May 9, 2007

Vermont Legislative Leadership's Bad Tax Policy

Note to the President of Vermont Business Roundtable in response to her opinion piece published in the Burlington Free Press on May 8, 2007:

Kudos for your recent thoughtful and bold commentary in the Freep. I know it's difficult to walk a 'neutral' line with the Legislature and still satisfy your membership on myriad issues, but you (VBR) were right to speak out. For the Legislature to target one company to raise millions for an ill-defined energy efficiency initiative demonstrates the leadership's lack of integrity (Sen. Shumlin in particular). Hopefully, sounder minds and cooler heads will prevail in the final days of the session. Sadly, Vermont's growing reputation as a business unfriendly state is once again on display with this terrible proposal.

By tapping the far left discontent with nuclear power in Vermont and targeting Entergy for a confiscatory tax, Sen Shumlin has all but guaranteed the elimination of our lowest cost source of electricity in Vermont after 2012. Why would Entergy or anyone remain in the nuclear power business here? Of course, that suits many people despite the absence of a plan to replace Vermont Yankee's base load electricity.

Vermont is poorly served by this act, as you have clearly articulated, demonstrating that this Legislative leadership cannot be trusted by the business community.

"Here's your hat, what's your hurry?

Published: Tuesday, May 8, 2007
By Lisa Ventriss

Here's your hat, what's your hurry? That's the message behind Sen. Shumlin's proposal to tax Entergy/Vermont Yankee.

The roundtable agrees that global climate change is a serious problem that, individually and collectively, we must address. And we are on record as stating that we support state policy giving preference to investments in energy efficiency programs and renewable sources of generation as important and, arguably, the first steps we must take to reduce our carbon footprint. We also believe, however, that it is not realistic to rely on efficiency and renewables alone when existing contracts for Vermont Yankee and Hydro-Quebec expire and the state will need to procure power from conventional sources of generation.

To that end, we commend the Legislature for the important work it has done this session to address the problem of climate change. Funding of these programs remains the point of controversy, and Sen. Shumlin's proposal to levy a 35 percent gross revenues tax on Entergy/Vermont Yankee is not only poor energy policy, it is poor economic development policy.

We already know that nuclear energy is clean, reliable, and inexpensive; it represents 1/3 of our electricity supply; and the most aggressive renewable energy portfolio cannot approach replacing this base load power. Nuclear energy is one of the reasons we are the lowest carbon-emitting state in the union; it is the backbone of our portfolio. To levy a new tax on one corporation, Entergy, in effect showing them the door, is a shot across the bow of the business community in and outside of Vermont. It says, Vermont cannot be trusted.

As I talk to business leaders around the state who tell me that they are actively discouraging other national and international enterprises from locating here, I can only cringe at how these new headlines are being received.

We need Entergy/Ver- mont Yankee -- and all businesses -- to be profitable and committed to staying in our communities and our state. Not only is Entergy/Vermont Yankee the lynch-pin of the Southern Vermont economy, but it pumps $80 million into the state's coffers. If Entergy were to leave Vermont, the new wounds we suffer will have been self-inflicted. Not only will the reliability and cost of future energy supply be in question, but also the state's effort to further reduce our carbon footprint. And, most discouraging of all, our children's future employment and quality of life choices will deteriorate.

It isn't just a bad policy alternative; it's a dangerous one. We must work together to find an alternative funding mechanism for the efficiency programs that is fair, predictable and sustainable over time, one that does not adversely impact the negotiation of future power contracts or cast a shadow over Vermont's business climate.
Lisa Ventriss of South Burlington is president of the Vermont Business Roundtable comprised of 112 CEOs of Vermont's most active and committed businesses and employers. "

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