The Vermont Energy Act (H. 446) passed in May 2009, impacts the SPEED Program, notably because it requires all Vermont electricity providers* to purchase electricity generated by eligible renewable energy facilities via standard offer contract with set rates. The overall goals discussed below were not changed in the legislation, but it is likely that the Vermont Public Service Board (PSB) will amend the SPEED program rules in implementing the standard offer contract provisions.
Vermont's Sustainably Priced Energy Enterprise Development (SPEED) Program was created by legislation in 2005 to promote renewable energy development. The SPEED program itself is not a renewable portfolio goal or standard. However, if the Vermont Public Service Board (PSB) determines that the established minimum obligations of the SPEED program (described below) are not met, then the state's utilities would be required to meet a binding renewable energy portfolio standard (RPS), as established by law (30 V.S.A. § 8004).
The intent of the SPEED program is to promote renewable energy development by encouraging long-term contracts for electricity from renewable sources. Legislation enacted in March 2008 (
S.B. 209) established a goal** that 20% of total statewide electric retail sales before July 1, 2017, be generated by SPEED projects. Unlike most states in the Northeast, this program does not require utilities to procure the attributes; the renewable energy generators are free to sell their renewable energy credits (RECs) in other markets (e.g. other states’ RPS markets or voluntary green power programs). Utilities are expected to enter into long-term power purchase agreements (PPAs) for electricity with renewable energy generators certified as projects by the PSB, or to develop those SPEED projects themselves. A SPEED facilitator has been contracted to support this procurement process and match renewable energy generators (SPEED projects) with utilities looking to procure electricity.
To qualify as a SPEED project, the facility must be located in Vermont, must produce energy using renewables or qualifying CHP, and must come into service after December 31, 2004. In some situations, contracts with out-of-state renewables could also qualify toward meeting the goals for SPEED resources.*** There are provisions for qualifying existing facilities that have been upgraded or expanded as well. Eligible renewable energy resources include hydropower (up to 200 MW); methane (from landfill gas, anaerobic digesters, sewage-treatment facilities and farms); geothermal; solar energy, and wind -- as well as CHP or fuel cells that rely on one of the above mentioned fuel sources. Solid waste is explicitly excluded. The PSB is authorized to determine which, if any, additional renewable resources qualify.
The PSB must begin a proceeding on or before January 1, 2012, to determine the total amount of SPEED resources that have been supplied (or certified to supply) to Vermont retail electricity providers, and it must make a determination by January 1, 2013. The SPEED program will be deemed successful if one of the following two obligations is met:
- The amount of qualifying SPEED resources that came into service (or were issued a certificate) between January 1, 2005, and July 1, 2012, is equal to (or greater than) total statewide growth in retail electric sales during that same time period and at least 5% of the 2005 total retail electric sales in the state are provided by qualified SPEED resources; or
- The amount of qualifying SPEED resources equals or exceeds 10% of the retail electric sales in 2005 for the state of Vermont.
If neither criterion is met, then the RPS will become mandatory and will require the state's electric utilities to meet any increase in statewide retail electricity sales between 2005 and 2012 by using renewables with associated attributes, by purchasing RECs, or by making an alternative compliance payment to the Vermont Clean Energy Development Fund.
In addition, the March 2008 legislation (S.B. 209) established an entirely separate target of producing 25% of the
energy consumed within the state through the use of renewable energy sources by 2025, with an emphasis on farms and forests as part of the Vermont 25 by 25 Initiative. The Vermont Agency of Agriculture, Food and Markets, in consultation with the Vermont Department of Public Service (DPS) and the Vermont Department of Forests, Parks and Recreation, was required to present a plan for reaching this target to the Vermont General Assembly by January 15, 2009, and update the plan at least every three years thereafter. For a copy of the most recent plan, visit
www.vermontagriculture.com/energy.
*A retail electricity provider means a company engaged in the distribution or sale of electricity directly to the public.
** A renewable portfolio goal generally is not legally binding, as opposed to a renewable portfolio standard, which is legally binding.
*** The statute provides that electricity produced by a new renewable energy facility that is owned by or under long-term contract with a Vermont retail electricity provider outside of Vermont may be considered.
