Connecticut regulators ruled Wednesday that credits
purchased from renewable electricity generated in Vermont can count toward that
state’s energy goals.
The decision means Vermont utilities can continue to sell
their renewable energy credits in the regional marketplace, which brings in
about $50 million a year that utilities use to lower electric rates here. The
state worried that if Connecticut decided to exclude Vermont RECs, rates in the
Green Mountain State would rise by 6 percent or more as soon as next year.
In a long-awaited draft ruling, the Connecticut Public
Utilities Regulatory Authority found Vermont’s renewable energy credits are
acceptable despite some claims that Vermont RECs are “double counted.” The
credits represent the environmental attributes of electricity generated from
renewables such as wind and solar and are purchased by utilities to meet
renewable energy portfolio goals.
Critics of Vermont’s SPEED program argue that Vermont
utilities have been counting the same credits toward Vermont’s renewable energy
goal that are also sold to out-of-state utilities.
But Connecticut regulators said Vermont law does not
establish a tangible renewable energy goal until 2017. As a result, Vermont
utilities before that would not be applying the credits toward any real goal.
The Shumlin administration has made that very point in defending the program.
“There simply is no direct annual goal between 2012 and 2017
toward which megawatt hours are claimed or counted,” the ruling states. “While
there does appear to be an overarching ‘glide path’ goal over that timeframe to
increase the percentage of renewable SPEED resources used, no megawatt hours
are presently counted toward any identifiable goal today.”
That could change in 2017 when, under the SPEED program,
Vermont utilities are asked to source 20 percent of their electricity from
renewable energy generation projects built in Vermont. Regulators said if that
occurs, the RECs from Vermont would be legally questionable.
The ruling comes one day after the Vermont House passed
a new renewable energy policyto address the perception of double-counting.
The bill, H.40, replaces Vermont’s SPEED program with the
so-called RESET program that would take effect in 2017.
“Proposed legislation in Vermont, if enacted, would provide
more certainty today that SPEED 2017 goals would be administered in a way that
is entirely compatible with other state RPS programs,” the ruling says.
H.40 was introduced to the House Natural Resources and
Energy Committee in January. The Department of Public Service said one
of the reasons for pursuing the legislation was because utilities were
having difficulty selling renewable energy credits in New England. These sales
represent a $50 million source of revenue for utilities; without it, there
would be a 6 percent statewide rate increase, DPS has said.
Darren Springer, deputy commissioner of the Department of
Public Service, provided the department’s recommendation for a net metering
program to the House Committee on Natural Resources and Energy. Photo by John
Herrick/VTDigger
Darren Springer, deputy commissioner of the Vermont
Department of Public Service, said H.40 is still necessary. He said regulators
made clear that by 2017, the “SPEED program may trigger a claim” resulting in
the loss of REC sales for Vermont utilities.
“We don’t want to leave that type of uncertainty on the
table for ratepayers,” Springer said. “We want to do something with H.40 that
heads off any concerns in 2017.”
He said passing the bill now will give utilities time to
adjust to the new regulations. Under RESET, utilities will have to purchase or
retire RECs to meet meet state mandates. By 2017, 55 percent of a utility’s
electricity portfolio must come from renewables, and up to 75 percent by 2032.
Critics of Vermont’s SPEED program say the ruling confirms
the state has no current renewable energy goal. For years, the voluntary
program has come under fire from critics who say it doesn’t reduce Vermont’s
carbon footprint. The SPEED program was designed to reduce the upfront cost of
renewable power generation by allowing utilities to sell RECs for projects
built in Vermont.
“What is our goal? I am completely confused now,” said
Annette Smith, executive director of Vermonters for a Clean Environment, who
was a party on the Connecticut docket calling for an investigation into
Vermont’s practices. “We built a lot of renewable energy to serve Connecticut
and Massachusetts.”
The three-panel regulatory body, which is part of
Connecticut’s Department of Energy and Environmental Protection, sent a letter
last December to Gov. Dannel P. Malloy’s office seeking to reinstate their independence, according to a
news report.
Smith said the department’s oversight creates a conflict of
interest with the Malloy administration’s policy agenda.
“It reeks of political interference. That’s my gut reaction
to it,” she said of the decision.
The news was welcomed by Vermont’s largest utility. Green
Mountain Power sells renewable energy credits for nearly all of its wind and
solar generated in Vermont, bringing in about $30 million per year.
“I think, overall, we view the ruling as good news for
customers because it preserved the state’s ability to keep rates low,” said
Kristin Carlson, a spokeswoman for Green Mountain Power, which was also a party
to the case.
The company says it did not have any trouble selling RECs in
recent months. Other utilities, such as Burlington Electric Department,
Washington Electric Coop, and the Vermont Electric Coop had difficulty or
stopped selling RECs to Connecticut while the decision was pending.
The parties have until March 18 to file a request for oral
arguments. Regulators expect to issue a final decision by March 25.
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