VERNON—What does fossil-fuel stock divestment have in common with the closure of Vermont Yankee?
Three state senators claim the answer is simple — bad government.
Sens. Dick Mazza, D-Grand Isle; Robert Starr, D-Essex/Orleans; and Peg Flory, R-Rutland have penned a letter sharply criticizing Gov. Peter Shumlin’s push to divest the state’s pension fund from investments in coal and ExxonMobil stocks.
In doing so, they draw a straight line from divestment to the state’s — and Shumlin’s — long-standing, staunch opposition to the now-shuttered nuclear plant in Vernon.
“We seem to be falling short, in some important areas, of the open, pragmatic, good-governing Vermont that we all know and love,” the senators wrote. “Recent issuances from Vermont’s government have overridden fiduciary responsibility and due process in favor of special interest campaigns and political gestures.”
In response, Shumlin spokesman Scott Coriell said the three lawmakers — two of whom are Democrats — are “Republican senators” who “want to join their national counterparts in denying global warming and efforts to combat climate change.”
“It’s not surprising that those senators who were on the wrong side of history when it came to Vermont Yankee are once again on the wrong side when it comes to divestment,” Coriell said.
Divestment has become a key issue for Shumlin in his final year in office, with the governor declaring in last month’s State of the State address that “the urgency for us to take every sensible action against climate change has never been greater.” On Feb. 23, the governor took his case directly to the Vermont Pension Investment Committee, arguing that dumping coal and ExxonMobil stocks makes both environmental and financial sense.
“It is about Vermont using our power as an investor to put pressure on coal companies economically, and to protect our pensioners from holding securities that have a bleak future,” Shumlin told committee members.
The pension committee agreed to form a six-member subcommittee to look more closely at divestment. But there has been pushback on Shumlin’s proposal, most notably from Vermont Treasurer Beth Pearce, who worries that quick divestment could inflict financial losses on the state’s pension fund.
Sens. Mazza, Starr and Flory quote Pearce in their letter, and they make clear they are no fans of the governor’s divestment pitch.
“While the proposal might have the semblance of tackling ‘big issues,’ by making a ‘statement,’ it sadly boils down to lost returns and no measurable impact (on) the fossil fuel industry or climate change,” the lawmakers wrote. “We need a practical approach to governance in Vermont that puts the taxpayers, retirees, employees and their families first.”
To bolster their argument, the senators reach back several years to the debate over Vermont Yankee’s continued operation.
Though plant owner Entergy has since cited economic reasons in its decision to close Vermont Yankee at the end of 2014, questions about the plant’s safety and environmental impact dominated the debate at that time.
The senators wrote that, “in 2010, the Senate, led by then-Senate Pro Tem Peter Shumlin, prevented the Vermont Public Service Board [PSB] from ruling on Vermont Yankee’s application to continue to operate.”
“We three, along with then-Sen. Phil Scott, alone voted to let the PSB rule,” the letter says. “Then, as now, we believed in the importance of due process.”
The lawmakers see a direct connection between the Yankee debate and divestment. “It is ironic, to say the least, that Gov. Shumlin is now invoking carbon reduction as a reason for short-cutting the due process of our pension fund investment system,” they wrote. “For 42 years, Vermont Yankee was an in-state goldmine of very low-carbon electricity.”
Along with the loss of hundreds of Vermont Yankee jobs and millions in tax revenue, “the eventual, unfortunate decision to close Vermont Yankee has now increased the state’s carbon footprint, as Vermont uses more fossil fuels for energy generation,” the letter says.
There have been recent reports contending that New England has seen increased carbon emissions and has been increasingly reliant on natural gas — a fossil fuel — since Vermont Yankee’s closure.
But Coriell called the senators’ carbon-footprint contention “fiction.” He argued that Vermont has come a long way since 2011, when the largest power generator “was an aging, leaking nuclear plant.”
“Five years later under the governor’s leadership, we’ve increased by 10 times the number of solar panels in Vermont, and wind generation by 20 times,” Coriell said. “During peak demand, solar power has now replaced Vermont Yankee as the largest power generator in our state, according to VELCO [Vermont Electric Power Company].”
Coriell reiterated some of the problems at Vermont Yankee, from the tritium leak several years ago to this month’s reports of contaminated water temporarily stored in plastic swimming pools. “I’m not sure I’d call that a goldmine of anything but bad news,” Coriell said.
Joining the defense of the governor’s Vermont Yankee and divestment policies was Sen. Jeanette White, D-Windham. While acknowledging that nuclear-power generation “has a small carbon footprint,” she doesn’t entirely buy her colleagues’ contentions about the plant’s benefits.
“The mining of the uranium has a very high carbon footprint; the transport of that uranium has a high carbon footprint; and the waste from the spent nuclear rods has an impact that is hard to measure,” White said. “And while (Vermont Yankee) may have been a ‘goldmine’ for Vernon and somewhat to the (state) education fund, it certainly is proving not to be a lasting goldmine as we see attempts to not provide the funding for emergency services and a decommissioning fund that is entirely inadequate.”
On divestment, White said Vermont has been directly impacted by climate change. She believes fossil-fuel stocks could be dropped gradually, with that process being closely monitored by the Vermont Pension Investment Committee and the legislature.
“No one is suggesting that we should deplete the funds or harm the retirees,” White said. “But when we hear that green funds are doing better and fossil fuel funds are beginning to drop (in value), we think that this is a reasonable way to invest.”
Caught in the crossfire over the senators’ letter is Lt. Gov. Phil Scott, who is in the midst of a Republican candidacy for governor. The letter mentions Scott several times and praises his leadership, and Coriell seized on that theme.
“If the lieutenant governor, who wants to be governor, wants to stand up for the coal industry, which has been polluting our air, poisoning our rivers, and driving climate change, he should do it himself, not hide behind an op-ed written by supporters,” Coriell said.
The lieutenant governor’s chief of staff, Rachel Feldman, responded by saying Scott “did not have any connection to the (senators’) letter.”
As for Scott’s stance on divestment, Feldman pointed to a letter he sent last month to the pension investment committee. It consists mostly of eight bullet-pointed questions about the value of the state’s fossil-fuel stocks; the impacts of divestment; the possibilities of alternative investments; and the committee’s concerns.
“As lieutenant governor, it’s my responsibility to do my due diligence and learn as much about this proposal as possible so I can pass on what I’ve learned to Vermonters,” Scott wrote.