)

2009 Vision Award presented to Fred Hackett

In creating the Vision Award, the Roundtable Board of Directors wished to make a statement by honoring the lifetime contributions of a leader who shares a commitment to the ideals that are embedded in the Roundtable’s vision statement “to make Vermont the best place in America to do business, be educated and live life.” In 2007 the Roundtable presented the award for the first time to Mr. David Coates, retired Managing Partner of KPMG.

The Vision Award celebrates the long view; the contributions of an individual over a lifetime that have benefited the people of Vermont. In this year, the Roundtable recognizes Fred Hackett, a humble man of unique moral character, significant accomplishment, and universal respect.

If you asked Fred to describe himself, he would say that he is simply a sixth-generation Vermonter, who happened to have had the opportunity to work with a lot of other folks to make Vermont better. Fred is known by many of his friends as one who would rather work than relax.  His interpretation of “work” is that it’s not work at all, but fundamentally an activity that allows him to engage with other people for the achievement of common goals to improve upon what already exists.

Fred’s life has been highlighted by service: to country and community, in business, politics, higher education, and the non-profit sector. Within the Roundtable, Fred served on the first steering committee to create a board of directors. He has led the development of numerous initiatives aimed at setting the public agenda on investments in higher education, the creation of infrastructure to support technology transfer, and new job creation. He has been an advisor to governors, and a statesman who works quietly behind the scenes to “achieve a common goal”. And, Fred has been lauded for his leadership on economic development and community service at the local, state, and national levels.

So it was with great pride that, at its Summer Celebration dinner in June, the Roundtable bestowed its Vision Award on Fred Hackett, Chairman and CEO (retired) of Hackett Valine and MacDonald.