A possible flaw in Vermont’s renewable energy rules – one not found in New York’s system – that allows renewable energy production to be “double counted” by utilities has sparked a challenge to the Federal Trade Commission.
This week, the commission was asked to investigate potential deceptive trade practices by Green Mountain Power, of Colchester, the state’s largest utility with about 260,000 customers. Green Mountain Power owns two wind turbine farms in the state and is developing local community solar energy projects.
At issue is how the company has been reselling Vermont-issued “renewable energy credits” to utilities in other states, including Massachusetts and Connecticut, that need credits to help meet those states’ mandatory renewable energy production targets.
Between 2000 and 2010, Green Mountain Power received about $22 million from sale of such credits out of state. Connecticut banned such sales this year.
New York has a mandatory goal for renewable energy production and does not allow resale of its credits out of state, said Kevin B. Jones, one of the petitioners and a professor of energy technology and policy at Vermont Law School. He also is a former director of power market policy for the Long Island Power Authority and former director of energy policy for the New York City.
He was joined in the petition by Charles Johnson, the former Vermont state naturalist; Curt McCormack, a state lawmaker; and Bruce Post, a former staffer to various federal and state elected officials.
Green Mountain Power can sell its renewable credits under Vermont’s Sustainably Priced Energy Enterprise Development law. Selling the credits elsewhere allows the continued operated of nonrenewable electrical production, and undermines Green Mountain’s marketing claims to its customers that is promoting renewables, said Jones. He said such “double-counting is contrary to our climate goals”
Green Mountain Power spokeswoman Dorothy Schnure said there was “no validity to the claims in the petition… we have been very clear that we have been selling the (credits). We are following state law.”
Schnure said the money received from credit sales allows the company to reduce its retail power rates by about 5 percent.
“Once the (credits) are sold, (Green Mountain) can no longer claim the environmental attributes of the source and it is considered market power for our customers,” the company’s website said. “There is the possibility that (the company) would choose to retire our (credits.)”
It continued, “This would be dependent on Vermont’s regulatory environment and if a renewable energy mandate is implemented. Our current policy of selling (credits) helps us lower costs for our customers, but we will periodically review our policy of selling (credits) as the markets and the regulatory environment change.”
According to the company, the fuel mix for the power it sells in 2014 was 47 percent hydroelectric, 45 percent “market purchase” from other generators of an unspecified fuel mix, 7 percent nuclear, 1 percent oil and natural gas and 0.3 percent renewables.
Before the sale of renewable credits, the mix was about 15 percent from renewables.
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