Energy

Advocates protest as more utilities stop or reduce projects eligible for renewable energy credits

South Burlington's new twenty-five acre solar farm promises to generate a reported 2.2 megawatts of electricity for the state, enough to power roughly 450 homes. VTD/Eric Blokland
A solar installation.

Washington Electric Cooperative is the only utility in Vermont that has continued to accept applications to its net-metering, renewable-energy program, even after surpassing a legal marker that no longer compels it to do so.

But as of Oct. 1, the utility will accept only solar installations with a capacity of 5 kilowatts (kW) or less.

Vermont’s net metering law requires utilities to credit renewable energy projects that generate less than 500 kW for every kilowatt-hour (kWh) they produce. A utility, however, no longer has to accept applications for net-metering systems when the capacity of a utility’s total net metering surpasses 4 percent of its peak demand from the previous year or from 1996, whichever is greater.

When the Hardwick Electric Department and Vermont Electric Cooperative — the state’s second largest utility — hit the 4 percent mark, both utilities stopped accepting net-metering applications. The Morrisville Electric Department recently hit the cap, and they, too, are no longer accepting applications.

Leadership at Hardwick Electric and Vermont Electric say other customers are footing the bill for net-metering customers because net-metering customers don’t pay their fair share of the grid’s fixed costs. A new law passed in 2011, allows net-metering customers to apply the credits from the energy they produce to all charges, not just to kWh power charges.

This means that even though net-metering customers are using the power grid, they oftentimes aren’t paying for its maintenance. This financial situation is the major impetus behind Washington Electric’s decision to scale back the size of net-metering applications.

“We embraced net metering from the outset and have worked diligently to support WEC members who were interested in pursuing it,” Barry Bernstein, Washington Electric’s board president said in a statement. “However, as more and more members have signed up over the 4 percent threshold, we are growing concerned of the cost impact on other members.”

Even though Washington Electric was the first utility to hit the 4 percent marker, the utility has continued to accept applications. The news that the utility was scaling back its program catalyzed an avalanche of outcry from renewable energy advocates.

Gabrielle Stebbins of the trade organization Renewable Energy Vermont said she was disappointed by Washington Electric’s decision.

“Our net metering program has been our state’s primary successful renewables initiative, fostering clean energy, lowering peak costs on summer days for all customers, and creating local jobs,” she said in a statement. “As a result, Vermont has become 11th in the country for solar jobs. Unraveling a customer’s right to net meter would take us squarely backwards from our state’s adopted renewable energy goal of 90 percent by 2050.”

Johanna Miller, energy director for the Vermont Natural Resources Council, echoed a similar sentiment.

“The precarious fate of net metering in Vermont is deeply troubling, considering the program is one of Vermont’s most successful renewable energy deployment tools, making it possible for Vermonters of all incomes to generate their own clean, renewable, distributed power,” she said.

Ben Walsh of the Vermont Public Interest Research Group panned the move.

“Net metering is working exactly as intended and solar energy has begun to take off as a result. The last thing we should be doing is slowing down,” he said in a statement. “VPIRG recognizes that WEC’s decision to limit its customers’ development of renewable power is not as environmentally regressive as Vermont Electric Co-op’s recent decision to flat out stop any more of its members from going renewable, but it is still going to put the brakes on solar power.”

But Washington Electric has been one of the leading proponents of renewable energy generation in Vermont. So, why did the advocates go after the rural utility?

For starters, a battle is brewing between renewable energy developers and many of the state’s rural utilities over the future of net metering in Vermont. Washington Electric was just the first utility to send out a statewide news release on the issue.

As Stebbins put it, “WEC was the first one to step out there … VEC hasn’t really rolled out what they’re planning on doing yet. It’s hard to respond to something that’s temporary.”

Miller said the fact that Washington Electric has been such a proponent of renewable proliferation is what makes this decision so upsetting to her.

“You have our leading utilities that understand the need and benefit of renewable energy to the grid, and if they’re putting the brakes on it’s troubling,” she said.


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Andrew Stein

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  • Gabrielle/Johanna

    Without PV solar energy

    Spot prices during high demand, such during warm afternoons, often are a few cent higher than the annual average spot prices, but utilities buy only a very small part of their total energy on the spot market; almost all of it is bought under long-term contracts.

    With PV solar energy

    Whereas PV solar energy is “there” during warm afternoons (if it is not cloudy, rainy, foggy), its impact on spot prices is very small, and its impact on utility finances for not having to buy on the spot market because PV solar is “there”, is even smaller.

    Various charges, such as Efficiency Vermont, and taxes on rate payers bills are tied to energy usage.

    Other charges are per day, and serve to provide the lines and poles and maintain them.

    If a PV solar system owner significantly offsets his usage with solar energy, these charges and taxes are reduced, i.e, OTHER rate payers without PV solar systems have to pay more.

    This is a 25-year subsidy for the more fortunate few at the expense of the less well off many. The sooner that situation is made more equitable, the better for ALL Vermonters.

    • Mike Kerin

      Willem, the subsidy that nuclear, coal, and oil far surpasses the pittance solar gets. Solar net metering helps the electric company since they don’t lose any power through long distance transmission. They save on the days that people use air conditioning.

      • Mike,

        Your statements are invalid.

        Here is a URL that states the following federal electric subsidies per unit of PRODUCTION:

        http://jerrygraf.wordpress.com/2013/03/23/energy-subsidies-in-the-usa/
        http://jerrygraf.files.wordpress.com/2013/03/federal-electric-subsidies.png

        Solar $775.64/MWh
        Wind $56.29/MWh
        Geothermal $12.85/MWh
        Nuclear $3.14/MWh
        Hydropower $0.82/MWh
        Coal $0.64/MWh
        Nat Gas and Petroleum Liquids $0.64/MWh

        65% of the hours of the year, solar energy is minimal or zero. That means New England’s utilities need their ENTIRE system of generators, substations, poles and lines just as if solar did not exist.

        DISTRIBUTION energy savings due to solar energy fed into the DISTRIBUTION system are at most 1-2% of the quantity of solar energy, a piddling amount not worth talking about.

        “They save on the days that people use air conditioning.” Unclear statement. Please elaborate and show some numbers.

        Reread my above comment on warm summer days. The savings are largely imaginary.

        You may not want to accept the above from me, so I suggest you email David Hallquist, CEA of VEC, to verify the above.

        • Rob Macgregor

          It’s clear that you’re comparing two different methods of quantifying subsidies. Mr Kerin refers, I believe, to total dollars spent on coal, oil, nuclear and gas compared to totals spent on renewable technologies, and not to costs per MWh.

          The point is essentially that the C.O.N.G industries are established and fully mature, and therefore the continued subsidies do little except inflate profits.

          I’m sure you’ll make the claim that subsidies to renewables are mis-spent, compared to conservation and efficiency efforts, but if you want a real boatload of money to flow to C&E then it should come from the subsidies flowing to CONG. Some of that some money could be redirected to upgrade the transmission grid so that it can better integrate renewables.

          Lastly you never seem to accurately account for the social costs of various technologies in your skewed analysis of power costs. Take that into account, make the various generators pay for their true costs (i.e. carbon taxes or spent fuel storage and liability coverage in the case of nuclear) and it’s an entirely different picture.

          • Lance Hagen

            Rob,

            No one can accurately account for social costs. These scales or metrics are purely arbitrary.

            I am quite sure the ‘social cost’ for those living in the shadow of an IWT, like Luann Therrien and her family, is quite a bit difference than the ‘social cost’ that would be advertised by VPIRG or CLF

        • John Greenberg

          These figures are federal direct subsidies for one year. The world did not begin or end in 2010. Nor are direct subsidies the only subsidies. In fact, MANY of the subsidies used by fossil fuel and nuclear sources are indirect, making use of a variety of tax breaks.

          Sorry, Willem, but these figures are pretty meaningless.

        • Lance Hagen

          John, you have made this argument before. That being, the subsidies to renewable made in 2010 most likely were not in full production and therefore the subsidy cost/MWh would reflect this and would be high as compared to non-renewables.

          Well it is 2013 and all those subsidies ‘investments’ made in 2010 for renewable should be in full production. So using 2013 production numbers from the Dept. of Energy, here is how 2010 compares to 2013.

          Wind $ 56.29/MWh (2010) —- $ 27.10/MWh (2013)
          Solar $775.64/MWh (2010) —- $422.63/MWh (2013)

          And the 2013 numbers maybe artificially low since some of the production numbers in 2013 may have come from subsidies from 2011 or 2012.

          So Willem’s point on subsidies per power generated for renewables, being higher as compared to non-renewables is valid in 2010 and still valid in 2013

          • Lance,
            Thank you for the additional data. Two heads are better than one.

          • John Greenberg

            Sorry, Lance, but that’s NOT the argument I just made.

            I was trying to make 2 distinct points.

            1) Subsidies to energy production have been ongoing since Congress imposed protective tariffs on imported coal in 1789. When comparing subsidies between mature industries – fossil fuel and nuclear (through the current generation, at least) – and nascent industries – wind, solar, geothermal, etc. – it’s important to look not just at one or two years, but at the cumulative historical picture. The fact that, for just one example, the US government provided a 100% subsidy for the research and development of nuclear power from the 1940s through the mid-1950s will not show up in figures for any given recent year, but is highly relevant to the discussion. The only fair way to make comparisons is to look at the whole historical picture, by comparing CUMULATIVE total subsidies by energy source, and when one does, the result is quite different from what your (and Willem’s) figures show.

            2) The figures you’re both presenting are for direct subsidies. But most energy subsidies are INDIRECT. Perhaps the most important one for the nuclear industry, for example – since without it the industry would cease to exist – is the Price-Anderson Act’s liability insurance, which allows the industry to continue to function without confronting the potential financial consequences of a catastrophic accident.

            If Price-Anderson were repealed, every nuke in the country would shut down immediately, and no new nukes would be built. Obviously, it’s a pretty key subsidy, but unless I’m very mistaken, its value in the figures you’re presenting is precisely ZERO.

            All mature energy industries – fossil and nuclear – also benefit substantially from depletion allowances and other tax subsidies, which are, by definition, INDIRECT, and therefore do not show up in your figures either. The same goes for leases for mining and oil exploration on government lands which are granted at prices set in the 19th century and never adjusted for inflation.

            Measuring direct subsidies alone simply does not capture the thumb which governments put on the scale in the competition between these different energy sources.

            A fascinating look at these issues is here: http://www.dblinvestors.com/documents/What-Would-Jefferson-Do-Final-Version.pdf.

      • Matt Fisken

        “Solar net metering helps the electric company since they don’t lose any power through long distance transmission.”

        Except that a grid-tied solar system loses about 1/4 of its electricity (it takes quite a bit of energy to convert from DC>AC). Even the most expensive inverters are going to generate noisy AC that is nowhere near as clean as what comes from a steady spinning power plant.

        “They save on the days that people use air conditioning.”

        This kind of statement makes a very poor argument for feeding PV solar power onto the grid. Does it make sense to install a $15,000 system so that your neighbor with 4 air conditioners can power them “locally”?

        Rube Goldberg, eat your heart out!

  • Matt Fisken

    “net metering [makes] it possible for Vermonters of all incomes to generate their own clean, renewable, distributed power,”

    Are there any statistics to back up this claim?

    I would venture a guess that the typical household income/wealth of net meterers is above the state average income.

  • Luann Therrien

    So what we are being told is Vermont has to have 90% renewables by 2050.
    The electric companies only have to accept 4% provided by home owner small scale renewables, because then the power company would need to charge others for the difference.
    But at the same time power companies are all in favor of Industrial Wind Projects that require tax credits to survive and when the grid cannot handle the power the rate payer will be further billed to upgrade the grid.
    Am I missing something here or does this seem like a bunch of double talk?
    Here is an idea, take all the tax credit money and invest it in upgrading the grid and incentives for home owner small scale renewables.
    Why even bother with Industrial Wind mountain blasting, habitat destroying, land devaluing, human health negative impact crime against nature and humanity and do what makes sense?

    • Luann Therrien

      Thank you. I try.

    • David Usher

      Gotta be green, whatever the cost and we all must pay, doncha know.

    • Luann,
      “So what we are being told is Vermont has to have 90% renewables by 2050.”

      The 2011 CEP has as a goal that POOR Vermont gets 90% of ALL its energy (not just electrical energy) from in-state and out-of-state renewables, a more extreme goal than RICH Germany’s by 2050.

      That means POOR Vermont’s mostly energy sieve buildings would have geothermal heating, or electric heating (from the utility of from solar), vehicles would be 100% electric (no hybrids), and almost all electricity would be from renewables, which POOR Vermont’s RE promoters want to be from IN-STATE renewables as much as possible.

      Here are two examples of IN-STATE generation the wise Legislature never understood would become such money pits:

      1) Under Vermont’s SPEED program, the following average prices have been paid to the owners of RE projects of less than 2.2 MW:

      2010, for six months: 13.87 c/kWh.
      2011: 16.44 cents/kWh.
      2012: 17.16 cents/kWh.
      2013, for five months: 18.53 cents/kWh.

      Note the RISING cost/kWh. Various RE promoters have been saying RE costs/kWh would be DECLINING; are they just making it up to befuddle lay people?

      For the 2010 – 2017 period, a cumulative $131,220,058 excess above grid prices will have been rolled into electric rates of already-struggling households and businesses.

      http://vermontspeed.com/speed-monthly-production/
      http://vermontspeed.squarespace.com/project-status/

      2) The Lowell Mountain wind turbine project has become a PR disaster and will likely be a financial fiasco as well. It is producing energy at about 15 c/kWh, instead of the projected 10 c/kWh, about 3 times NE grid prices, because of high construction costs, high O&M costs, low 0.25 capacity factors, service lives of about 20 years, PLUS the costs of wind energy balancing, PLUS the costs of grid connection, reinforcement and extension, PLUS the costs back-up (adequacy), i.e., keeping almost all EXISTING generators fueled, staffed, in good working order to provide energy when wind energy is minimal, about 30% of the hours of the year in NE, about 10-15% of the hours of the year in the US.

      In the US, the cost of the 3 PLUSSES for onshore IWTs is about $16.30/MWh at 10% annual wind energy on the grid, about 19.84/MWh at 30%. This is significantly greater than the about $5/MWh usually mentioned by IWT proponents. See page 8 of this URL.
      http://www.oecd-nea.org/ndd/reports/2012/system-effects-exec-sum.pdf

      Note:
      – New England grid prices have averaged about between 5 and 6 c/kWh for four years.
      – Hydro-Quebec and Vermont Yankee prices are about 5.5 to 6 c/kWh.
      – Green Mountain Power bought 60 megawatts of steady, near-CO2-free nuclear energy at 4.66 c/kWh.
      http://www.ferc.gov/market-oversight/mkt-electric/new-england/elec-ne-rto-mth-pr.pdf

      The PSB accepted the GMP provided CF of 0.3587 (large rotor). Actual 2013 results are*:

      Month,   Days,   MWh,      CF

      Jan,        31,     8437,   0.180
      Feb,        28,     9229,   0.218
      Mar,        31,     7828,   0.167
      Apr,        30,     7348,   0.162
      May,        31,   10452,   0.223
      Jun,         30,    8392,   0.185
             
      Total,     181,   51686,  0.189

      * The $10.5 million, ISO-NE-required, synchronous-condenser plant, on line end 2013, which will reduce curtailments, may bring the actual production CF to about 0.25, similar to Maine, greater than New York State: 19 facilities; 2009, 0.189; 2010, 0.227; 2011, 0.236; 2012, 0.235. The S-C plant will reduce Lowell’s output by about 3% and has its own levelized (Owning+O&M) costs.
      http://www.windaction.org/documents/38237.

  • Bob,

    Mike did not specify subsidies on a total basis or a MWh basis.

    It is true, subsidies tend to live forever.

    The Production Tax Credit for wind energy has been in force for about 23 years, almost the full life of the wind turbine industry. Almost all aspects of technology of the wind turbine industry have been mature for some years, yet excessive subsidies continue unabated.

    The same goes for PV panels. The Chinese are mass producing them about as low-cost as can be, and yet excessive US subsidies continue unabated, but not in Spain where they were excessive and have been largely eliminated, and not in Germany where they were even more excessive and have been significantly reduced.

    In Germany, the daily solar energy surges are upsetting the grid too much, the energy can not be kept in Germany, is exported AT LOW COST (after having been subsidized AT HIGH COST) for balancing to the Netherlands and France.

    John,

    The subsidies are in 2010 dollars, according to the URL.

    “In fact, MANY of the subsidies used by fossil fuel and nuclear sources are indirect, making use of a variety of tax breaks.”

    Please list a few of the MANY indirect subsidies. If they are significant, they would alter the above, if not, the direct subsidies are a good indication of RELATIVE subsidy levels on a per MWh basis.

    • John Greenberg

      Examples are provided above in my response to Lance of August 16, 2013 at 7:09 pm. Didn’t want you to think I hadn’t answered.

  • David Rogers

    It would seem we just need to limit the net metering to energy and not taxes,fees and daily overhead charge

  • My mind is spinning like a hyper-blowing wind turbine at this back and forth, especially the figures, which are tough for an English major.
    But.. all the arguments (hot air?) blowing around miss a simple point, unless I am wrong. I am a member of WEC, which by the way is one of the greenest co-ops out there, with landfill and hydro generation. I think it’s valid for them to say ‘Whoa”, lets figure out a solution. And we need one. After all, if you spread the pole and maintenance costs among less and less people, rates have to go up for those left with “regular” power. Also, those wealthy enough to afford a $10-$15,000 solar array may benefit, but that is not fair to those unable to afford solar, which I think is most Vermonters – it’s certainly my case.

    Now, I think there’s an easy solution to this. Why not pay homeowners for the power produced from a local solar panel via net metering – which is set a high retail reimbursement charge, by the way – but then MINUS out a reasonable charge for line maintenance, agreed to by the PSB. After all, the utility is going to transport that excess power the home or business did not use. It only seems fair to me.
    I’m curious if there are obstacles or objections to this, from those more knowledgeable about power issues?

    • Andrew,

      In Germany, people with solar systems have 2 meters.

      One for regular energy from the utility, and the other for feeding solar energy to the grid.

      The former has all the usual charges like a regular bill, the latter measures the produced solar energy which gets reimbursed at the feed-in tariff.

    • Don Peterson

      Andrew: Reasonable enough, but consider that locally produced power isnt distributed nearly as far as mega-power. Thus it is cheaper infrastructure to maintain. Why not price electricity consumers at the rate they use the power– the way we tax fuel consumers at the rate they use the roads?

      And why not allow efficient households to opt out of the Efficiency Vermont charges if they are have already invested in efficiency?

      And I’m one of the “wealthy” ones you mention– I dont have a horse, an atv, a folder containing pictures of a trip to Arizona– I opted instead to borrow money from the bank to save the planet. It doesnt make financial sense to do this, but I do it anyway.

      • Don Peterson

        And on final note:

        Andrew: It isn’t your utilities job to address global climate change and be “green” — it’s YOUR job. A line of wind towers in Lowell doesn’t let you off the hook.