There are few in state government who would say they are not in favor of making it easier for Vermonters to build their own small-scale renewable power systems. Such projects – typically hydro-electric, solar, wind or methane plants – could save money on power bills and lower the use of electricity produced from sometimes less benign sources.
For the most part, they also avoid the objections raised to larger renewable energy project – like proposals to construct massive wind towers on ridgelines or build new dams.
But there are still concerns about how many such projects are put up and how quickly. The quasi-judicial Public Service Board and lawmakers are in the process of trying to figure those questions out – a process furthered Wednesday when a group of legislators approved rules around the expansion of such consumer-built power projects.
Legislators in 2006 passed a bill – signed into law by Gov. James Douglas – asking the board to expand the allowances for net metering projects.
In net metering, farmers and citizens can build renewable power projects and “sell” the electricity they produce back to utilities at the same price they buy power from the companies. That can have some real advantages over so-called “off the grid” projects, in which residents use only the power they produce and store up.
For one thing it avoids the expense and maintenance necessary with keeping large battery packs. And, unlike those projects, it does not make it easier to build new homes in wild areas because net metering requires that consumers remain connected to the power lines.
There are also some legal limitations to net metering. For instance, customers can’t make money – they can only offset their total electricity bill for the year. And, under current law, net metering projects are limited in size and number.
In part, those restrictions are in place because utilities and regulators worry that if too many people produce their own power, it will cost other consumers too much money. That is because net metering consumers are paid the retail rather than the wholesale rates for their electricity. But, since they aren’t paying power bills, they aren’t covering their share of “fixed” costs like stringing up and maintaining electric poles and wires and power contracts with suppliers.
However, renewable energy advocates point out that since the total amount of electricity produced by net metered projects is limited and that 1 percent cap of the power used in a given utility’s territory is not even close to being reached, that fear is without merit.
Consumers seem to be catching on to the benefits of net metering. There have been 400 net metering projects in the last decade. But there were 100 applications in just the last year.
In 2006 the Legislature asked the board to expand the program to allow collections of residents to build net metering projects together, and a committee of lawmakers signed off on the rules governing that expansion Wednesday.
The new rules allow what is called “group net metering.” That means citizens who live next to each other in the same utility’s service territory can pool their money to build a wind turbine or solar project or methane digester, then use the power it produces to offset all of their electricity bills collectively.
The new rules would allow schools or towns – separately – to do their own net metering projects to cover the electricity used in all of their buildings, no matter how close or far apart they are.
Still, there was some tension between the Public Service Board – which crafted the rules – and the Legislative Committee on Rules, which approved them, over whether they go far enough in opening the flood gates to net metering. Lawmakers said they would likely push the rules of net metering to be more open when they return to Montpelier in January.
For instance, towns and schools would not be able to share power produced by one entity to offset electricity costs at the other.
That is bad for Marshfield and Plainfield, said Lori Barg, a renewable energy consultant who is working on two hydro projects there.
A group of students at Twinfield Union School has proposed a net metered hydro-electric project for the school that would produce power to offset the school’s energy costs.
That would save the school money, said Ian Young, a ninth-grade student who testified in support of greater flexibility for net metering projects.
Originally that project would have produced 500,000 kilowatt hours a year – enough to completely offset the schools’ energy use. But after the Agency of Natural Resources denied preliminary approval, the students scaled back how much the hydro project would operate so it will produce roughly 300,000 kilowatt hours.
Meanwhile, the town of Plainfield is working on a project to rehabilitate an old dam and produce power there, not too far from Twinfield. So the town should be able to count that excess power against the school’s electricity bill, Barg said.
“Why not spread the benefit to the school taxpayers,” she asked. The town will be able to sell that power to the utility – but at the lower wholesale rate, not the retail price.
In the end, the rules approved by lawmakers Wednesday will not allow that. The need to get the new regulations in place is too great to allow delaying the rules – already roughly a year in development – any further.
That was the right call, said Andrew Perchlik of Renewable Energy Vermont.
“We supported getting them in place, although in the actual rules we didn’t feel the board went far enough,” he said.
But the members of the legislative committee remained somewhat uncomfortable with the rules.
“The intent of the Legislature was to expand net metering,” said Rep. Jim Hutchinson, D-Randolph.
Sen. Mark MacDonald, D-Orange, said he hoped the board would consider greater flexibility.
“If they don’t, we will come back in January,” he said.
The rules around net metering will almost certainly be expanded next lawmaking session in any case. The energy bill passed during the 2007 legislative session would have greatly expanded them, allowing people who do not live next to each other to net meter collectively, for instance. Although that bill was vetoed by Douglas the net metering section had widespread support both in the Legislature and in the Executive Branch and will likely be resurrected.
“I trust we will revisit net metering, as we do every year,” said Sen. Ann Cummings, D-Washington.
By Louis Porter Vermont Press Bureau
4 October 2007
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