The Vermont Electric Cooperative (VEC) has filed a tariff request with the Vermont Public Service Board (PSB) seeking approval to resume net energy metering (NEM) installations.
In July, VEC reached a cap established by the Vermont legislature that requires utilities to allow NEM systems to be installed in their service territory up to a limit of 4% of the utility's peak demand. The legislature has given the PSB authorization to raise the cap after analyzing the costs and benefits of these systems. Until it receives authorization to exceed the cap, VEC has stopped approving new NEM system applications.
‘We've seen an increasing demand from VEC members interested in using renewable power sources. In particular, demand for net-metered solar systems is picking up dramatically,’ says VEC CEO Dave Hallquist. ‘Now that we've reached the four percent cap, this is the appropriate time to assess net metering in Vermont and determine how we can continue to encourage the adoption of renewables in an equitable and sensible manner.’
Under the current rules, VEC members who install NEM systems receive incentivized, above-market credits from VEC for the electricity that is generated. VEC says the cost of this subsidy is borne by non-net metering members in their electric rates. At the 4% level, this cross-subsidy costs non-net metering members about $580,000 per year, the co-op adds.
According to VEC, the incentivized rates require the cooperative to credit NEM systems at $0.20/kWh produced. VEC's tariff filing with the PSB proposes that the credits be adjusted to $0.125/kWh for a 10-year contract or $0.158/kWh for a 20-year contract.
‘VEC's proposal provides a solution that would provide fair compensation for electricity generated through net metering,’ adds Hallquist. ‘As the competitive marketplace drives the cost of solar down, we believe adoption of net metering will continue to increase without the need for incentives.’
However, Renewable Energy Vermont (REV), a nonprofit renewable energy trade association, is not pleased with VEC's proposal.
‘The Vermont Electric Co-op proposal regarding net metering drastically undervalues the full benefits of renewable net metering, including its recent role in deferring one transmission upgrade representing a savings of $250 million to all Vermonters,’ comments Gabrielle Stebbins, executive director of REV.
‘By valuing net metering substantially below retail rates, this proposal is assured to stop net metering by customers of all types – farmers, small businesses and homeowners – in the VEC service territory,’ Stebbins adds." Ultimately, this slows Vermont's progress in advancing green jobs, reaching climate change goals and in building local energy.’