Action Alert | Proposed Changes to Renewable Mandates Could Cost Vermont Hundreds of Millions

The Senate Finance Committee has been considering legislation, S.267, that would make critical changes to Vermont’s Renewable Energy Standard, which mandates renewable energy goals over the next decade or so.  These changes could cost Vermont ratepayers hundreds of millions of dollars over the next ten years while contributing relatively little to Vermont’s climate goals given the state’s already clean electricity portfolio and expected advances under current law.

Vermont employers, especially manufacturers and other energy-dependent businesses, are strongly urged to contact their senators and members of the Senate Committee on Finance and Committee on Natural Resources and Energy to express concerns about legislation that would further increase Vermont’s already high electric rates.  The Senate Finance Committee could complete work on the bill early this week, with the legislation moving to the Senate Natural Resources and Energy Committee next.

Under current law, Vermont electric utilities are required to reach 75% renewables in their portfolios by 2032, a goal utilities are well on their way to meeting and exceeding.  Within this 75%, they are required to reach at least 10% from small, instate distributed generation, which has been and could likely remain primarily solar net metering projects, which are already subsidized at significant cost to ratepayers generally.

Under S.267, Vermont utilities would be required to reach 100% renewables by 2030.  However, utilities would be limited in their ability to purchase power from Hydro Quebec, a significant source of reliable, affordable renewable energy.  More concerning, however, would be the doubling of the instate distributed generation mandate to 20%.  These changes would limit flexibility for utilities to find more affordable renewable power sources to comply with the increasing requirements, including mandating a significant increase in the most expensive category of renewable generation.  On top of requiring more power to be purchased from the most expensive sources, requiring more instate distributed generation from intermittent sources (overwhelmingly solar) will drive the need for expensive upgrades to the electric grid.

To illustrate the potential impact of this bill, GMP has estimated that the net cost of expanding the distributed generation mandate to 20% could increase its own power costs by as much as $250 million over the following 10 years, and VELCO has estimated that achieving this mandate could increase required transmission infrastructure costs by as much as $500 million.  This impact would be on top of the significant cost of subsidies built into net metering projects that will already cost ratepayers approximately $400 million above market prices over the same time period.

Advocates for S.267 claim that more support is needed for renewable generation and distribution of small scale generation across the state, and that these new mandates will help reduce carbon and grow renewable energy jobs.  However, Vermont’s electric portfolio is already one of the cleanest in the country, and the growth of solar generation has been so significant that large additional requirements are likely to provide diminishing value.

 

Finally and ironically, increasing electric rates that will result from S.267 would not only hurt the competitiveness of all other businesses and manufacturers in Vermont, it would also be counterproductive in efforts to convert more of Vermonters’ heating and transportation to electricity. S.267 will undermine carbon reduction goals as electric rates increase.  If anything, legislation should be adopted to eliminate unnecessary and costly subsidies for net metering and other over-priced generation and allow even greater flexibility for utilities to pursue the most cost effective renewable generation available.

AIV urges opposition to S.267 as introduced, and recommends that any revised legislation move forward only if it avoids increasing costs to ratepayers, allows greater flexibility for utilities in sourcing competitively priced renewable energy, and provides for stronger guidelines for distributed generation to avoid increasing transmission cost demands.

More Information and Contacting Legislators

For more information about this issue, including options for engaging with legislators, please contact us at info@aivt.org.

To review the text of S.267 and other information, click here.

For contact information for the Senate Finance Committee, click here.

For contact information for the Senate Natural Resources and Energy Committee, click here.

If you want to find your legislators and their contact information, click here.  You can also leave messages for legislators with the Sergeant at Arms Office at 802.828.2228.