Vermont first state to pass renewable energy feed-in law

Vermont has become the first U.S. state to adapt a full system of renewable energy feed-in tariffs, a program that closely resembles Ontario’s Green Energy Act (http://www.greenenergyact.ca/) passed into law in mid-May. Several U.S. states are considering similar legislation.

Vermont Gov. James Douglas allowed H.446, An Act Relating to Renewable Energy and Energy Efficiency, to become law without his signature on May 27.

The new legislation puts in place a “standard offer” that will establish minimum rates to be paid by electric customers for various renewable sources in long-term fixed-price contacts.

In a letter summarizing his concerns with the bill, Douglas said although he supports the development of renewable energy within the state, he believes the bill “fails to recognize the current viability of renewable energy in a competitive setting and will needlessly increase costs to Vermont consumer so as to subsidize this one favored business sector.”

Rather than vetoing the bill, Douglas allowed its passage without his signature because the Vermont Public Service Board is required to revisit the set rates within the next four months and periodically thereafter to determine whether the prices are inadequate or excessive.

Currently, the statute grants methane from a landfill or agriculture operation 12 cents per kilowatt hour (kWh) for facilities up to 2.2 megawatts, 20 cents per kWh for wind power facilities up to 15 kilowatts, and 30 cents per kWh for solar power facilities up to 2.2 megawatts.

The Vermont PSB has until Sept. 15 to open and complete a noncontested case docket to determine whether the standard offer prices constitute a reasonable approximation of the prices required to meet the bill’s criteria.

If the PSB decides to establish new prices, it has until Jan. 15, 2010, to set prices for standard offers. To see the bill in its entirety, go to http://www.revermont.org/documents/H-446_001.pdf.

Gov. Douglas recently signed into law H. 152, An Act Relating to Encouraging Biomass Energy Production, which creates a biomass energy development working group to investigate and recommend fiscal and regulatory incentives for biomass energy, as well as guidelines and standards for maintaining forest health, procurement standards and other policy considerations for biomass development within the state.