June 10, 2014

Net Metering Took Center Stage Among Vermont Energy Bills

A program that offers residents and businesses credit for generating their own electricity was stalled by its own success this year, but lawmakers this session were quick to revive it.

Many small utilities last year were forced to deny applications for net-metering projects - largely rooftop and backyard solar installations that come with generous tax credits and financing incentives - when the power companies reached a cap on how much energy they received through these systems.

Rep. Tony Klein, D-East Montpelier, who chairs the House Natural Resources and Energy Committee, hustled through his committee a temporary fix to the program early in the legislative session to raise the cap from 4 percent to 15 percent of the utility's total power supply at peak demand. Now it is up to state regulators to draft a comprehensive overhaul of the program in 2017.

The law includes an opportunity for utilities to design their own program if they have robust renewable energy and net-metering portfolios. Washington Electric Cooperative, which currently loses money through the program (though at no cost to ratepayers, the co-op says), is already poised to present a plan as soon as this summer.

The law was a victory for small-scale, distributed renewable energy and a renewed welcoming to nation's booming solar industry.

Energy Siting
Less successful this session were attempts to halt industrial scale power production - a concern propelled by ridgeline wind development and a swelling solar industry that some lawmakers say is outpacing local communities' ability to prepare.

Senate Natural Resources Chair Bob Hartwell, D-Bennington, twice pushed through his committee bills to give towns the authority to reject developers' proposal, a change that renewable energy advocates said would halt state's alternative energy progress.

One bill that cracked open the door on the state's regulatory review process for energy projects received stiff opposition from the Shumlin administration and never saw the Senate chamber. Another to do the same with ground-mounted solar installations flopped on the Senate floor.

Heat Pumps
More successful in Hartwell's committee, however, was a last-minute push to subsidize efficient air-source heat pumps, a technology that uses electricity to heat homes in the winter at half the cost of heating oil or propane.

The state's efficiency utility, Efficiency Vermont, carried the bill through the Statehouse this session. The bill would expand the company's services to offer rebates on heat pumps in addition to thermal and electrical efficiency projects with money raised through a fee on utility bills.

Renewable energy advocates say electrical heat pumps use less energy than other heating sources. And the bourgeoning market even has the support from competing fuel providers, including Vermont Gas and other traditional fuel dealers.

The bill goes into effect July 1, if signed into law. Some residents will be quick to take advantage of the subsidy this summer because heat pumps can also be used to cool homes.

Vermont Gas
Lawmakers did little this session on what will be the largest natural gas build-out in the state's history.

The Canadian-owned natural gas utility, Vermont Gas, is scheduled to break ground on a project to extend service from its base in Franklin and Chittenden counties, down through Addison County and later to Rutland.

State regulators have ruled Vermont Gas' project to be in the statewide public good and it has Gov. Peter Shumlin's strong support. The company says the project will save businesses hundreds of millions in energy costs and cut greenhouse gas emissions.

But many residents along the company's proposed pipeline route have spoken out against the project for charting the mainline through their property. And environmentalists oppose importing gas sourced through the process of hydraulic fracturing, or fracking, especially in a state that has banned the process. They also say natural gas will soon no longer be the cheapest fuel alternative with the emerging heat pump market and growing demand from electricity providers.

Hartwell - a critic of industrial-scale energy build-outs - never had a bill on the issue land in his committee.

"I didn't see legislators from those areas really pressing that hard to do anything about it," he said. "The gas is available to residents and business in that corridor. That's going to reduce the cost of doing business. And that's a big deal."

The project aligns with a booming natural gas industry across the country that has even the nation's most vocal fossil-fuel opponents tight-lipped on the issue. Even in a state that does not drill for gas, Shumlin supports what he says is a low-priced "bridge" fuel that will be good for business.

Vermont Gas scheduled to break ground June 1 on the first segment of the project.

Leftover issues
Lawmakers next year will have to grapple with several other key energy issues left unresolved this session.

The state's transmission utility told lawmakers they should prepare for a regional transmission build-out that will bring renewable power from the Canada to southern New England markets seeking to meet higher renewable energy targets. Vermont is set to be a corridor for these projects, but it remains unclear what benefits the state will see for hosting this infrastructure.

Solar developers received a minor tax break this session, but lawmakers may be pressed to decide whether solar net-metered installations should be exempt from the property tax altogether.

In 2007, the state regulators ruled on two projects greater than 150 kilowatts in size, and in 2013, it ruled on 33 projects, according to the Agency of Natural Resources. With the new net-metering cap set to accelerate this growth, the agency is struggling to review the environmental impacts of these small-scale energy installations. A proposal to help staff and fund the agency sank this session when it was attached to the Senate's energy siting bill.

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