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Vermont’s Expanded Net Metering Law, H.702: An Overview

On April 1, 2014 on an East Montpelier farm during a brilliantly sunny day, Governor Shumlin signed a bill that significantly expands Vermont’s successful net metering program. This action opens the door for all Vermonters, businesses and farmers to, once again, go solar.

The bill — H.702 — has two parts, including, 1) provisions that make changes to the state’s current net metering program and 2) setting in place a Public Service Board process to design a new net metering program that will take effect in 2017. Below is a summary of some of the primary elements of the bill… (VTDigger recently ran an article on the new net metering program.)

Changes to the current net metering program — effective April 1, 2014 — include:

  • Raising the 4 percent capacity cap to 15 percent of the utility’s peak load. Some provisions that relate to some specific utilities include:
    • Washington Electric Cooperative has 90 days to submit a new rate proposal to the PSB. The final timeline for a new program in WEC territory will depend on the length of time it takes to complete the PSB process. Upon approval, WEC can start accepting new net metering applications again.
    • All utilities, besides WEC, who had met the 4 percent cap have 15 days to submit a new rate proposal to the PSD. This includes the Vermont Electric Cooperative, Hardwick and Morrisville Electric).
    • There is a unique provision for the Vermont Electric Cooperative, in that the utility secured the ability to undertake a 5 MW solar pilot project. That pilot, if undertaken, would count towards the 15 percent cap, leaving about 7-6 percent available for net metering projects for interested Vermonters.
    • If a utility reaches the cap prior to 2017, when a new net metering program is in place, it has the discretion to continue to allow residential customers who want to pursue projects ­< 15 kW. All other net metering would require the utility to secure PSB approval.
  • Changing the 10-year “solar adder” incentive for larger projects. That means that any project < 15 kW will retain the 20 cent solar adder benefit but for any project > 15 kW the solar incentive will be 19 cents. (Note: This incentive structure does not apply to Washington Electric Customers. After they go through the PSB process, as noted above, WEC will have a different program in place. Please check in with WEC or stay tuned for more info about all the important details of their program.)
  • Changing the 10-day registration to apply to systems < 15 kW. (The updated forms will be online at the Public Service Board.)
  • Clarifying that customers maintain the Renewable Energy Credits (RECs) unless they choose to give them to the utility, who must then retire them.
  • At the discretion of the utility, enabling the development of municipality-serving solar projects — up to < 5 MW in size — on closed landfills.
    • Approved landfill projects would not count towards the 15 percent capacity cap.
    • These landfill projects must serve the statutory definition of municipality, which means “means any city, town, village, town school district, incorporated school district, union school district, or other school district, fire district, consolidated sewer district, consolidated water district or solid waste district organized under the laws of the state, and also includes every municipal corporation identified in subdivision 1751(1) of this title (24 V.S.A. § 4551)
    • NOTE: Windham County was enabled to advance a solar project < 5 MW in size on a capped landfill that could include private partners — not just municipalities — but that project must have applied to the Public Service Board for a Certificate of Public Good (CPG) before January 1, 2015.
  • Enabling one 5 MW solar pilot project in each utility area, at the discretion of the utility. With the exception of a 5 MW pilot in Vermont Electric Cooperative territory, these large-scale pilot projects would not count towards the 15 percent cap.
  • Requiring the Public Service Department to create and maintain a webpage with current net metering program status.

The second core component of H.702 offers direction to the Public Service Department and Public Service Board to put in place a process that reexamines and reimagines a new net metering program that will be put in place in 2017 — after the federal investment tax credit is set to expire in the end of 2016. To this end, the legislation:

  • Asks the Public Service Department to provide a report to the Public Service Board in October 2014 to kickstart the process to explore a new net metering program.
  • Asks the Public Service Board and Public Service Department to undertake a process, including a PSB workshop process, which engages all stakeholders and interested Vermonters in reimagining and offering recommendations to change the net metering program for post 2016. Some of the likely issues on the table in that important discussion will include:
    • What is a fair, compelling, consistent incentive structure.
    • How to address any potential cost shift issues.
    • How to deal with Renewable Energy Certificates (RECs).
    • How to grow and expand this successful program to make it accessible to all, ensure it helps meet the state’s clean energy and climate change goals etc.
    • Many more! Stay tuned as that process unfolds and find ways to add your ideas into this discussion…

Here is a link to the bill as passed by the House and Senate: http://www.leg.state.vt.us/docs/2014/bills/Passed/H-702C.pdf

*There are a few provisions that are unique to utilities that have met or exceeded the 4 percent cap, and as such, there are different provisions that guide their net metering program creation and implementation.

NOTE: Many thanks to Renewable Energy Vermont for sharing their distillation of this important bill, upon which this summary is built.