Last year
the legislature enacted an energy bill that continued a policy of supporting the
renewable energy industry in Vermont.
This year our House Natural Resources & Energy committee spent a
good deal of time working on another energy bill (H.468) that creates a roadmap
for the next 20 years to extend Vermont's leadership in energy policy in order
to reduce greenhouse gas emissions and promote job growth in the renewable
energy industry. It sets a goal of
achieving 75% of Vermont's total electric energy from renewable sources by 2032
and includes a Renewable Portfolio Standard (RPS) of 35% new renewables by
2032, including 10% from small-scale, distributed projects.
Up to now
the renewable energy goals were only goals.
Vermont utilities have been making good progress increasing their
renewable portfolios so that Vermont can today count almost 50% of the electric
energy we consume as renewable. This
includes the energy we get from Hydro Quebec. Two utilities, Burlington
Electric and Washington Electric Co-op, are at or near 100% renewable. By adopting a Renewable Portfolio Standard,
each utility will be required to have a percentage of the electricity it sells
to be renewable, including the renewable attributes, from a source built since
January 1, 2005. The percentage
increases from 4% by 2017 to 35% by 2032.
(Hydro Quebec power does not count toward the 35%.)
Renewable
attributes, also known as renewable energy credits or RECs, are tradable
commodities associated with renewable energy and have a cash value. Under the SPEED program, a utility that owns
a renewable energy plant can sell its RECs, thereby reducing the cost of the
electricity to its customers while still counting them toward their Vermont
goals. Meanwhile, the utilities buying
the RECs also counted them in their portfolios.
Vermont happens to be the only state that allows this double-counting to
occur. This has the effect of
undermining renewable energy development in the region because other states can
satisfy their RPS requirements by buying RECs from Vermont. The RPS will correct this situation by
gradually requiring ownership of the RECs by Vermont utilities.
A key
component of the RPS is an expansion of the Standard Offer program, which
guarantees long-term, stable prices for renewable energy generation. The Standard Offer program is currently
capped at 50 megawatts (MW) of distributed renewable energy generation but will
grow to 150 MW over 10 years. The annualized growth of 10 MW/year for 10 years
sets an achievable pace that creates price stability, avoids boom/bust cycles,
and benefits from decreasing renewable energy prices over time.
Finally, the
bill requires the Department of Public Service to analyze and report on the
status of the retail electricity market in Vermont and the effects of the SPEED
and Standard Offer programs on the market, on renewable energy generation, and
on greenhouse gas emissions, and to make recommendations for changes to the programs
if indicated. The bill passed 91-46 and
is now in the Senate.
On another
topic, the miscellaneous tax bill passed in the House on a vote of 125-14. The
bill includes a repeal of the double counting of interest and dividends for
income sensitivity. However, it
maintains the $500,000 cap on homestead property value for income
sensitivity. During the presentation of
the bill on the floor I voiced support for the repeal of the income calculation
but objected to not repealing the $500,000 cap which affects many Charlotte
residents whose home values have risen disproportionately to their incomes.
