Cow Power farms find reprieve in new rates
ADDISON COUNTY — Three “Cow Power” farms that pioneered the generation of electricity from manure are suffering because they say the price they are paid for that power doesn’t meet the cost of producing it. Now they are getting some relief from the Public Service Board, which last week approved a temporary hike in that price.
The PSB OK’d a temporary payment of eight cents per kilowatt hour (kWh) to the dairy farms, which produce energy sold by Central Vermont Public Service Corp. In addition to the new rate per kilowatt hour, Cow Power farmers also earn a four-cent-per-kWh premium from Cow Power customers, bringing the total they are paid to 12 cents per kWh.
Farmers in the program had earned as much as 11 cents per kWh during flush times (not including extra four cents premium paid by customers), but wholesale prices now hover around four cents per kWh.
CVPS petitioned the PSB in October to increase the price it pays Cow Power farmers, and until the PSB acted the independent CVPS Renewable Development Fund was paying the farms the difference between wholesale prices and an eight-cent per kWh rate.
The PSB decision gives the farms and CVPS 180 days to hash out contracts that the two parties both agree are fair.
Marie Audet’s family owns and runs the Blue Spruce Farm in Bridport, one of the three farms approved for the 180-day price. (The other two farms approved for the price are located in St. Albans and Sheldon.) Audet said the decision offered a “reprieve” for the farms, who had been losing money generating the renewable energy after wholesale power prices plunged this year.
While Audet is satisfied with the solution for the time being, she said that the decision doesn’t address a larger issue: New farms that generate energy from manure in the future will be guaranteed a much higher rate for their energy. That comes under new “feed-in tariff” legislation that became law in May. The new law was designed to encourage more renewable energy development. It set rate paid for electricity produced in new anaerobic digesters at 16 cents per kWh.
The Audet farm, on the other hand, in 2005 was the first farm in the state to start selling electricity generated using anaerobic digesters, and it doesn’t qualify for the new rates.
“That rubs salt in our wounds,” Audet said.
Steve Costello, a spokesman for CVPS, was pleased with the news from PSB.
“It gives us time to work on the issue and try to come up with a new agreement that works for the farms, customers and the company,” Costello wrote in an e-mail.
Hashing out that new agreement, though, could be tricky. Costello said that CVPS wants to pay farms a fair price that ensures they can continue to produce energy, but the utility has to do so within the confines of legislative and regulatory guidelines that don’t always agree.
“On one hand the state wants us to use least-cost energy planning, but on the other it encourages these kinds of projects, which can be more expensive,” Costello wrote. “We’re hopeful this order will give us the time to be able to come up with a solution within those boundaries.”