The Vermont legislature has voted to create the state's first renewable energy standards for electric utilities. The bill, H.40, changes the way Vermont encourages the generation and use of renewably derived electricity.
Like most states, Vermont law has encouraged renewable energy development for over a decade. In 2005 the state legislature created the Sustainably Priced Energy Enterprise Development, or SPEED, program to promote
renewable energy development. Under SPEED, the state encouraged its 18 utilities to enter into
long-term contracts for power from renewable energy sources, with a goal that utilities source 20% of their supply from qualifying SPEED resources
by 2017. The SPEED program's goal has been to promote the development of in-state
energy sources which use renewable fuels to ensure
that to the greatest extent possible the economic benefits of these new
energy sources flow to the Vermont economy in general and to the rate
paying citizens of the state in particular.
But between recent controversy over possible "double counting" of renewable energy attributes produced and sold by Vermont utilities, and perennial interest in refining state energy policy, this year the Vermont legislature pursued H.40 as an attempt to fix Vermont's renewable energy programs. H.40 will replace the SPEED goals with a Renewable Energy Standard and Energy
Transformation, or RESET, program. The RESET program includes a renewable portfolio standard requiring that 55 percent
of a utility’s electricity come from renewables, including large-scale
hydro power, by 2017, increasing 4 percentage points every three years until reaching 75% by 2032.
The bill also gives utilities an entrance into financing thermal
efficiency for heating and cooling. It will require utilities to offer incentives and on-bill financing for
projects like weatherization and heat pumps. To monitor and protect against impacts to customer rates, H.40 requires annual reports starting in 2018 on the RESET program's impact on electric rates, including 10-year forward projections.
It also allows utilities to seek waivers if they can show that compliance would
increase electric rates.
Previous efforts to institute a mandatory renewable energy standard in Vermont were not successful, but this year versions of H.40 have now been approved by both chambers of the state legislature. The Vermont House of Representatives passed H.40 on March 10, and the Senate approved an amended version on May 15.