Story + video: Net metering program gets second wind

One of Vermont’s most popular small-scale renewable energy policies is fully operational again.

Gov. Peter Shumlin on Tuesday signed H.702, a bill to expand the state’s net metering program, which allows businesses and homeowners to generate renewable electricity and connect it to the grid.

The program is an incentive to build out distributed solar energy, which supporters say cuts down on electrical infrastructure costs and spikes in peak summer power prices. The program stalled last year when several utilities reached a statutory limit on the amount of power they could accept from net metering projects.

Gov. Peter Shumlin signs a bill on net metering Tuesday, using the back of McKnight Farm owner Seth Gardner as a desk. Photo by Roger Crowley/for VTDigger

Gov. Peter Shumlin signs a bill on net metering Tuesday, using the back of McKnight Farm owner Seth Gardner as a desk. Photo by Roger Crowley/for VTDigger

“In other words, our successes exceeded our wildest dreams,” Shumlin told a crowd of reporters and stakeholders at a news conference on the McKnight Farm in East Montpelier, pointing to a nearby solar array as an example of Vermont’s energy future.

Lawmakers this year were quick to raise the program’s cap from 4 percent of a utility’s total power supply at peak demand to 15 percent, allowing the program to continue nearly unchanged for the next few years.

Darren Springer, deputy commissioner of the Department of Public Service, recommended the program fix to the House Committee on Natural Resources and Energy.

He said the state has over 3,600 net-metered projects, a small chunk of the total portfolio. Nonetheless, Springer said, “[it’s] the part of the portfolio that everyday Vermonters can touch and feel and install on their properties.”

But the day’s cheerful mood could not eclipse the concerns that even supporters of the program often point out.

For some of the state’s providers, such as the Washington Electric Cooperative, which serves about 11,000 central Vermont members, say the current program design could be expensive.

The program costs WEC about $250,000 annually, the equivalent to a 2 percent rate increase that the co-op has so far avoided through other cost savings, WEC board president Barry Bernstein told VTDigger.

Vermont’s energy use peaks in the summer. This forces some utilities to fire up costly (but reliable) fossil fuel-powered generators to meet the high demand. Drawing on residential solar instead saves these utilities money – savings supporters cite as key program benefits.

Bernstein did not speak at the news conference Tuesday, but he kept a close watch on lawmakers when they drafted changes to the program early this session. Included in the law is a provision to allow utilities to create their own net metering program under certain conditions.

The so-called “off-ramp” provision, as the co-op calls it, is available to utilities if their power portfolio is 10 percent net metered and 90 percent renewable energy.

WEC has achieved this threshold and is in the process of developing a new program. Bernstein would not comment on any short-term changes, but the co-op has supported a redesign in which the program’s costs and benefits are shared statewide.

“We have always supported that the net metering program actually be statewide with shared costs and benefits. And we feel that’s really critical, because one of the questions raised is that there are differences between each utility,” he said. “Well, there wouldn’t be if there was a statewide program where every net meter is an independent generator selling to a third-party source.”

Gabrielle Stebbins, executive director of Renewable Energy Vermont, an environmental trade organization that supports the program, said wind, which blows year-round, and other renewable energy sources can play a part in providing program benefits for winter-peaking utilities.

Rep. Tony Klein, D-East Montpelier, who chairs the House Natural Resources and Energy Committee, orchestrated the drafting of the bill. He made sure that the program fix did not upset key stakeholders, such as utilities and capital investors.

Instead, he passed the responsibility of overhauling the program to state regulators after 2017, at which point it is unclear whether the federal solar tax credit will be reauthorized. The subsidy is an important financing tool for a program dominated by solar.

Klein said challenges with the program will be solved in future.

“The future is not the past. And going forward into the future, we will figure what the solutions are to any problems that get in our way, just like we did with this bill,” he said.

Springer said the Vermont Public Service Board, the state’s utility regulator, will begin redesigning the program by October this year.

“It’s going to take into account technology changes and the price of technology; it’s going to take into account the differences between different utilities, there may not be a one-size-fits-all solution, maybe multiple solutions; maybe more things like group net metering,” he said.

The law went into effect upon enactment.

Seth Gardner, owner of the McKnight Farm in East Montpelier, speaks at a bill-signing with Gov. Peter Shumlin on the farm Tuesday. Photo by Roger Crowley/for VTDigger

Seth Gardner, owner of the McKnight Farm in East Montpelier, speaks at a bill-signing with Gov. Peter Shumlin on the farm Tuesday. Photo by Roger Crowley/for VTDigger

John Herrick

Comments

  1. Matthew Rutherford :

    One clarification: the article is correct in that the “off-ramp” provision is available to all utilities who have achieved the 10/90 resource requirements described above. As mentioned above, this would allow said utility to create their own net metering program.

    According to the article, WEC is developing their own program. This is separate from the “off-ramp” provision as any electric co-op in the state is afforded the ability to do so. This “pilot program” provision allows the co-op to develop alternatives for rates, credits for NM systems, solar incentives, etc, all pending approval by the Public Service Board, but also requires the co-op to construct a solar net metered facility or group of facilities on land owned or leased by the company with a capacity equal to 4% of the cap but no larger than 5 MW.

    Any interested readers can find the language of the bill below. The subsections relevant to my comment are (n) and (o).

    http://www.leg.state.vt.us/docs/2014/bills/Passed/H-702.pdf

    • Matthew Rutherford :

      Let me correct myself: WEC has achieved the 10/90 goals.

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