Vermont has a chance to reset renewable energy

Now that the legislative session is in full swing, the House Natural Resources and Energy Committee has been working hard on a renewable portfolio standard as part of H.40, An Act Establishing a Renewable Energy Standard and Energy Transformation Program (RESET for short).

Twenty-nine states, including every other New England state, have renewable portfolio standards. The need for a Vermont renewable portfolio standard became urgent last summer when the Connecticut public utility commission opened a docket to determine if Vermont “renewable energy credits” are double-counted. Connecticut is expected to issue a ruling by April.

If the decision is adverse, Vermont utilities may suddenly find themselves unable to sell $50 million in renewable energy credits, resulting in a 6 percent rate increase statewide. Thus the need for a bill this session.

H.40 addresses the risk of a potential loss in renewable energy credits values by establishing a renewable energy standard for Vermont utilities. RESET would set standards for three categories of energy resources: 1) total renewable energy, 2) new renewable distributed generation, and 3) energy transformation projects. In the first category, RESET would require that total renewable energy comprise 55 percent of each utility’s sales by 2017, increasing to 75 percent by 2032. This category could be met through the purchase of energy with renewable energy credits attached, or with credits alone.

In the second category, RESET would require that new distributed generation comprise 1 percent of each utility’s sales by 2017, increasing to 10 percent by 2032. New renewable distributed generation is defined as projects that have capacity of 5 megawatts or less and come into service after July 1, 2015. If the distributed generation tier were met by solar only, it would require 400 megawatts of solar capacity, or roughly 25 megawatts of new solar capacity every year starting in 2017.

In aggressively promoting distributed renewable generation, Vermont is following both national and global trends. On the electric grid, distributed generation looks a lot like efficiency. Because demand is met locally, utilities do not need to reach out to the grid for supply.

Like efficiency, distributed power minimizes the need for expensive transmission lines, promotes reliability and reduces line losses. This lowers the cost of electricity for all Vermont consumers.

And through distributed renewable generation, Vermonters can become their own power suppliers, keeping some of the $830 million spent annually by Vermonters on electricity here at home.

The third category of resources in the RESET program is energy transformation projects. The bill defines energy transformation projects as energy-related goods and services, other than the generation of electricity, that result in a reduction in fossil fuel consumption and a reduction in the emission of greenhouse gases. Examples include home air source and geothermal heat pumps, weatherization, electric vehicle charging stations, and energy storage.

Energy transformation projects may provide more sales for utilities but, coupled with demand management to avoid peak consumption periods, can lower electricity rates by increasing revenues over the same fixed costs.

While the distributed generation category would likely have a slight upward pressure on electricity rates (less than 4 percent over 15 years), the energy transformation projects would likely have a slight downward pressure on electricity rates. The net impact is a modest net benefit for ratepayers. From a total energy perspective, one that includes electricity, transportation and heat, consumers are expected to save $275 million in total energy spending over the 15 years as a result of RESET.

If H.40 passes, Vermont will be the first state to include an energy transformation tier in its renewable portfolio standard. Vermont’s electricity sector is relatively carbon-clean, and will get cleaner as we move to 75 percent renewable by 2032.

In contrast, Vermont’s transportation and heating sectors continue to emit large amounts of greenhouse gases. The RESET program will encourage the strategic electrification of the transportation and heating sectors, helping us cut 15 million metric tons of greenhouse gas emissions, and keeping us on track to achieve a quarter of our statutory goal of reducing greenhouse gas emissions 75 percent by 2050.

Rep. Rebecca Ellis, D-Waterbury, is vice chair of the House Natural Resources and Energy Committee. Comment on this column here, or email letters to news@waterburyrecord.com.