Energy bill shifts focus to renewables, electricity

MONTPELIER – The Senate gave preliminary approval Wednesday to an energy bill that requires utility companies for the first time to provide renewable electricity to their customers and to devise programs to help customers use less fossil fuel.

The bil — H. 40 - sets a statewide renewable energy standard designed to reduce greenhouse gases in the state and to avoid a potential 6-percent electricity rate hike. The program is dubbed RESET (Renewable Energy Standard and Energy Transformation).

The Senate passed the bill Wednesday by voice vote. Lawmakers are expected to offer some controversial amendments Thursday on third reading, including possibly delaying implementation of requirements and giving towns and cities more authority over renewable energy sitings.

Vermont electricity companies were at risk of being excluded from a regional renewable energy marketplace because Vermont lacked a renewable energy standard that was uniform with other New England states. The Vermont companies earn about $55 million per year from selling renewable energy credits to other states, which, in turn, helps offset the cost of electricity to Vermonters. Without those earnings, electricity companies anticipated rates going up by an average of 6 percent and up to 20 percent in certain places.

Sen. Chris Bray, D-Addison, chairman of the Committee on Natural Resources and Energy, said the bill would help strengthen the local economy and build a more sustainable environment in Vermont.

Bray said failing to take action "leaves us at mercy of a national and international marketplace."

Under the bill, electrical companies must own renewable energy credits or provide renewable electricity equivalent to 55 percent of the companies' total electricity sales by Jan. 1, 2017. That would go up to 75 percent in 2032. At least a portion of the credits must stem from renewable energy generated within the state.

Another facet of the bill requires electricity companies to provide programs that would encourage customers to reduce their consumption of fossil fuels. Electricity companies would come up with idea for accomplishing those goals and present them to the Public Service Board for approval. Electricity companies, for example, could provide on-bill financing for purchasing an energy-efficient heat pump, said Darren Springer, deputy secretary of the Public Service Department.

"We see this as a truly innovative and forward-thinking aspect of the bill," Dylan Zwicky of the Vermont Public Interest Research Group said of the provision. "We've done a lot of work to increase renewable electricity production in the state. The difficult nut to crack until this point has been carbon pollution from heating and transportation."

The provision starts to address carbon pollution, Zwicky said.

About a dozen small municipal electrical companies — those with a customer base of 6,000 or less, will have a two-year reprieve from the fossil fuel-reduction provision, under an amendment by Sen. Alice Nitka, D-Windsor and others.

Nitka said the delay gives smaller companies more time to prepare for the requirement and learn from the experience of larger companies.

Matt Cota, executive director of the Vermont Fuel Dealers Association, said the program to reduce fossil fuels — which could involve assistance in purchasing electric car charging stations or electric heat pumps — will increase reliance on electricity. The association represents about 200 heating oil companies in Vermont.

"The overall theme of it is to sell more electricity," Cota said. "It's changing energy policy."

Cota said heating oil companies are integrated into the energy plan, though to a lesser degree. The companies can help meet the renewable energy standard by selling more environmentally friendly products, such as blended biodiesel heating oil.

The theory behind the plan is that the increased use of electricity will help to keep electricity rates down, Cota said.

"That's the theory," Cota said. "It may not work. That's what we're going to find out in the next 20 years."

Contact Paris Achen at 802-660-1874 and pachen@freepressmedia.com. Follow her at www.twitter.com/parisachen and https://www.facebook.com/ColTrends