In a recent interview on VPR, Gov. Douglas discussed economic development, electric rates, and VT Yankee (among other things). He said “This is the cheapest power that we have. We’re talking about this in the context of the greatest economic crisis we’ve faced in some time, and one of the key costs of doing business in Vermont and in this part of the country is the cost of electricity.”

According to the Economic Census, that’s not true.  For manufacturers, the cost of purchased electricity as a percentage of the value of shipments ranges from 0.2% to 2.1%.  For perspective, the cost of materials for manufacturers ranges from 31% to 57% and the cost of total compensation from 12% to 32%.

Even though New England electric prices are higher than other parts of the country, it’s pretty clear that electricity is NOT “one of the key costs of doing business in Vermont”.

Even if we could wave a wand and reduce the cost of electricity by 15%, the impact on the cost of products manufactured in VT would be negligible (see below). [The figures are adjusted to reflect Vermont’s higher electric costs than the national average.]

Savings per $100 of value if elec. costs drop 15%

$0.09 Trans. equip.

$0.12 Computers & electronic products

$0.12 Machinery

$0.14 Furniture

$0.15 Electrical equip. & appliances

$0.16 Food mfg.

$0.20 Printing

$0.21 Fabricated metal products

$0.27 Chemicals

$0.27 Wood products

$0.36 Plastics & Rubber

$0.42 Paper mfg.

$0.43 Nonmetallic mineral products

Obviously, businesses want to manage their costs as best they can. But to say that electricity is a “key” cost of doing business is a gross exaggeration.

The governor is entitled to his own opinions, but he’s not entitled to his own facts.

I think this is just odd coming up after weeks of Governor Douglas has been miles out ahead of Vermont Dems on the budget cut /gut publicity campaign.The Democrats finally,in the last week ,starting to get the word out about some alternative budget options then the legislature gets going and …wait for it …may take a short break to see what will happen in Washington.

Vt. lawmakers mull early-session lull

MONTPELIER, Vt. – Vermont lawmakers are considering a staggered start to the session – an organizational week, followed by a break while fiscal news is awaited from Washington. Senate President Pro Tem Peter Shumlin says the idea would be to give President-elect Obama a chance to get inaugurated and sign a promised major economic stimulus package bill that could have an impact on the finances of Vermont and other states.The session starts Jan. 7.

http://www.fox44.net/Global/st…

Why a recess?

The Valley News has endorsed the idea of the VT. legislature meeting and then recessing until the Obama/federal aid program details becomes available .Getting more information about the size and direction of the federal aid program is reasonable .But statements by legislative leaders and Valley News fail to make clear is why the legislature doesn’t deal with non-budget issues in session while waiting for the pending economic details. Two weeks,three weeks while other legislative business will be in stasis until the federal aid program is designed in Washington. I am only marginally familiar with the mysteries of how legislature manages itself but will this lull cause other tasks that are not budget related to be set aside or ignored ? Also from a framing the debate standpoint ,recess leaves the governor once again alone in the spotlight .

To that end, Vermont’s legislative leadership may be on the right track in considering taking a recess either soon after convening or in mid-session. That would permit lawmakers to acquire more accurate revenue forecasts and to see how the huge federal stimulus package promised by the incoming Obama administration would affect the state’s budget picture.

http://www.vnews.com/12302008/…