Final energy bill passes, minus renewable portfolio standard

The House Chamber of the Vermont Statehouse. Photo by Ceilidh Galloway-Kane

The House Chamber of the Vermont Statehouse. Photo by Ceilidh Galloway-Kane

This year’s energy bill passed Friday afternoon after weeks of uncertainty.

The original version of the bill would have required utilities to purchase set amounts of renewable energy through a “renewable portfolio standard.” A few closed-door meetings later, the Senate version stripped that requirement and shuffled the bill through.

The new bill still includes expanding the standard offer program that allows favorable contracts for in-state renewable energy projects.

The House passed the bill on a 103-34 vote.

The energy bill’s puzzling track this year resulted in weeks of stalling in the Senate and ultimately a last-minute rush to passage on what could be the eve of adjournment.

The House actually passed the original bill with a renewable portfolio standard, mandating that utilities buy a set amount of “renewable” energy, twice. First it was House Bill 468. Then it was a strike-all of a bill on smart meters. Members of the House worried that the original bill would not move in the Senate.

Rep. Paul Ralston pushed Rep. Margaret Cheney, who reported the bill, on why her committee took such a strong turn on the bill.

Cheney is vice chair of the House Committee on Natural Resources and Energy. Her committee worked for a large part of the legislative session on the bill before accepting the last-minute shift.

“The major concerns were the cost impact of a renewable portfolio standard,” she said.

Cheney said the new bill requires a study of the impacts of a renewable portfolio standard and better ways to design it.

The Associated Industries of Vermont has lobbied persistently against the bill, citing the impact it will have on electric rates.

Gabrielle Stebbins, executive director of Renewable Energy Vermont, said the bill will still spur clean energy jobs in Vermont but it falls short of setting a long-term strategy for the state.

“Having an energy bill with a standard offer expansion would be good for small and community-scale projects,” she said.

Under a renewable portfolio standard, utilities would have to obtain “credits” for renewable energy, which they could trade among other utilities throughout the region. That approach, Stebbins said, would allow the state to tap into out-of-state renewable projects to fulfill that requirement.

Utilities and large energy users say both approaches will significantly raise electric rates.

While the energy bill survived, other legislation affecting how utilities would be able to recoup money invested in weatherization did not.

Rep. Oliver Olsen tried to introduce an amendment that would prohibit utilities from recovering in their customers’ rates efficiency measures that do not benefit the electric system.

House Speaker Shap Smith ruled the amendment not germane, and it appears dead for this session.

Olsen’s amendment was aimed at a merger between the state’s two largest utilities, Green Mountain Power and Central Vermont Public Service Corp. The utilities propose investing $21 million in windfall money they are required to share with ratepayers into efficiency measures, with $12 million going to weatherization.

Olsen’s amendment passed on a voice vote earlier this session, but the housekeeping bill he attached it to will likely die in the Senate.

Another move to prohibit the utilities from recovering the so-called “windfall” money in rates came as an amendment to the budget in the Senate. A conference committee stripped that provision.

“By the Speaker refusing to allow that to go forward, it’s clear what happened in both the House and the Senate really was political theater and that there was no intention of providing real relief to utility customers,” Olsen said.

The utilities are still awaiting approval from the Vermont Public Service Board of their merger. If the board accepts a memorandum of understanding between them and the Department of Public Service, the utilities will be able to invest the $21 million they are required to share with ratepayers in efficiency then get the money back in rates. The utilities claim that investment will result in $25 million in benefits to ratepayers. The windfall requirement originated in 2001, when the Public Service Board allowed utilities to raise rates as a result of bad contracts with Hydro-Quebec. In return, they had to share the windfall of a profitable merger with their ratepayers.

Alan Panebaker

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14 Comments on "Final energy bill passes, minus renewable portfolio standard"

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Kevin Jones
4 years 18 days ago
The extension of the Standard Offer program is bad public policy in that it will result in an increase in Vermont electric rates but will have no net benefit for the environment. The reason for this is that Vermont, unlike all of the other New England states and New York, sets requirements for purchase of renewable energy and then allows the sale of renewable energy credits (RECs) out of state. The renewable energy projects then are registered in the renewable energy programs in states such as Massachusetts and Connecticut even though Vermonters are asked to subsidize them. This is similar… Read more »
Coleman Dunnar
4 years 17 days ago

You ask “Why is our legislature continuing this flawed public policy?”
Because it funds their campaigns.

4 years 17 days ago
Kevin, You make some good points. The beneficiaries are Vermont’s multi-millionaire RE vendors, project developers, financial types selling LLCs, and various households with high incomes that they want to shelter from taxes with the 5-yr accelerated write-offs. This has to do with greedy grabbing of federal and state subsidies for personal enrichment, i.e., making a quick buck at the expense of everyone else, and has absolutely nothing to do with reducing CO2 emissions. If that were so, increased energy efficiency would be much more effective per invested dollar. A much more economically-viable and environmentally-beneficial measure to reduce CO2 would be… Read more »
Doug Hoffer
4 years 16 days ago

Kevin

BED sells RECs from the McNeil Plant. Initially, the revenue was used to pay for the $10 million+ investment in NOx reduction technology that directly benefitted the people of Vermont. Additional revenue from the sale of RECs may be used to buy other renewable generating resources such as wind and small local hydro. In the meantime, it helps keep rates low.

The larger question deserves a full airing. But for BED and its ratepayers, the system is working for now.

Mary Hartman
4 years 15 days ago

This is happening all over: Minnesota, North Dakota, Wisconsin….with taxpayers in one state footing the bill for inefficient, ineffective, and economically unsustainable policies that profit a few. It needs to stop. The PTC’s need to end so Congress needs to hear from the people. Now!

Kevin Jones
4 years 16 days ago
Doug If you actually read what I have written on this topic you will note that I have never said that it is wrong for a utility such as BED to sell renewable energy credits. The example you give may be a good business justification. My criticisms have been of public policies such as the Vermont SPEED and standard offer programs that incentive or require contracts with renewable energy facilities but then incent the sale of the renewable energy credits out of state. For the reasons that this is flawed policy read my above post. I am concerned that you… Read more »
4 years 16 days ago
Kevin, You may be missing a major point. The REC issue are a red herring. The real issue is that the SPEED program is NOT about CO2 emissions reduction. It is crony-capitalism to enrich the top 1% of households at the expense of already-struggling households and businesses who will have rising electric rates, rising prices of goods and services, lower standards of living and the Vermont economy will have LESS jobs (more in the RE sector, but much less in the other sectors). Example of job shifting due to RE subsidies in Vermont: In late 2009, the Vermont legislature created… Read more »
David O'Brien
4 years 16 days ago
Gentlemen There is an I important point you are all missing. Why is it so important for VT to further ratchet up its renewable mandate when it is a state that absorbs more carbon than it emits, has more than 50% renewable content with HQ, and based on it’s minuscule size in NE and definitely the world cannot have any measurable effect on climate change? Vt ratepayers pay a premium in rates for no good reason so as Willem points out the wealthy can either sell renewable systems or install them. Talk about abusing the masses. I disagree with Kevin… Read more »
John Greenberg
4 years 16 days ago

“Why is it so important for VT to further ratchet up its renewable mandate when it is a state that absorbs more carbon than it emits, has more than 50% renewable content with HQ, and based on it’s minuscule size in NE and definitely the world cannot have any measurable effect on climate change?”

Because there is only one planet, and we all live on it. Global warming is NOT a local issue; it affects the whole planet. Similarly, carbon reduction does not end at any set of borders: it effects the whole planet.

4 years 15 days ago
John, As you are concerned about the whole planet, you should put increased energy efficiency at the TOP of your list, as it is the least polluting and least costly way to reduce CO2 emissions and your concern about the whole planet. David O’Brian’s response, as usual, is of a wise man talking. HE should again be in charge of the VT-DPS, instead of a lawyer with no/minimal energy systems education, training and experience. The cancelled RPS would have been another subsidy for Vermont’s RE oligarchy, but it, and the SPEED program, is not necessary for Vermont, as it already… Read more »
David O'Brien
4 years 15 days ago
John I would not argue that climate change is a global phenomena. My argument is that VT has done many things to protect the environment and to limit our carbon footprint. This is certaily true in the electric sector between the long term contracts for hydro, building the McNeil station or spending on energy efficiency. I am saying VT consumers have done their part. Forcing ratepayers especially emloyers to pay well above the market price in the name of climate change is foolish. First because we are a climate change success story and second because whatever effect we have could… Read more »
Doug Hoffer
4 years 15 days ago

At what point is a state or a country big enough to matter?
What if 15 states/countries the size of Vermont acted together? Is that enough to matter?

And while it’s true that working Vermonters are struggling, so are working people everywhere. Is it OK for working people in states with bad carbon footprints to pay more while Vermonters don’t?

And finally, what if we tackled the elephant in the room and attempted to reduce carbon emissions from transportation? We could raise gas taxes or invest in more public transit. Both would require contributions from all Vermonters. Would that be OK?

John Greenberg
4 years 15 days ago
David O’Brien wants to reduce climate change mitigation to a matter of finger pointing, but that won’t solve the problem. Given that we live on just one planet, each pound of carbon dioxide not generated solves one pound’s worth of the problem, whether it comes from Vermont, Beijing, or Timbuktu. Mr. O’Brien’s concern for “working Vermonters” is touching, but not convincing. Had he really had such a concern when he was DPS commissioner, he could have promoted programs to insure the working Vermonters were 1) using energy as efficiently as possible and if necessary, 2) receiving rate subsidies if optimal… Read more »
4 years 15 days ago
John, Europe has had about 10 years more experience with RE than the US. The energy production results and NET job creation from investments in RE turned out to be minimal and people in several nations made studies to find the reasons. Almost all studies, whether using input/output computer programs or not, showed high investment costs per NET job and NET job losses, as does the above VT-DPS study of the SPEED program. According to the VT-DPS, the SPEED program has fallen far short of its goal of building 50 MW of RE projects for about $228.4 million. After 3… Read more »
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