Fractals of Change

How Much Stimulus Money Has Reached Vermont?

As of June 24, Vermont state government had posted actual cash receipts to its coffers of $74,846,608 from the federal government of funds authorized under the American Recovery and Reinvestment Act (ARRA aka the stimulus bill). This does not count stimulus money which does NOT pass through state government such as Pell grants to individuals attending college, grants made by the Small Business Administration to businesses, and tax cuts and credits to individuals and businesses (does not collecting money count as an expenditure?).

To put this in context, over the life of ARRA, generally two years, the state should receive about $720 million in grants which are allocated to us under various formulae in the stimulus bill (and which we get as long as we jump through the right hoops in the right order and account for it properly). We also hope to get $200 million or more in competitive grants under various stimulus programs. Nationwide ARRA is supposed to spend $787 billion.

The bulk of the money state government has actually received has gone to human services - almost $71 million largely for help paying Medicaid benefits. Just under $5 million was received for transportation projects (these are posted monthly so this number is as of the end of May).

More stimulus money has been spent in Vermont than has been received. This doesn't indicate a problem, however; in most cases you have to spend money in federal programs before you are reimbursed for the expenditure. Washington doesn't want us earning interest on "their money".

Which brings up the interesting point of whose money is this anyway. A commenter on Vermont Tiger, where some posts from this blog are reposted, wrote: "Same old tripe repackaged to hide the smell. "We must compete for and win grants" [this quote is from me] translates into OPM [other people's money], for grants are nothing but tax dollars. If it such a good idea, invest your money for a healthy return."

ARRA money is anything but OPM; it's our tax dollars or money that was borrowed in our names or our kid's names. It would be negligent not to bring as much of it as we can use responsibly back to Vermont ; it's even worse if we don't spend this money well. We have to spend it like it's ours because it is.

There is a reasonable argument that this money (and lots of other money) would be better spent if it hadn't made a round trip to Washington, where a fair amount is lost in the handling and from where it comes back in categories we might not have chosen ourselves and with restrictions we would not have placed on ourselves. Our job in the office of Economic Stimulus and Recovery, however, is to deal with ARRA as passed by Congress and assure that it is as constructive for Vermont as it can be. We have a lot more cash yet to come. You can use recovery.vermont.gov to judge whether your money is being used well.

The Smart Grid Opportunity in Pictures

Save money, protect the environment, achieve greater energy independence, create economic opportunity – these are the promises of a smart electrical grid.

Is this too good to be true? Look at the pictures below from ISO New England, the grid system which Vermont belongs to.

The top graph is called a load curve. It shows that we New Englanders, like people everywhere else, sometimes consume a lot more electricity than we do at other times. 10% of the time we have meters spinning at over an 18 gigawatt rate at the high end; During the low 10% of the time we consume at less than a 12 gigawatt rate. This by itself would be no big deal until you look at the difference in price per megawatt hour between the heavy use and the low use times – above $100 megawatt hour (except this year) during the high and less than $40 megawatt hour in the lull. The highest prices are over $200 and the lowest near zero.

[cheat sheet: if you light a 100 watt bulb for 10 hours you consume 1000 watt hours or one kilowatt hour (kwh). At retail we pay about $.16/per kwh here in Vermont. 1,000 kilowatt hours are a megawatt hour (mwh). Utilities buying electricity wholesale buy it by the megawatt hour. $100 per mwh is $.10 per kwh; not surprisingly, wholesale rates are lower than retail. 1,000 megawatt hours is a gigawatt hour. Now you know.]

Notice now that the price graph is pretty flat except at the ends while the demand curve is much more slanted. At the ends, price varies much more dramatically than demand. What's going on is that both the fuel and the capacity used to produce "extra" electricity during periods of peak demand are expensive. Here in New England we usually use natural gas for peak power in plants which run only a fraction of the time. BTW, the low price of natural gas this year explains why peak costs in 2009 (red) are so much lower than in 2008 (yellow).

At the low end you can't really turn off a nuclear plant for the night or completely shut down a hydro plant. Sometimes it's literally necessary to give away surplus electricity.

So one smart grid opportunity is to incent and enable consumer to move their use from the left end of these charts over to the right. The more we level out our use, the cheaper the total bill. Sometimes a peak price lasts for only a few minutes; a refrigerator, for example, can safely be turned off for a little while (the process has to be automated to be practical). Cheaper power late at night than during the day is predictable; electric storage heat can and is created off peak. Some day that's when we'll charge our plugin hybrid electric vehicles and electric lawn mowers.

Another smart grid opportunity is incenting generators of renewable energy to make more supply at peak times. For wind or solar, this requires some form of storage like batteries, but the extra cost may be worth the extra revenues. With hydro power, if there's sufficient impoundment space available, water can be stored until power is needed.

It's all about flattening the curves.

There's more on the components of the smart grid we hope to build quickly in Vermont with stimulus money at http://blog.tomevslin.com/2009/03/whats-a-smart-grid-and-why-does-it-matter.html.

The Most Popular Stimulus Funds Are Gone

"We have a great library project shovel-ready," the lady from Morristown told me. It was my second day on the job as Vermont's Chief Recovery Officer; I asked her to tell me about it. "Repaving projects don't put carpenters to work; our construction project will." She was right, of course; but Morristown didn't get any money from the American Recovery and Investment Act (ARRA or the stimulus bill) for its library (but there are other ARRA-funded projects in and near Morrisville).

There is no specific program in ARRA for libraries. But Vermont did receive a two year allocation of $17.1 million which it is free to use for any government service. The Morrisville library would have been eligible for this money – known variously as the discretionary part of the State Fiscal Stabilization Fund (SFSF) or the General Services Fund (GSF). So would the lists of building and rehabilitation projects submitted by the University of Vermont, the state colleges, the hospitals, and some towns and school districts. People in my home town of Stowe hoped to use GSF for its long-sought and already-permitted hockey rink. The Preservation Trust listed over $27 million of shovel-ready projects on their website. There were at least $200 million of request for this money. It was obvious that most would be disappointed and, of course, they were.

Different states have different procedures for appropriating federal funds. Here in Vermont they are appropriated by law, not by the Governor unilaterally. Governor Douglas proposed spending all $17.1 million on economic development, mostly through the Vermont Economic Development Authority (VEDA). State money invested in VEDA attracts private funds into the same companies, and the hope was that the as much as $160 million would actually have been available for Vermont businesses as a result of this allocation.

The budget passed by the Legislature over the Governor's veto appropriates only half of the money, $8.5 million, for the State's fiscal year 2010 which begins on July 1, 2009. The rest remains to be appropriated next year.

$4.4 million was appropriated to the Public Safety Department. Since no new programs were created with this money nor any new positions created, this money is being used as a stop gap to lessen Vermont's budget deficit problem.

$2.15 million will go to VEDA to set up a venture capital fund to help early stage Vermont businesses.

$1 million will go to VEDA for a Vermont Jobs Fund to help otherwise healthy businesses weather tight credit conditions caused by the recession.

$200, 000 will go to the department of economic development for operation of the Vermont Training Program.

$500,000 will go to the department of tourism and marketing.

$100,000 will go to the Vermont Sustainable Jobs Funds for the Farm-to-Plate Investment program.

$150,000 will go the Vermont Sustainable Jobs Funds for operation of the funds.

Since the Governor will almost surely make a recommendation for the remaining $8.6 million to the next session of the Legislature and since the Legislature will certainly appropriate that money, you do have a voice in how the money is spent next year. You'll probably have a hard time making the case that it should be spent for a specific project in your town since it won't cover very many local projects but you can certainly try. You can advocate for statewide projects, for economic development, or to use the rest of the money to plug one more year of budget gap. The right people to contact with your recommendations are the Governor and your elected representatives.

An AP story on this subject is at http://www.rutlandherald.com/article/20090610/NEWS04/906100378.

An earlier post on the most popular money in the stimulus bill is here.

Stimulus and Recovery on Community Access TV

Telling you about stimulus opportunities is a big part of our job at the Office of Economic Stimulus and Recovery. Community Access TV provides in depth coverage which lets us get into the details of the very complex American Reinvestment and Recovery Act (ARRA better known as the stimulus bill) and the three hundred or so separate programs it funds.

There are 25 community access centers which operate 43 local cable channels and serve 100,000 cable households in Vermont according to the about page of CCTV in Burlington. These channels are funded by a percentage of the gross revenue of cable companies and sometimes contributions as well. Each access center produces and hosts shows and broadcasts them on local cable channels. You can't get them over the air or on satellite or out of the region in which they're produced except when the access centers share shows with each other, which they sometimes do. And, very importantly, the access centers make some of their shows available on the Internet so you can get them anytime and anywhere you have a good enough broadband connection.

Making coverage of events like select board meetings, local interviews, speeches at local events accessible to everyone is just one of the reasons all Vermonters need to have broadband access. But I digress.

Last month Congressman Peter Welch (D – VT) and I were luncheon speakers at a daylong conference in Burlington called Stimulating Green. The topic of both of our talks was the stimulus bill and what it means to Vermont. You won't get lunch but can hear what we both had to say at http://www.cctv.org/watch-tv/programs/stimulating-green-conference-keynote-addresses-rep-peter-welch-vermont-recovery-of. The conference and the talks were targeted to businesses looking for stimulus so the webcast is most interesting to small business people although it also has some general information on how your stimulus dollars are being spent.

A few weeks ago I was interviewed on another community access station, PEGTV in Rutland on their Insight show hosted by Laura Vien. Laura and fellow panelists Randal Smathers, editor of the Rutland Herald, and Royal Barnard, owner and publisher of the Mountain Times, asked me some good questions about the stimulus act and what it's likely to mean for Vermont. You can find that interview by going to http://www.pegtv.com/ipegvideo.php and typing "recovery" in the search box.