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New report explores how sourcing 100% of Vermont's electricity from renewables would affect rates

A sign reads 100% renewables for all. People kneel behind it in the Statehouse holding signs calling for climate action.
Abagael Giles
/
Vermont Public
Grassroots environmental groups Third Act and 350Vermont are calling for lawmakers to require Vermont utilities to commit to sourcing all of their power from renewables by 2030, among other changes.

In the fight against climate change, making electricity cleaner is a powerful tool.

One way to do that is to replace fossil fuel-generated electricity with power from renewable energy sources, like wind and solar.

In Vermont, state law currently calls for electric utilities to add more power from lower-emissions renewable resources like solar and wind every year. The state’s regulations also allow utilities to comply by acquiring power from more controversial sources like large-scale hydroelectric dams and biomass.

Vermont’s Climate Action Plan says utilities should be moving even faster than what the regulations currently require. It calls for Vermont’s power to be 100% renewable by 2030.

Last session, state lawmakers commissioned a study to see how doing this change would affect the economy and electric rates. Here are a few of the key takeaways from the report, which is out now.

What do Vermont regulations currently require of utilities when it comes to supplying their customers with renewable electricity?

Vermont has a regulation called the "Renewable Energy Standard.” The Legislature passed this bill into law in 2015. It requires every electric utility in the state to ramp up the amount of power in their portfolio that is renewable over time.

More from Vermont Public: Lots of farms have biodigesters. But how do they work, and do they always cut emissions?

Right now, electric utilities have to get 75% of their power from renewables by 2032. And of that, 10% has to be from renewables built in Vermont since 2015.

The last big push in the Legislature to update these regulations was in 2020.

What do some utilities, advocates and lawmakers want to see change?

Right now, Vermont’s main plan to reduce greenhouse gas emissions is to electrify the way we heat buildings and get around. That’s what the state’s Climate Action Plan calls for.

Modeling by Vermont’s grid operator, VELCO, predicts that’s going to substantially increase the amount of electricity we use in the coming decades.

To make sure that we get the most emissions reductions possible from people using electric appliances and cars, we need to make sure that our electricity is as low-emitting as it can be.

On paper, Vermont’s electric portfolio looks pretty good right now — though some environmental advocates have concerns about how the accounting is done, by using a system called Renewable Energy Credits. You can learn more about Renewable Energy Credits in this episode of Brave Little State.

But in New England, we’re all on an interconnected grid, so even though our utilities may buy electrons from a renewable resource (or at least the right to say those electrons are part of their portfolio), they’re still getting jumbled together with electrons from say, a natural gas plant in southern New England.

Brave Little State explains more about how New England’s grid works, here.

This means the only way to get more renewable electrons on the grid is to build new renewable resources in New England — new solar arrays, new wind farms, new battery storage.

Right now, the Renewable Energy Standard lets Vermont utilities get most of their power from older, existing renewable resources. And there’s a reason: utilities say there’s a cost benefit for ratepayers.

Additionally, large-scale hydropower is available at any time of day, just like fossil fuels are and similar to the way people expect offshore wind will be if it eventually comes online.

However, renewable developers and many environmental groups say Vermont’s regulations should do more to drive the development of new renewables, both in-state and in the region.

And while other New England states have similar regulations in place governing their electric utilities, we’re the only state in the region that considers older, large-scale hydroelectric projects like those owned by Hydro-Quebec to count as “renewable energy”.

People hold signs and kneel on the floor of the Cedar Creek Room in the Vermont Statehouse. The signs call for climate action.
Abagael Giles
/
Vermont Public
Members of the grassroots environmental groups 350Vermont and Third Act called on lawmakers to make major changes to Vermont's Renewable Energy Standard in November.

All this together leads some environmental advocates and developers in the state to say Vermont isn’t doing its share to decarbonize New England’s power supply.

At a press conference at the Statehouse in November, members of the grassroots environmental groups 350Vermont and Third Act called for lawmakers to require more than 60% of the state's electricity come from new solar and wind by 2035.

They also called for big changes to what the state defines as "renewable," for policy that supports community solar, as well as major changes to how utilities are allowed to account for their purchases of renewable power.

"We can't have Vermont relying on this power that causes significant ecological damage, produces methane emissions and destroys Indigenous lands," said Jessica Van Oort with 350Vermont, referring to the electricity Vermont utilities now get from Hydro-Quebec.

Who was part of writing this report, and what did they study?

Lawmakers convened a working group made up of utilities, environmental groups, renewable developers and people who represent industry and manufacturing in Vermont. The full list was:

  • Sen. Chris Bray, D-Addison County
  • Rep. Amy Sheldon, D-Middlebury
  • Sen. Anne Watson, D-Montpelier
  • Rep. Laura Sibilia, I-Dover
  • Jeffrey Cram, GlobalFoundries
  • William Driscoll, Associated Industries of Vermont
  • Michael Lazorchak, Stowe Electric Department
  • Shana Louiselle, VELCO
  • Brian Evans-Mongeon, Village of Hyde Park
  • Candace Morgan, Green Mountain Power
  • Ken Nolan, Vermont Public Power Supply Authority
  • Christopher Pearson, Sierra Club
  • Louis Porter, Washington Electric Cooperative
  • Brian Shupe, Vermont Natural Resources Council
  • Darren Springer, Burlington Electric Department
  • Peter Sterling, Renewable Energy Vermont
  • Rebecca Towne, Vermont Electric Cooperative
  • Ben Edgerly-Walsh, Vermont Public Research Interest Group
  • Mia Watson, Vermont Housing Finance Agency
  • Chase Whiting, Conservation Law Foundation

The group hired consultants and looked at a bunch of data about what Vermont ratepayers want and how changing the Renewable Energy Standard would affect electric rates and the economy.
Find the working group’s full work, here.

The utilities at the table really wanted to explore big changes to something called the net metering program. It’s not explicitly part of the Renewable Energy Standard, but it’s how most of the in-state renewables get built.

Essentially, ratepayers can install (primarily) solar on their property, and any excess power they generate goes back to the grid, where it's purchased by electric utilities at a premium. There is also a form of net metering called "group net-metering" that lets ratepayers team up to invest in new solar that doesn't have to be on their property, which they can sell back into the grid at a premium.

Ultimately, other electric customers pay for this power. And net metering customers are disproportionately white, affluent and homeowners.

The utilities say if we’re going to ask their ratepayers to pay for decarbonizing the grid, we need to make sure that cost is borne equitably. They say that right now, that’s likely not the case in Vermont.

Louis Porter with Washington Electric Coop says it’s time to reduce the size of net metering projects and allow utilities to pay a more competitive price for the power they generate.

“There are benefits to net metering, absolutely,” Porter said. “So determining what exactly the benefit versus the cost is, is hard. But I can say unequivocally that net metering is reducing the investment we have to put into the electric infrastructure necessary to deliver that power.”

But renewable developers push back on that, saying existing modeling doesn’t account for the climate benefit that net metering provides, and that the program has been successful in getting new solar built in Vermont.

“We’ve always felt like if there was a fair and comprehensive review of all the benefits of net metering, including the avoided cost of carbon, the net metering program would look like a really strong program,” said Peter Sterling, who leads Renewable Energy Vermont, which is the trade industry for the state’s solar sector.

What did the working group find, and what did they agree on?

There was fairly broad consensus that Vermont should require most big utilities to get to 100% renewable electricity by 2030. But members of the working group disagreed about how to get there.

A coalition of environmental groups, renewable developers and utilities proposed a plan to customize regulations for different types of utilities in the state.

Among other changes, they pitched a new requirement for utilities to buy power from new renewable projects from around New England built since 2010, like a solar farm in Massachusetts or offshore wind, for example.

More from Vermont Public: The connection between extreme rain and climate change in Vermont

They also proposed doubling the amount of power the two biggest utilities in the state, Vermont Electric Cooperative and Green Mountain Power, buy from new in-state renewables.

Proponents of the plan say this will help Vermont utilities hold on to more of the rights to the renewable resources they've already developed in the state, where current policy incentivizes them to sell the rights to that power, often to utilities in other New England states.

And for utilities that are already 100% renewable, they’d have to buy more of the additional power they need as Vermont electrifies from new renewables in New England.

Smaller utilities, such as the municipal ones, would have until 2035 to meet some of these requirements.

But importantly, under this proposal, none of the environmental groups at the table proposed eliminating existing large-scale hydropower or existing biomass from what Vermont defines as “existing renewables” — unlike what 350Vermont and Third Act called for at their press conference this fall.

However, large-scale hydropower or expansions of large-scale hydropower that involve methane-intensive flooding would not count as part of the “new renewables” category. Additionally, the proposal would make it very difficult for biomass to count.

Utilities agreed to this compromise in part because it proposes an end to group net-metering, which they say would save costs for their customers.

As is pretty common in Vermont, this coalition of environmental groups, renewable developers and utilities was tasked with writing a bill that lawmakers could use as a starting point this session to make changes.

However, the group was not able to achieve consensus on language for a bill.

How much would transitioning to 100% renewable electricity by 2030 affect electric rates?

TLDR: this policy move will raise rates… but likely only modestly.

Modeling showed that at most, going to 100% renewable power by 2030 and getting more of that power from new in-state and regional resources would raise rates about 6% in 2030, over what they would be if we did nothing.

That’s not nothing, but it’s small relative to the 11% rate increases we saw utilities apply for last year alone.

Now, it's important to note that the model used to arrive at these numbers doesn't include upgrades to Vermont's electric grid — poles and wires — that will be needed as we add new renewables (or for that matter as the existing infrastructure simply ages out of its useful life).

It's difficult to say what those costs might be, but TJ Poor, director of regulated utility planning at the Department of Public Service says they could be substantial.

The Department of Public Service is still working on those figures, but is hoping to have them during the coming Legislative session.

Additionally, the rate estimates don't factor in land use impacts, like converting forests for solar arrays.

The specific plan put forward by the coalition of utilities, environmental groups and renewable developers was not part of this modeling, but included some aspects of the scenarios that consultants studied.

An important note: data shows it’s the poorest households in the state who spend the biggest share of their income on electricity, so any rate increase will be felt more powerfully by them.

Do we know anything about what Vermonters want when it comes to their electricity?

The Department of Public Service recently did some polling about this. And broadly, Vermonters said reliability and affordability are the most important things to them when it comes to their electricity. But protecting natural resources and reducing emissions also mattered… just less.

There was a partisan divide here too, with Democrats saying reducing emissions was very important.

More from Vermont Public: Burlington approves plan that could cut UVMMC's fossil fuel consumption, despite opposition

About half of people surveyed said they would be willing to pay more per month for 100% renewable electricity. But they didn’t have strong feelings about whether that renewable power came from within Vermont’s borders or elsewhere.

What happens next?

Democratic leadership in the Vermont Legislature has been signaling that updating the Renewable Energy Standard will be a big priority for them this session. It’s a big political undertaking, and it could take a few years.

A bill is expected to start in the House.

Have questions, comments or tips? Send us a message, or contact reporter Abagael Giles:

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Updated: December 29, 2023 at 3:57 PM EST
This story has been updated to include more context about the modeling that was used to predict rate impacts if Vermont requires its electric utilities source 100% of their power from renewables by 2030, after speaking with the Department of Public Service. We've updated the headline as well.
Abagael is Vermont Public's climate and environment reporter, focusing on the energy transition and how the climate crisis is impacting Vermonters — and Vermont’s landscape.

Abagael joined Vermont Public in 2020. Previously, she was the assistant editor at Vermont Sports and Vermont Ski + Ride magazines. She covered dairy and agriculture for The Addison Independent and got her start covering land use, water and the Los Angeles Aqueduct for The Sheet: News, Views & Culture of the Eastern Sierra in Mammoth Lakes, Ca.
A graduate of NYU with a Master's Degree in journalism, Mitch has more than 20 years experience in radio news. He got his start as news director at NYU's college station, and moved on to a news director (and part-time DJ position) for commercial radio station WMVY on Martha's Vineyard. But public radio was where Mitch wanted to be and he eventually moved on to Boston where he worked for six years in a number of different capacities at member station WBUR...as a Senior Producer, Editor, and fill-in co-host of the nationally distributed Here and Now. Mitch has been a guest host of the national NPR sports program "Only A Game". He's also worked as an editor and producer for international news coverage with Monitor Radio in Boston.