Public comments were due Wednesday on new rules that developers say will kill independent utility-scale renewable energy growth in Vermont.
Utilities say the changes are needed to protect ratepayers from unfavorable energy contracts and avoid expensive infrastructure upgrades that conflict with the state’s goal of encouraging small projects throughout the state.
The proposed changes are to Section 4.100 of the Public Service Board rules, titled “Small Power Production and Cogeneration,” through which the state administers a federal incentive program laid out in the Public Utilities Regulatory Policy Act, known as PURPA. This law was originally conceived to force utilities to purchase hydroelectric power from independent producers, to decrease reliance on foreign energy sources.
States are forbidden from discriminating against renewable energy firms that qualify under Section 4.100 rules. The rules force utilities to buy energy from certain renewable sources, and that would continue to be the case.
Developers say the change that would hurt them the most is curtailing the power contracts to five years, instead of the usual 20, since that brevity makes it hard to secure funding. Several other proposed changes are less controversial.
Energy developers say the new rules effectively leave to utilities the sole authority to build utility-scale projects, eliminating independent competition.
“If this rule is able to happen, the competitive marketplace is over in Vermont, and then all Vermont ratepayers are at the mercy of Green Mountain Power and their Canadian shareholders,” said Adam Cohen, president of Ranger Solar, a Maine-based development company that has proposed six 20-megawatt projects across Vermont.
The proposed Section 4.100 rules would leave utilities able to set any price for the energy they generate from their own projects, he said.
“The competitive market that’s driving prices down … will go away,” Cohen said.
But Green Mountain Power supports the rule changes because they’ll actually protect utilities against being forced into costly long-term energy contracts, said the company’s spokeswoman, Kristin Carlson.
For example, one of the projects Ranger Solar has applied for under the existing rules would require Green Mountain Power to buy the electricity at energy prices from last year, Carlson said. Those prices are derived in large part from last year’s fossil fuel prices, she said.
Crude oil is selling at a little over half of last year’s annual average and a third of 2014’s. Electricity contracts pegged to today’s energy prices would save money for ratepayers, Carlson said, but the existing Section 4.100 rules don’t adapt contract pricing quickly enough to reflect market changes.