Cow Power Producers Get Boost In Rates

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(Host) The farmers who make electricity from cow waste will soon get a temporary boost in their rates.

The state Public Service Board has responded to complaints from farmers and lawmakers – and has agreed to double the payment under the "Cow Power" program.

VPR’s John Dillon reports:

(Dillon) Central Vermont Public Service has gained national attention and favorable publicity from its Cow Power program.

The program has environmental benefits. Farmers turn a waste product into electricity – and reduce pollution in the process. But Cow Power backfired on the farmers this year. They’re paid partly based on a price that’s pegged to the wholesale market of electricity. And that price has dropped to the point where it no longer covered the farmer’s cost of making the electricity.

(Rowell) "So now we were producing power that was not sustainable for us."

(Dillon) Bill Rowell and his family run a large dairy farm in Franklin County. The cows make about 23 million pounds of milk a year – and 2 million kilowatt hours of electricity.

Rowell was one of the early producers of Cow Power. And his farm is among the three that will benefit from the new, temporary rate established by the Public Service Board.

(Rowell) "So the idea was to come up with an interim rate to make it possible to sustain our operation."

(Dillon) The Public Service Board pegged the new rate at 8 cents per kilowatt hour. That’s about twice what farmers were getting after the bottom dropped out of the wholesale electricity market. Farmers also get a premium that’s paid for by utility customers who sign up for the Cow Power.

Steve Costello is a spokesman for CVPS. He said the new rate is set for 180 days.

(Costello) "It’s a balancing act at this point, but we’re very pleased the board has given us the ability to pay them a little more for the short term while we work on a long-term solution."

(Dillon) The Public Service Board also recently set a much higher rate of 16 cents a kilowatt hour for new producers of farm- generated electricity.

The board set that rate under a new program that is supposed to jump-start the development of renewable energy. Bill Rowell says that the early developers like his farm should get the higher price as well.

(Rowell) "I think the only fair way to do it, if you had people make the first investment to develop the industry and be the guinea pigs, so to speak, is to move everyone forward. And if society wants everyone to enjoy these environmental benefits, why would you exclude the pioneers in the first place?"

(Dillon) Representative Chris Bray is a New Haven Democrat who worked on the Cow Power issue. He says he’ll try to find a legislative solution when lawmakers return next month. He agrees with Rowell that one answer may be to incorporate the existing farms into the new, renewable program, called the "standard offer."

(Bray) "In essence, they’ve been research and development laboratories for all the farms that will come in under the standard offer that are going to benefit from. And if we’re going to recognize that value of sharing knowledge and moving it forward, then I think it would make sense to me that we would cover the very farms that got us started in the first place."

(Dillon) CVPS says the new temporary Cow Power rate will have negligible impact on its customers.

For VPR News, I’m John Dillon in Montpelier.

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