State Hopes To Promote Renewables And Spare Ratepayers

Dec 15, 2014

The Shumlin administration wants to change the way Vermont encourages and accounts for renewable energy projects, but it's trying to do so in a way that avoids a big hit to ratepayers.

The Legislature asked for recommendations on whether Vermont should make its renewable program conform to the type of system widely used in New England and other states around the country.

Those systems set up a mandated "renewable portfolio standard." That means utilities in those states are required to obtain a certain percent of electricity from green resources, such as solar, wind or hydro. Vermont now has a voluntary system, which doesn't set a renewable target until 2017.

"We see an opportunity to move from the SPEED program -- which is the current program -- to a program which would be much more in harmony with other states in the region in terms of renewable energy," said Darren Springer, deputy commissioner of the Department of Public Service. The department submitted a report to the Legislature Monday on revising the state's renewable energy policy.

Springer said the administration is trying to preserve some aspects of the Vermont SPEED program, which allows utilities here to sell renewable "credits" that out of state companies buy to meet their states green energy mandates. Those sales have amounted to about $50 million a year, money the utilities say has helped reduce rates. If those sales dry up, ratepayers could pay the price.

"Obviously, an overarching concern for the department is always going to be do all these things in a way that is as favorable for ratepayers generally as is possible,” Springer said.

"Obviously, an overarching concern for the department is always going to be do all these things in a way that is as favorable for ratepayers generally as is possible." - Darren Springer, Department of Public Service

But when the renewable attributes of a Vermont project are sold out of state, those megawatts can't be counted as a green energy resource that has cut greenhouse gas emissions here. Kevin Jones, deputy director of the Vermont Law School's institute for energy and the environment, said the state's report points out that Vermont could have done more to cut greenhouse gas emissions if the renewable credits were not being sold.

"The SPEED program does not work in terms of providing any climate mitigation. As a matter of fact, it has increased Vermont's carbon footprint, by something, according to their analysis, like 70,000 tons in greenhouse gas emissions in 2013 alone." - Kevin Jones, Vermont Law School

"For me, it's at least a step in the right direction for the Public Service Department and the Shumlin administration for finally acknowledging that the SPEED program does not work in terms of providing any climate mitigation.," he said. "As a matter of fact, it has increased Vermont's carbon footprint, by something, according to their analysis, like 70,000 tons in greenhouse gas emissions in 2013 alone."  

Springer said the state is looking for the most cost-effective ways to cut greenhouse gases and save ratepayers money. He says the state is not recommending that those renewable credits be taken off the market immediately.

"There is maybe kind of purist point of view that any projects that's developed in a particular state, that the renewable energy credits have to be retired in that state. And that's really not what any other state does, and that's not what a renewable portfolio standard does in other states,” he said.

Springer said the administration will have more detailed recommendations for the Legislature after it convenes next month.