Vermont generates some electricity from in-state hydropower at a much smaller scale than Hydro-Quebec. Photo: Vermont Department of Environmental Conservation.
President Trump signed executive orders on Saturday February 1st that would have imposed tariffs on imports from Canada, Mexico, and China. Those tariffs were set to go into effect on Tuesday, February 4th, until Canadian and Mexican leaders reached agreements to postpone the tariffs for 30 days. Before they were postponed, Vermont was about to–and still could–experience 25% tariffs on goods from Canada and a 10% tax on energy imports from Canada, including electricity and natural gas. The potential impacts of a tariff on goods imported from Canada are obvious, as Canada is Vermont’s largest international trading partner. These tariffs also raise important questions about where Vermont’s electricity comes from, and how we can be more resilient in the future.
25% of Vermont’s Electricity Comes from Canada
As one of the world’s largest hydroelectric producers, Hydro-Quebec operates 63 hydropower stations and 28 reservoirs. Vermont first signed a long-term contract with the company in 1987, following the establishment of an interconnection between Hydro-Quebec and the Vermont electric grid. This connection was made via a 15-mile transmission line running from the Bedford substation in Quebec to the Highgate substation in northwest Vermont. Hydro-Quebec has an agreement with Vermont to supply approximately 25% of the state’s annual electricity needs through 2038. As a result, Canadian hydropower accounts for about a quarter the state’s electricity portfolio, if not more, according to Vermont’s Department of Public Service.
Whether a tariff on Canada would impact Vermont’s contract with Hydro-Quebec is still an unknown and is a question that has utilities like Green Mountain Power (GMP) and Vermont Electric Coop (VEC) worried. VEC supplies electricity to Northern Vermont and gets over 40% of its electricity from Hydro-Quebec. According to VEC, If the cost of this power supply were to increase by 10 percent it would cost their members in the range of $2 million this year, which would equate to just over a 2 percent increase over current rates. GMP has estimated that Canadian tariffs would add $16 million per year in power costs, which would then be transferred to ratepayers.
Is Canadian Hydropower “Renewable?”
Hydropower might seem like a perfect renewable source of energy, however it still has large carbon impacts. Hydro-Quebec relies on massive dams that store and release water covering hundreds of square miles of forested land. All the flooded vegetation covered by water slowly decomposes, releasing carbon dioxide and methane–an especially potent greenhouse gas. This means that Hydro-Quebec’s hydropower electricity still results in fossil fuel emissions.
Vermont is the only New England state that allows utilities to meet their renewable energy requirements with electricity generated by hydropower. In the past legislative session, lawmakers passed Act 179: Vermont’s New Renewable Energy Standard. This act requires that utilities increase the percent of their electricity produced in-state, and creates a new requirement for utilities to purchase new renewables like offshore wind. Importantly, new large hydropower and expansions of existing large hydropower are not counted as new renewables. Going forward, utilities will have to increase the number of new renewables brought online to meet requirements, and cannot rely on hydropower.
Local Renewable Energy
There are many benefits to increasing locally generated renewable energy. More local energy means less reliance on other states and countries, and the guarantee that we are supporting the creation of new renewables, not just buying the renewable energy credits from a faraway solar field or wind farm. Vermonters will be able to know and see where their energy is coming from. This is an important change compared to our current system, which relies on 64 baseload fossil fuel plants that supply a constant minimum level of electricity to our grid. None of these plants are in Vermont, and of the 64, 62 are located in communities with a higher-than-average share of low-income households, people of color, or children under the age of 5. By increasing locally generated renewable energy, Vermont can reduce its contribution to this inequity while taking greater responsibility for its own energy production.
