(Host) A federal ruling has cast doubt on a Vermont program designed to promote renewable energy.
The ruling says utilities should not pay more than market rates for electricity from the clean-energy projects.
The state agency that represents consumers wants to know how the decision affects projects in Vermont, so it’s asked the state attorney general’s office for legal advice.
VPR’s John Dillon reports:
(Dillon) Vermont was the first state to offer guaranteed rates to a variety of renewable energy projects. Under the program, developers of solar projects, for example, will get paid 30 cents a kilowatt hour for the electricity they produce.
That relatively high rate – and a 50 megawatt cap allowed under the program – spurred huge interest from solar energy entrepreneurs. There were so many proposals for the first round that they had to be decided by a lottery. They include rooftop solar arrays in Burlington and an energy park planned for a former racetrack in Pownal.
But now a federal ruling on a similar program in California could undercut the state’s authority to set the higher rates for solar or other projects.
The Federal Energy Regulatory Commission said utilities should not pay more for renewable energy than they would for other sources of power.
(O’Brien) "Ultimately it could have a very serious impact on the program."
(Dillon) David O’Brien is commissioner of the Department of Public Service, the state agency that represents consumers. He says the federal ruling creates uncertainty for developers and lenders in Vermont. And his department has asked the state attorney general for advice on how the ruling affects Vermont.
(O’Brien) "We’re simply putting it out there that it’s possible that this order would apply to our program and therefore there could be significant changes in front of us."
(Dillon) O’Brien and the Douglas administration opposed the incentive program because of the potential impact on electricity rates. And renewable energy developers and advocates say the state should not overreact.
Lawrence Mott is the chairman of Renewable Energy Vermont, which lobbied hard for the Vermont incentive program. He says Vermont should push back on the FERC decision.
(Mott) "Vermont is in an excellent position to be a leader here and stand up to the FERC as a state and be very clear and enunciate why we did what we did and why our law and policy is rational and does not fall under the FERC ruling."
(Dillon) Ernie Pomerleau is a real estate developer who is planning a 1 megawatt solar project in Ferrisburgh. Pomerleau says he has a contract with the state that sets the electric rate. And he says the FERC ruling should not undermine that contract.
(Pomerleau) "I’ve got panels on a truck. I’m starting in September. So it’s not about predictability. It’s now about fairness. I have an executed contract with the state. It’s very different than California."
(Dillon) Pomerleau says the California ruling is preliminary and may not bear on Vermont. A lawyer for the renewable developers agrees. He says that in other cases the FERC has not gone back and altered existing power contracts.
For VPR News, I’m John Dillon in Montpelier.