In 2015, Vermont lawmakers reformed the state’s electric grid by requiring utilities to purchase or build more renewable energy.
During the coming legislative session, which begins on Jan. 3, 2024, lawmakers plan to take up a bill to strengthen the law, known as the renewable energy standard. It will likely require utilities to source even more of their power from renewable energy, and rely more heavily on local and regional sources.
Lawmakers set themselves up to discuss the renewable energy standard this session by creating a working group that met throughout the last several months and published a report last week.
Though the group did not reach consensus on some issues, many of its members endorsed a draft piece of legislation that includes major reforms, which have long been called for by those who say Vermont needs to further reduce greenhouse gas emissions. Lawmakers will decide how and whether to use the recommendations while drafting their version of the bill.
The group included representatives of the state’s electric utilities; environmental groups such as the Vermont Public Interest Research Group, the Vermont Natural Resources Council, the Conservation Law Foundation and the Sierra Club; and trade organizations such as Renewable Energy Vermont and Associated Industries of Vermont. It also included state lawmakers who lead committees that would tackle the bill during the session.
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“The bottom line is, this is going to get a lot of new renewables built in Vermont and throughout the region, large and small, a broad variety of types,” said Ben Edgerly Walsh, climate and energy lobbyist with Vermont Public Interest Research Group. “And that’s really good from a climate standpoint.”
Vermont produces relatively high per capita emissions. In 2019, Vermont produced the third-highest per capita emissions in the Northeast, following only Pennsylvania and New Hampshire.
A relatively small share of those emissions come from the state’s electric sector, which reduced emissions by 80% between 2015 and 2020, according to the Energy Action Network. But the wide-scale shift to electrification has prompted an effort to strengthen the law.
“We’re always talking, in general, about beneficial electrification — moving thermal loads, moving transportation energy loads over to electricity, but the benefit is only meaningful if the electricity that’s being used is generated cleanly,” said Sen. Chris Bray, D-Addison, who chairs the Senate Natural Resources and Energy Committee. That panel will likely work on the bill this session.
Currently, Vermont requires utilities to purchase 75% of their electricity from renewable sources by 2032. A majority of working group members recommended increasing that to 100% by 2030.
The renewable energy standard also requires utilities to source 10% of their electricity from small-scale, in-state renewable energy facilities, such as a solar operation or hydroelectric facility. A majority of the group recommended increasing this amount to 20% by 2032 or 2035.
The group also proposed creating a broader category in which utilities are required to source some of their power from new renewable sources from the New England region, which could include Vermont.
“Ultimately, we’ve got an interconnected grid,” said Walsh, of Vermont Public Interest Research Group. “And pretending like the state’s borders are in some ways sort of sacrosanct from an electricity standpoint just doesn’t reflect physics or the market of how electricity works.”
The proposed legislation suggests allowing different utilities in the state to meet the requirements in different ways, depending on each utility’s ability to adapt.
While Vermont utilities largely buy power from renewable sources, much of the electricity that flows through the New England grid comes from natural gas. Helping to fund new renewable power sources could shrink natural gas’s slice of the pie, according to Peter Sterling, executive director of Renewable Energy Vermont.
“Adding new renewables is the only way we can push natural gas and other fossil fuel generation off of New England’s grid,” Sterling said.
Others argued that the new category could make the law more restrictive — and possibly more expensive. Rebecca Towne, chief executive officer of Vermont Electric Cooperative, said much of the power the rural utility purchases from HydroQuebec would not fall under the new regional category because it isn’t new enough, according to the report.
Renewable energy is defined under the new regional category as power that is “generated by any renewable energy plant coming into service after January 1, 2010 whose energy is capable of delivery in New England.”
Several of the working group members had broader concerns about the group’s final report. Louis Porter, general manager of Washington Electric Cooperative, said he was concerned that conversations about reforming the state’s net metering program did not play a larger role in the working group.
He argued that net metering — a program through which Vermonters with solar installations earn money from utilities by selling back excess power — is an expensive way to generate power through renewable energy, and that the utility’s other ratepayers pay more than they should for net metering.
“For a 100% renewable utility like Washington Electric, that power is just offsetting already renewable power at a higher price,” he said.
Porter still voted to accept the final report and voted in favor of the proposed legislation, along with the majority of working group members.
The group was tasked with answering eight questions about the feasibility of updating the renewable energy standard, but only answered four of them.
One of the questions left unanswered focused on equity, and how increasing the amount of renewable energy on the grid might impact households with low and moderate incomes.
For this reason, Mia Watson, a program manager with the Vermont Housing Finance Agency, urged lawmakers in a comment included in the report to more deeply consider the law’s implications on equity during the legislative session.
“VHFA remains concerned that Vermont as a state is not doing enough to help low and moderate households experience the benefits of a cleaner electrical grid,” she wrote. “Without deeply subsidizing fuel switching for the lowest income households, particularly for renters, the climate transition may result in increased income inequality.”
Still, many of the participants considered the group’s work a success. Sterling, of Renewable Energy Vermont, said he can’t remember the last time environmental groups “stood shoulder-to-shoulder with basically every utility in the state and said, ‘this is a good thing. Let’s move forward.’ That’s what we have out of this working group.”
