Monday, September 12, 2011

Comments on PSB Staff Proposal for New Vermont Renewable Energy Portfolio Standard Due Sept 14, 2011


The Vermont Public Service Board (PSB) is in the process of preparing a report concerning the development of a renewable portfolio standard (RPS) in Vermont to revise or replace the current RPS and Sustainably Priced Energy Enterprise Development (SPEED) program passed by the Legislature in 2005.

Board staff have prepared recommendations for a potential new RPS program, which will be presented to the PSB later this month. Comments on staff recommendations are due September 14, 2011. The Board is then required to prepare and deliver its final report to the legislature no later than October 1, 2011.

Unlike other New England states, Vermont has not yet implemented a mandatory RPS program. The current SPEED program was passed in 2005 and is designed to encourage the development of renewable energy. It provides an incentive for the state’s retail electric utility providers to enter into long-term contracts with in-state renewable energy generators but does not set mandatory purchasing requirements for utilities. Instead, the program, as amended in 2008, sets a statewide goal that 20% of the state’s retail electric sales come from new in-state renewable energy facilities (often referred to as SPEED projects) by 2017. The legislation also included the general design for a potential mandatory RPS program (codified at 30 V.S.A 8004) and included a trigger requiring implementation of the mandatory RPS program if the PSB determines that the SPEED program has not been successful. The RPS requirement is triggered unless Vermont utilities, collectively, meet at least 5% of 2005 load, and incremental load growth from January 1, 2005, to December 31, 2012, up to ten percent of 2005 load, through contracts with renewable resources that come on-line after January 1, 2005.

In 2010, the Vermont Legislature passed Act 159, directing the PSB to evaluate and provide recommendations on potential revisions to the SPEED program (including potentially replacing the program with a more traditional RPS mechanism). The report is required to include, among other things:

  1. An evaluation of whether or not Vermont should adopt an RPS to amend or replace the RPS adopted in 2005 or, in lieu of adopting such an RPS, should adopt revised goals and requirements for the SPEED program.
  2. An evaluation of whether the voluntary goals and aspects of the SPEED program should be made mandatory.
  3. An evaluation of the economic and environmental benefits and costs of adopting an RPS at each of the following percentages of Vermont’s electricity supply portfolio: 25, 50, 75, and 100 percent. The board shall also perform the same evaluation with respect to the imposition of mandatory SPEED goals at the same portfolio percentages.
  4. An evaluation of the effect on the development of in-state renewable energy resources that may occur if an RPS is adopted and, under such an RPS, out-of-state resources with capacities in excess of 200 MW are considered renewable. The board shall also perform the same evaluation with respect to the imposition of mandatory SPEED goals. Such evaluations shall take into account each of the percentages discussed under subdivision (2)(C) of this subsection.
  5. Analysis of RPS statutes and rules that have been adopted in other jurisdictions and their strengths and weaknesses and a discussion of how a Vermont RPS and, in lieu of an RPS, revised SPEED goals and requirements might integrate with such statutes and rules.
  6. Consideration of whether or not Vermont should adopt a definition of renewable resources that includes tiers or classes and a recommended proposal for such a definition.
  7. Consideration of the manner in which Vermont would require third party certification that an energy resource is renewable.
  8. Consideration of the manner in which Vermont would require third party certification that a renewable resource has low environmental impact.
  9. Consideration of the extent to which a Vermont RPS and, in lieu of such an RPS, revised SPEED goals and requirements would include the purchase of electric energy efficiency resources and the appropriate means of verification that the associated energy savings are achieved.

PSB staff have held several public meetings over the past year to meet the October 1, 2011 deadline for the report. Prior meetings have included discussions on the effectiveness of the SPEED program, performance RPS programs in other states, and potential designs for a new RPS program in Vermont. The Board has also retained the Clean Energy States Alliance and Sustainable Energy Advantage (CESA/SEA) as consultants to analyze different potential policy mechanisms.

A draft of the CESA/SEA report – entitled An Analysis of Renewable Energy Policy Options in Vermont – was recently released and is available on the Board’s RPS Study website. The report sets forth various renewable policy design options and evaluates the advantages and disadvantages of each different design option; it also includes economic modeling of various policy scenarios. The CESA/SEA report, and the Board Staff’s recommendations for a potential RPS program were presented during a public meeting at the state house on September 1, 2011.

Based on the analysis and economic modeling contained in the CESA/SEA report, the Board Staff is currently recommending that Vermont adopt an RPS which would require Vermont utilities to obtain 75% of their retail electric power from renewable sources by 2032, with 40% of this requirement derived from maintenance of the state’s existing percentage of renewable resources, 30% of the requirement derived from new renewable resources constructed after 2005, and 5% of the requirement derived from in-state renewable distributed generation. Details on the RPS proposal are included in the staff report.

Comments on the Board Staff proposal are due this week, on Wednesday September 14, 2011 and may be submitted directly via e-mail to Ed McNamara

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