Benjamin Muth

September 28, 2011

     Vermont's Sustainably Priced Energy Enterprise Development Program (SPEED)[1] may add another solar farm to its growing list of renewable energy sources in Vermont. Essex Capital Partners, a Boston-based venture capital firm, proposed a $10 million, 2.2-megawatt solar farm, on a 40 acre plot of land in Hartford, Vermont.[2] Only 15 acres of land will be used for solar power infrastructure, and the other 25 acres will be used to create a visual "buffer."

SPEED aims to have 20 percent of Vermont's electricity sources come from renewable energy sources by 2017. To meet this goal, SPEED subsidizes renewable energy sources by guaranteeing a fixed rate of payment per kilowatt hour (commonly referred to as feed-in tariff, or FIT). SPEED's "Standard Offer Program," which Essex Capital Partners' solar farm has been accepted into, provides a fixed rate of 30 cents per kilowatt hour for a plant using solar power. In contrast, Vermont Yankee Nuclear Plant, Vermont's largest energy producer, receives 4.5 cents per kilowatt hour. Essex Capital Partners is guaranteed to receive the "Standard Offer" price for its solar power for 25 years, so long as it does not exceed 2.2 megawatts per year of production, which is the maximum output for programs wishing to receive the "Standard Offer."[3]

However, the SPEED program may be preempted by Federal Energy Regulatory Commission (FERC) regulations.[4] In a July 15 ruling, FERC held that a similar FIT program in California was preempted by FERC regulations, which have exclusive jurisdiction over wholesale interstate energy sales.[5] While Vermont's FIT program currently operates intra-state, utilities companies who feel unfairly disadvantaged by the program could use the FERC ruling as a basis for challenging its validity.[6]

Since the FERC ruling could be used to preempt Vermont's FIT program, the future of SPEED could be in jeopardy. However, Vermont plans on continuing the SPEED program, and continuing to promote renewable energy. The next steps for Essex Capital Partners is to secure an "inter-connection" agreement with Green Mountain Power in order to send the solar power to Vermont's grid, and to secure a certificate of public good from Vermont's Public Service Board.[7]

[1] Sustanably Priced Energy Enterprise Development (SPEED) Program, 30 V.S.A. §8005 (2011).

[2] Matt Clary, $10 Million Solar Farm Proposed in Hartford, Valley News, Sept. 25, 2011, at A1.

[3] Id.

[4] Donald M. Kries, Renewable Power in Vermont hits a SPEED bump, VTDigger.org (Aug. 5, 2011), http://vtdigger.org/2010/08/05/renewable-power-in-vermont-hits-a-speed-bump/.

[5] See California Public Utilities Commission, 132 FERC 61,047 (2011), available at http://www.ferc.gov/whats-new/comm-meet/2010/071510/E-1.pdf.

[6] Supra, note 4.

[7] Supra, note 2.