The Vermont Public Utility Commission, in an order entered on May 2, said that it is requesting comments by May 24 on its draft proposed Renewable Energy Standard (RES) Rule.
As noted in the order, the RES requires Vermont electric utilities to acquire specified amounts of renewable energy in the form of renewable energy credits (RECs) or environmental attributes, and to achieve fossil fuel and greenhouse gas reductions by implementing energy transformation projects. The commission said that an energy transformation project is an undertaking that provides energy related goods or services, but does not include or consist of the generation of electricity and that results in a net reduction in fossil fuel consumption by the customers of a retail electricity provider and in the emission of greenhouse gases attributable to that consumption. Examples of energy transformation projects may include home weatherization or other thermal energy efficiency measures, the commission said.
The commission noted that its staff last November opened an investigation to begin the process of drafting the RES Rule. While the RES is presently authorized under statute and implemented by order, the Vermont General Assembly in 2018 directed the commission to adopt a rule to implement the RES and required that the commission begin by July 1 the formal rulemaking process – i.e., submittal to the Interagency Committee on Administrative Rules.
The commission added that its staff convened two workshops about the rulemaking and requested that stakeholders provide comments about the RES processes and provisions, currently implemented by order, that may need changes or improvements.
The RES is divided into three categories, referred to as “Tiers,” the commission said, noting that Tier I, for instance, requires the electric utilities to procure an amount of renewable energy equivalent to 55% of their annual retail electric sales for the year 2017, increasing by 4% every third Jan. 1 thereafter, eventually reaching 75% in 2032.
Tier II requires that a portion of the renewable energy that the utilities procure to satisfy Tier I be from distributed renewable generation resources, the commission said, adding that under Tier II, the utilities must procure an amount of renewable energy equivalent to 1% of their annual retail electric sales from distributed renewable generation resources in 2017, increasing by three-fifths of a percent each year thereafter, eventually reaching 10% in 2032.
Tier III requires retail electricity providers to procure additional distributed renewable generation eligible for Tier II or to achieve fossil fuel reductions from energy transformation projects equivalent to 2% of their annual retail electric sales in 2017, increasing by two-thirds of a percent each year thereafter, eventually reaching 12% in 2032.
The commission said that it received comments that additional efforts should be made to ensure appropriate tracking of environmental attributes associated with energy imports from external control areas, such as the New York Power Authority (NYPA), which the utilities may use to comply with Tier I of the RES.
The commission said that it proposes requiring that the NYPA attributes be tracked in the New England Power Pool Generation Information System (NEPOOL GIS), noting that requiring tracking in GIS would protect against duplicative claims being made on those attributes and would help to streamline compliance review processes.
Regarding the Hydro-Québec attributes, the commission said that it is its understanding that those attributes cannot be monitored in GIS and therefore, it proposes removing the requirement in a June 2016 order that the utility demonstrate its ownership of those attributes through retirement of the attributes as they are monitored in GIS, even if the utility claims a different value for the environmental attributes than that displayed in GIS.
The commission also said that stakeholders provided comments on improving the transparency of the Technical Advisory Group (TAG) process for prior approval of energy transformation measures. The commission said that it proposes including a provision in the rule requiring TAG meetings related to energy transformation measures to be noticed and open to the public, as well as for time to be included in meeting agendas for public input.
In addition, the commission noted that during the review of utilities’ 2017 Tier III annual reports, questions were raised about whether certain weatherization projects qualify under the RES. The commission said that it has proposed language to help identify low-income weatherization projects that qualify for the RES, and that it requests that stakeholders provide comment on the average cost to create 1 MWh of energy savings with low-income weatherization.
Among other things, the commission said that it received comments raising concerns about allowing utilities to count the nuclear portion of their power portfolios when determining the fossil fuel savings from their energy transformation projects. While the statute states that nuclear energy is not renewable energy, the Tier III requirements do not require that fossil fuel savings from energy transformation project electrification measures be from renewable energy. An energy transformation project powered by electricity generated in part by nuclear power will reduce fossil fuel use and the emission of greenhouse gases, the commission added, noting that it is not proposing to include anything in the draft rule on that issue.
The commission said that it is seeking comments on whether a utility may use nuclear attributes purchased separately from nuclear power to increase the carbon-free portion of its power portfolio; whether the RES statute prohibits that; and if the RES statute does not prohibit it, whether the rule should.