Vermont House approves major renewable energy overhaul 

The Shumlin administration estimates the proposed program will slightly reduce rates in the long term. Also, customers would purchase more electricity to power appliances, but they may save on other energy costs.

Turner is not confident in the Department of Public Service’s analysis of the rate impacts. He did not cite any studies supporting his claim, but said he has heard from residents concerned about the program’s cost.

His amendment to remove the Tier 3 provisions was defeated 42-99. He said the vote was intended to say “slow down.” His amendment, he said, would have addressed concerns from utilities in the region that have stopped buying renewable energy credits from Vermont fearing they are invalid.

“The purpose is, I want Vermonters to see that we support fixing this problem, but we’re not willing to go to the next step, which is another aggressive, very ambitious program that makes a number of assumptions that rates will be less in the future,” Turner said.

According to Darren Springer, deputy commissioner for the Department of Public Service, eliminating the final requirement of the bill – which would encourage consumers to reduce their fossil fuel consumption – would eliminate $275 million in energy savings. It would also cut in half the projected greenhouse gas reductions, reduce job growth associated with the program and create a 4 percent rate increase, he said.

Springer said the Tier 3 section allows utilities to offset their fixed costs with additional electricity sales at times when demand is already low; as a result, they can make more efficient use of the existing poles and wires. This drives down the cost to serve each customer, he said.

“It’s like a factory and you’re using two shifts. If we’re able to do heat pumps and [electric vehicles], it’s like adding a third shift in the same factory. So you’re going to get more production out of that factory,” he said. “You’re going to get more production out of the same grid. That’s a ratepayer benefit.”

The bill spurred a much broader debate about how utilities should pay for their obligations under the policy. As it stands, Vermont regulatory law allows utilities to recover prudent investments from their customers. But some lawmakers say this is like a hidden tax that is going to rise under the proposed program.

Rep. Cynthia Browning, D-Arlington, offered an amendment to prevent utilities from recovering the cost of certain investments from ratepayers. She said ordinary ratepayers should not have to finance projects designed to meet state policy goals.

“This new program will inevitably end up in the rate base,” she said. “I don’t consider this a good way to go forward. I like arm’s length. I don’t consider it a good thing when we impose what are essentially taxes on ratepayers to meet state goals.”

The amendment would have created a hurdle for utilities to make investments necessary to meet their obligations under the bill, utility officials say.

Another amendment by Browning would have added siting standards on energy generation projects. As the state seeks to build more renewable energy generation in Vermont, neighbors near wind and solar farms have pushed back. Residents and towns have little say in the Public Service Board Section 248 permit process. Attempts by lawmakers to change the process have been opposed by renewable energy advocates.

Rep. Tony Klein, D-East Montpelier, chair of the Natural Resources and Energy Committee, planned to take up an energy siting bill Tuesday. He agrees that the state should do more to encourage responsible development. There are at least nine energy siting bills introduced this session. A hearing on energy siting will be held March 24 at the Statehouse.