Wednesday, August 19, 2009

PSB Standard Offer Docket Nos. 7523 & 7533 - Update

The Vermont Public Service Board (PSB) issued an Order yesterday in the Standard Offer docket resolving certain threshold legal issues.

The three threshold legal issues were:

Issue 1 -Nature of Docket 7533. In response to concerns raised by a participant, the July 15 memorandum requested comments on whether: (a) the process established in the June 29 Order should be altered; (b) Docket 7533 must be a contested case as a matter of law; and (c) even if Docket 7533 does not need to be a contested case, certain procedures associated with contested cases, such as hearings or ex parte rules, must apply to Docket 7533.

Issue 2 - Legal authority to conduct an auction to assist in the determination of standard offer prices. The July 15 memorandum stated that any participant that believed that an auction is consistent with the statute must file such an analysis, along with sufficient detail of the auction to allow meaningful comment.

Issue 3 - Project eligibility. The July 15 memorandum requested comments on what event should determine whether a particular project is eligible for standard offer prices; in particular, are standard-offer prices available to: existing generation facilities; facilities that have been constructed but have not yet begun selling power; and facilities that have not been constructed but have received approval under 30 V.S.A. § 248 or 219a? In addition, the July 15 memorandum asked whether the Board can limit the participation of small-scale facilities and whether there are any statutory barriers to establishing a queue for resources.

In its August 18, 2009 Order, the PSB resolved these issues as follows:

Issue 1 - Nature of Docket 7533: The PSB rejected numerous parties arguments that Docket 7533 must proceed as either a contested case or as a rulemaking, and specifically determined that the "processes set forth in [the PSB's] Orders of June 3 and June 29, 2009, are the most efficient means of carrying out [the PSB's] statutory requirements." Therefore, the Docket will proceed as a non-contested case.

Issue 2 - Legal authority to conduct an auction: No party briefed this issue, even though it was originally raised by the Department of Public Service, so the PSB concluded that it does not need to address the issue further.

Issue 3 - project eligibility: The PSB concluded "that any project that sought regulatory approval prior to May 27, 2009, the effective date of Act 45, is not eligible to participate in the standard offer program.” In support of this conclusion, the PSB specifically cited Act 45 direction to the PSB to ensure that the SO program “provides sufficient incentive for rapid deployment and commissioning of plants.” Order at 11 citing 30 V.S.A. §8005(b)(2)(B)(i)(III)." The PSB also concluded that projects approved under the net-metering statutes and rules may not withdraw from that program and apply for a standard offer contract. Therefore, "a project on which site preparation or construction had begun, under the net metering process, would not be eligible for standard offer prices." The PSB also ruled that there is no statutory basis to exclude "small-scale projects" from the standard offer program.

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