The Word in the House 1/19/2014 - An Energetic Start

After a general election the legislative session usually starts pretty slowly as new legislators are oriented and start to learn the subject matter of the committees they have been assigned.  Every bill is born into existence from scratch and the numbering starts from “1”.   However, the beginning of the second session of a two year term is very different.  Bills that were passed by one chamber are already waiting for action in the other.  Some bills that were passed by both chambers with differences that could not be resolved before the final gavel fell last May have been negotiated over the summer by conference committees, and the resulting compromise language is ready to be voted on by both chambers.  Bills that were not acted on last year may find new life.  And many new bills will be introduced.  Committee work starts at a full run, and by the end of the first week, despite the ceremonial joint sessions with the Governor, it seems like we’ve been here a month. 

As I’m writing this at the end of the second week of the session, my committee – the House Natural Resources and Energy Committee – has crafted a bill that will ensure that Vermont’s solar energy industry will continue to grow and create clean energy and jobs.  Net-metering was instituted in 1999 as a way to allow small generators of renewable energy to run their meter backwards.  By 2001 there were 33 net metered systems in Vermont, including 6 small wind and 27 solar systems.  By the end of 2010 this number grew to 153 small wind and 1112 solar systems plus 6 farm methane systems providing a combined total of 12 megawatts (MW) of electric generation capacity. 

In 2009 Green Mountain Power started paying their net-metered customers an additional 6 cents per kilowatt-hour (kwh) for electricity they generated because GMP calculated that it had a net savings attributable to net-metering.  This savings was the result of not having to buy expensive electricity from other generators in New England during periods of peak electric demand.  These peak periods occur during the summer air conditioning season.  As a result the legislature passed a law in 2011 requiring all Vermont electric utilities to pay a “solar adder” which is the difference between 20 cents/kwh and what the utility would normally charge their customers. So for each kwh generated by a net-metered solar system, the customer will be credited 20 cents on their bill. Since then, with the cost of solar panels dropping, solar net-metering has become extremely successful, growing to 39 MW of capacity with more than 2100 systems.  Thousands of jobs have been created in Vermont as part of this industry.

Until now no utility was allowed to accept more than 4% of its total peak demand in net-metering installations.  In 2013 several small utilities ran up against this cap and had to turn away customers who wanted to install solar systems.  The bill our committee developed over the last two weeks addresses this problem and will carry this growth momentum forward allowing consumers to take full advantage of the federal solar incentive tax credits that are anticipated to expire at the end of 2016. It amends the existing solar net-metering program through December 31, 2016, and sets the framework for a future program that would take effect on January 1, 2017.  It increases the cap on participation from 4% to 15% of a utility’s peak load, allows streamlined permitting for solar systems up to 15 kilowatts, and keeps the solar credit at $.20/kwh for smaller projects of 15kW or less while achieving cost savings for utilities by reducing it to $.19/kwh for projects over 15kw. 

The bill also sets the framework for a future net-metering program. It requires the Department of Public Service to undertake a study of net-metering in 2014, and requires the Public Service Board to develop proposed rules for a new net-metering program by January 1, 2016.  These new rules would not be effective until January 1, 2017, giving the Legislature an opportunity to review the rules during the 2016 session.  The bill is scheduled to be voted on this week in the House.