[T]he state’s Public Service Board released a draft of new rules Monday governing the way utilities purchase power from solar projects of less than 500 kilowatt-hours.
The proposed rules address a range of issues pertaining to solar energy, from renewable energy credits to siting and local control. One of the authors said the board wants to encourage participation in the review process by residents and local governments.
But critics worry that provisions meant to keep the renewable energy credits from Vermont-generated solar energy in the state will unfairly punish small local generators.
“This is, to me, fundamentally flawed,” said Kevin Jones, an energy law professor at Vermont Law School, about the new regulations. “Any business that wants to say they’ve gone solar, legally can’t do that” without a penalty.
The Vermont Attorney General recently issued an order to that effect, telling businesses they can’t make claims that they are generating or using solar power when that power’s “environmental attributes” (the renewable energy credits) have been s sold out of state.
Under the new rules, solar array owners must turn over legal title to energy credits or else receive significantly less profit under the popular net metering program.
Businesses that build solar arrays in Vermont under the net metering program and that sell credits would face a penalty of 6 cents per kilowatt-hour. The penalty is meant to discourage companies in the net metering program from selling renewable energy to utilities.
Out-of-state utilities, most often in Massachusetts or Connecticut, purchase what are called renewable energy credits from producers to meet those states’ statutory requirements. Utilities purchase renewable credits to avoid building their own solar facilities to meet state requirements for renewable energy. When Vermont solar providers sell environmental attributes, or the legal title to renewable credits, they lose the right to refer to that energy as “solar.”
If a brewery, for example, wants to claim its beer is made with 100 percent solar power, the brewery must take a 6-cent-per-kilowatt-hour hit on excess energy it sells to utilities.
Jones said regulators must realize that many in Vermont want to reduce their own carbon consumption beyond what’s achieved through statute, which they can do only by keeping the credits from solar power.
“Those people should not be treated the same way as someone selling their RECs to Massachusetts or Connecticut,” Jones said.
Jones plans to present a report Friday to the Legislature on the issue of RECs and their sale, and these rules will be among the issues he’ll take up.
Other changes to the rules are designed to address criticisms of a lack of local control over decisions about where solar projects will be built and the difficulties of participating in the Public Service Board hearing process.
The draft rules spell out, for instance, details on what has historically proven a tricky element in renewable energy proceedings, called the Quechee test.
“We tried to put it into clearer English,” said Margaret Cheney, one of the Public Service Board’s three members, who were directed by Act 99 to draft new net metering rules. “It’s part of an overall intent to make it easier for people to understand the process, to make the process clearer and more transparent.”
The board uses the Quechee test to evaluate the aesthetics of a proposed net metered project.
“They spell out the way the Public Service Board would analyze the Quechee test, and that’s an area that’s been a pretty controversial subject, mainly because the analysis has been absent, and people think that the board took liberties with the test in the past,” said attorney and former Public Service Board member Richard Saudek.
“I think they went a long way toward clarifying that” with the new rules, Saudek said.
The rules even go so far as to provide examples of acceptable and unacceptable language for the test’s purposes, Cheney said.
“For example, the general statement that ‘agricultural fields shall be preserved’ would not qualify because the statement does not designate specific resources as scenic,” the draft rules state. “The statement ‘the agricultural fields to the west of Maple Road are scenic resources that shall be preserved’ would qualify because it designates specific resources as scenic.”
Meeting the test’s requirements in a town plan is among the steps localities can take to control renewable energy siting decisions, the PSB wrote in a recent decision.
Legislators have been working recently to write laws increasing local control over renewable energy siting through improved planning.
It’s perhaps no accident that their efforts in many ways resemble the board’s proposed rules, one legislator said.
The Legislature and a task force on solar siting have worked together closely, as have the task force and the Department of Public Service, said Sen. Chris Bray, chairman of the Senate Natural Resources and Energy Committee. The Department of Public Service works closely, in turn, with the Public Service Board, he said.
“I’m sure there’s an awareness of what was being discussed. That must have come to the Public Service Board, (though) maybe not in an official way,” Bray said. “They’re seeing the kind of things we’re working on, and to me there’s a healthy convergence in thinking about these solutions.”
The board will be taking another round of public comments on the rules before adopting them by the beginning of next year. A legislative rules committee will also review the draft before they’re finalized.
Editor’s note: A write-through of this story was posted at 10:15 a.m. Feb. 23.
