Developers and utilities sell Vermont’s wind and solar power to other New England states, using what are known as renewable energy credits, or RECs. As a result, although Vermonters subsidize these forms of energy, utilities in other states actually benefit from them, the report found.
The students want to change that. They are calling for new restrictions that would keep Vermont renewable energy in state, although they acknowledge that would raise the cost of electricity because utilities would lose the income from selling the credits.
The committee’s chairman said he’s holding off on any legislative remedy to the issues raised in the report until the Public Service Board finalizes new rules on solar development, which he said might address many of those concerns.The report “highlights a real need for people buying solar power and selling solar power to be very clear about how they’re handling the RECs,” said committee Chairman Chris Bray, D-Addison.
Developers and utilities continue selling wind and solar energy credits out of state because Vermonters don’t understand the process by which they do so, said Kevin Jones, a professor who supervises the Vermont Law School Energy Clinic. Three law students in that clinic — Gregg Freeman, Heather Huebner and Aaron Kelly — wrote the report under Jones’ guidance.
“This is well understood by people close to policy — they just portray it being radically different than it is,” Jones said.
Other states’ utilities buy Vermont renewable energy credits because those states require the utilities to get a portion of their power from wind or solar sources. Utilities purchase the credits — legal title to the renewable attributes of wind and solar energy — as a way to meet those requirements, instead of building wind and solar facilities.
Some of the credits come from producers in Vermont’s net metering program, which allows electric consumers who generate their own power to sell it back to the grid at a substantially higher rate than utilities pay for wholesale power.
“We’re putting a lot of money and resources into subsidizing renewable energy for Massachusetts and Connecticut, and it makes no sense from a public policy standpoint,” Jones said.
The report’s figures on Vermont’s consumption of wind and solar energy come from the state’s comprehensive energy plan, which determined that the amount of each that isn’t sold out of state is statistically nil. Although some solar purveyors in the state don’t sell their renewable credits elsewhere, they produce a negligible portion of the state’s total energy.
The electricity that replaces Vermont’s exported wind and solar power consists mainly of fossil fuel-generated and nuclear power, the report states.
The report also found that Vermont has doubled its greenhouse gas emissions from electricity production over the last 10 years. About a quarter of that can be attributed to the sale of renewable credits out of state, the report estimated.
The Public Service Board is currently revising rules for the net metering program.
The rewrite of these rules was statutorily scheduled for Jan. 1, to give legislators time to review them and pass legislation addressing any potential deficiencies, Bray said. His committee won’t take action on the report’s recommendations before those rules are finalized, he said, in case the rules largely put those suggestions in place.
But Jones said they won’t.
The draft rules would require that the credits for new net-metered solar power stay in state and go to the utility that purchases the power. But the rules do not speak to solar and wind projects that are already built, Jones said.
“It’s a failure in renewable energy policy by design,” he said. “It’s exactly as they designed it: to perpetuate the long-term out-of-state sale of wind and solar RECs.”
Bray didn’t indicate he would take up the issue of existing projects in his committee.
The law school report recommends the Legislature consider banning the out-of-state sale of RECs from net-metered projects, since Vermonters pay a premium for that energy. The report also recommends phasing out the sale of RECs from most existing wind and solar facilities.
If Vermont kept its wind and solar power in state, energy prices would rise, Bray said. The report confirms this, but urges it nevertheless.
“If Vermont wants to consume the cheapest power on the grid, it will consume dirty power and will increase its greenhouse gas emissions,” the report states.