James Abraham

November 20, 2009

The Vermont Legislature has sparked investment in Vermont's renewable energy sector by the recent enactment of the Vermont Energy Act of 2009. The Public Service Board's recent Order on Docket No. 7533 regarding its implementation helped pave the way for an unexpected amount of applications for new renewable energy projects in Vermont.

The Vermont Energy Act of 2009 created the Sustainably Priced Energy Enterprise Development (SPEED) program, codified in 30 V.S.A. § 8005. The SPEED program encourages small-scale renewable energy plants by placing a 2.2 MW cap on qualifying SPEED resources that can participate in the standard-offer program. The standard-offer program established by the Vermont Energy Act guarantees rates that utilities must pay for various types of green power.

On October 16th the Vermont Public Service Board resolved several issues regarding the implementation of the SPEED program and its standard-offer system with a new order on Docket No. 7533. The September 30th Order on Docket No. 7533 created a queue process which all developers, utility and non-utility, must enter to have a chance at the lower rates offered by the standard-offer program. The October 16th Order established that utility projects should not be provided preferential treatment with respect to their positions in the queue and that a lottery system should be used if there were too many applicants for the standard-offer program. The Public Service Board also held that there was no limit on the number of projects that one developer may enter in the queue. The Board found the concept of a lottery to be reasonable in case there were more applicants than spots in the queue, but likely did not expect such an incredible applicant turnout.

It was not until the queue opened for applications on October 19th that officials saw how far the program had exceeded its expectations. In total, 196 applications were received for solar electricity projects alone. This created nearly 172 MW of proposed new generation. Altogether this is more than 14 times the maximum for solar power allowed under the program. Because solar and biomass project applications exceed their allocations available under the standard-offer program, a lottery was conducted on October 22nd to select which projects would get lower rates through the standard-offer program.

The unbelievable turnout of solar energy investors is attributable to many factors making solar power a desirable investment. While on Vermont Public Radio, Leigh Seddon of Aleteris Renewables identified several reasons why solar developers have responded so positively. First, the state set a very attractive rate for electricity produced by solar panels. The Vermont Public Service Board set a rate of 30 cents per kilowatt hour for solar projects and lower rates were established for small scale wind, hydroelectric, biomass and methane generation. These rates are called "feed in" tariffs because they are designed to get new projects quickly into development. Second, federal and state tax credits provide an additional incentive for companies to develop solar projects on top of the standard-offer program. Finally, Seddon stated that it is a good time to build solar power plants because photovoltaic modules are getting less expensive. In fact, Seddon identified that Aleteris Renewables was being contacted from foreign investors all over the world who wanted to find out more about the Vermont SPEED program. Seddon also stated that companies wanted to get their applications in soon, before the rates are re-examined in January.

The Vermont Legislature established the new SPEED program to promote renewable energy and it has seen an enormous and unexpected applicant turnout. This exceptional program has attracted many renewable energy investors to Vermont and should be viewed as an excellent example for other states that are aspiring to spark a renewable energy sector of their own.

Sources:

Vt. Stat. Ann. tit. 30, § 8005 (2009).

Incentives Draw 200 Renewable Energy Proposals (Vermont Public Radio broadcast on Oct. 21, 2009).

Posting of Brian Dunkiel to Renewable Energy Law Blog, http://renewableenergylaw.blogspot.com/ (Oct. 21, 2009, 8:25 EST).

State of Vermont Public Service Board, Docket No. 7533, Order of Oct. 16, 2009,

available at http://psb.vermont.gov/sites/psb/files/orders/2009/7533_Order_re_Implementation_Issues.pdf

(last visited Nov. 17, 2009).

State of Vermont Public Service Board, Dockets 7523 and 7533 Information Page Implementation of Standard Offer Prices for SPEED, available at http://psb.vermont.gov/docketsandprojects/electric/7523 (last visited Nov. 17, 2009).