The Senate approved a proposal Wednesday to expand a program that allows ratepayers to generate their own electricity and sell power to utilities.
The bill, H.702, expands the state’s net metering program. Several utilities have stopped accepting applications from homeowners and businesses seeking to generate their own electricity because the program sets a limit on a utility’s total installed net metering wattage at peak demand.
The new cap – which the bill raises from 4 percent to 15 percent – will allow the program to continue for the next few years.
Rep. Tony Klein, D-East Montpelier, who chairs the House Natural Resources and Energy Committee, took up the bill early this session.
“It keeps doing what we have been doing, which (has) really taken hold and advanced rapidly the deployment of a lot of solar net metering in the last few years,” Klein said Thursday.
State regulators will later overhaul the program in 2017, at which point it is unclear whether the federal solar tax credit will be reauthorized – an important subsidy for financing projects that have been largely small-scale solar installations.
Klein said his committee did not want to “tinker with anything” until 2017.
“When we got the testimony from the utilities that nobody was going to be harmed in the next three years by any deployment of net metering and that nobody was going to be impacted by any rate increase attributed to that, that it really made sense to keep going with what we had,” he said.
Some residents and utilities say the program could shift the costs of maintaining the state’s transmission infrastructures – the poles and wires – to customers that do not participate in the program. This is because the program allows net metering customers to zero out their utility bill and not pay a fee that goes toward transmission costs.
Proponents of the program say it reduces rates because some utilities, such as Green Mountain Power, can tap distributed solar power to meet high demand during summer months rather than drawing on expensive diesel generators.
Environmental groups support the program, which they say explains why the state has the highest number of solar jobs per capita in the nation.
The Senate Finance Committee has offered several amendments to the bill, and more amendments will be offered Friday when the bill is scheduled for a final vote.
The committee amended the bill to allow municipalities to construct solar arrays of up to 2.2-megawatts on closed landfills. A project of that size is not allowed under the current program.
Johanna Miller, energy program director for the Vermont Natural Resources Council, said putting small-scale projects on capped landfills does not make financial sense currently.
“The biggest hurdle is that net metering projects are capped out at 500 kilowatts and 500 kilowatts is too small of a size of a project to make it financially viable for a landfill because landfill projects, they have an increased cost, which has to do with the specific kind of equipment that is necessary for landfills,” she said.
Miller said the proposal makes good use of the state’s closed landfills.
Sen. Kevin Mullin, R-Rutland, offered an amendment to credit customers for their power according to the wholesale price of electricity (rather than the residential rates currently issued under the program), which is about 5 cents per kilowatt hour on average.
Environmental groups and the Department of Public Service Department say this would stall net metering projects.
“The impact of that would be we wouldn’t see any more net metering projects built,” said Ben Walsh, a clean energy advocate for the Vermont Public Interest Research Group. “You’re talking about reducing the credit given by 40 percent to 50 percent.”
Under the bill, utilities will credit customers between 19 cents and 20 cents per kilowatt hour for solar net-metered electricity. The amount includes a “solar adder” on top of a residential rate for electricity.
Mullin is proposing another amendment allowing utilities to construct a 5-megawatt solar array to be used for net metering. The Department of Public Service and Green Mountain Power support the amendment.
Darren Springer, deputy commissioner for the department, said as long as there is a limit on the number of large-scale projects, the department would support the proposal. Springer said the larger projects will not count toward the 15 percent cap for utilities.
The amendment unanimously passed the Senate Finance Committee Thursday.
Gabrielle Stebbins, executive director of Renewable Energy Vermont, thanked senators in a statement. “This bill is a result of considerable coordination and collaboration, from the House to Senate, across the renewable industry and state agencies,” Stebbins said. “It’s a great example of Vermonters working together to identify solutions. All Vermonters, no matter where they live, can now participate again in self-generation – putting solar on their roofs, connecting cowpower,hydro dams and more, to the electric grid. Renewable Energy Vermont businesses and employees look forward to helping this happen.”
Editor’s note: Stebbins quote was added on March 16.