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H.859

Introduced by   Committee on Natural Resources and Energy

Date:

Subject:  Public service; net metering; SPEED resources; commercial building energy standards

Statement of purpose:  This bill proposes to establish a process for engaging the public in power planning issues.  It proposes to allow the clean energy fund to finance distribution line upgrades to serve a farm generating system.  It proposes to give the commissioner of public service the authority to amend the residential building energy standards.  It proposes to establish commercial building energy standards according to a system that generally reflects the approach currently in law that pertains to residential building energy standards.  It proposes to direct the public service board, in decisions related to financing the efficiency utility, to give particular emphasis to reducing the need for future power purchases, reducing the generation of greenhouse gases, and limiting the need to upgrade the state’s transmission and distribution infrastructure.  It proposes to require the public service board to design rates to encourage the efficient use of natural gas and electricity, including consideration of inclining block rate structures for residential rate customers.  It proposes to expand the type of renewable sources that are eligible for net metering and to provide that any unused credit reverting to the electric company shall be considered SPEED resources.  It proposes to allow the board to raise the 1.0 percent cap on net metering and allows utilities to charge fees related to systems of greater than 15 kilowatt capacity.  It proposes to require the public service board to expand the scope of net metering and in this process to consider expanding the maximum capacity of systems in the program and to consider allowing group net metering, as determined by the board.  It proposes to require timely decisions on applications for SPEED resources and to encourage joint efforts by regulated companies to purchase power.  It proposes to require a study of establishing a coordinated program to provide efficiency to all buildings, regardless of source of fuel and owner’s income.  It proposes to consolidate two biennial SPEED reports into one.  It proposes to remove mandatory hearing language and allows the public service board to contract with an administrator, after the SPEED rules have been adopted.  Finally, it proposes to appropriate funds for the public participation process established in the bill.

AN ACT RELATING TO THE ENERGY SECURITY AND RELIABILITY ACT

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  DESIGNATION OF ACT

This act shall be referred to as the Vermont energy security and reliability act.

Sec. 2.  PUBLIC ENGAGEMENT IN POWER PLANNING

(a)  The department of public service shall conduct a comprehensive statewide public engagement process on energy planning, focused on electric energy supply choices facing the state beginning in 2012.  The purpose of the process shall be to educate the public about the electric energy supply challenges facing the state; to gather meaningful and informed public input about values and preferences of Vermonters regarding electric energy supply; and, by achieving the first two objectives, to provide, as much as possible, broad-based public acceptance of the resulting choices.

(b)  The department of public service, in consultation with the joint energy committee, shall develop and implement a public engagement process through a request for proposal (RFP) process that meets the following requirements:

(1)  to provide a strong information dissemination component, in order to develop a shared foundation of credible information that may serve as a basis for engaging in a meaningful dialogue;

(2)  to be conducted in a manner that recognizes that potential choices for Vermont’s electric energy supply may be precluded by the passage of time;

(3)  to engage a broad base of Vermonters, including those who are currently engaged in energy issues as well as those who have not yet been engaged; and

(4)  to reach throughout the state, as all Vermonters are stakeholders in this issue.

(c)  By January 15, 2007, the commissioner of public service shall submit a report to the legislative committees on natural resources and energy, on commerce, and on finance describing the progress of the public education and engagement process. 

Sec. 3.  10 V.S.A. § 6523 is amended to read:

§ 6523.  VERMONT CLEAN ENERGY DEVELOPMENT FUND

(a)  Creation of fund.

(1)  There is established the Vermont clean energy development fund to consist of:

* * *

(d)  Expenditures authorized.

* * *

(4)  Projects for funding may include the following:

* * *

(D)  renewable energy projects on farms, which shall include the costs incurred to upgrade a three-phase line to serve a system on a farm;

* * *

Sec. 4.  21 V.S.A. chapter 3, subchapter 9 is redesignated to read:

Subchapter 9.  Residential Building Energy Standards

Sec. 5.  21 V.S.A. § 266(c) is amended to read:

(c)  Revision and interpretation of energy standards.  On or about January 1, 1999, and at least every three years thereafter, the commissioner of labor and industry public service shall amend and update the RBES, by means of administrative rules adopted in accordance with 3 V.S.A. chapter 25.  The department of public service shall provide technical assistance and expert advice to the commissioner in the interpretation of the RBES and in the formulation of specific proposals for amending the RBES.  At least a year prior to final adoption of each required revision of the RBES, the department of public service shall convene an advisory committee to include one or more mortgage lenders, builders, building designers, utility representatives, and other persons with experience and expertise, such as consumer advocates and energy conservation experts.  The advisory committee may provide the commissioner with additional recommendations for revision of the RBES.

(1)  Any amendments to the RBES shall be:

(A)  Consistent with duly adopted state energy policy, as specified in 30 V.S.A. § 202a, and consistent with duly adopted state housing policy.

(B)  Evaluated relative to their technical applicability and reliability.

(C)  Cost-effective and affordable from the consumer’s perspective.

* * *

(6)  The advisory committee convened under this subsection, in preparing for the RBES update required on or about January 1, 1999, shall advise the department of public service and the commissioner of labor and industry public service with respect to the coordination of the RBES amendments with existing and proposed demand side management programs offered by utilities.

* * *

Sec. 6.  21 V.S.A. § 268 is added to read:

§ 268.  COMMERCIAL BUILDING ENERGY STANDARDS

(a)  Definitions.  For purposes of this subchapter, “commercial buildings” means all buildings that are not residential buildings.

(1)  The following buildings, or portions of those buildings, separated from the remainder of the building by thermal envelope assemblies complying with this section shall be exempt from the building thermal envelope provisions of the standards:

(A)  Those that do not contain conditioned space.

(B)  Those with a peak design rate of energy usage less than an amount specified in the commercial building energy standards (CBES).

(C)  Greenhouses.  Structures used exclusively for nonretail horticulture purposes and applications that do not use mechanical ventilation or artificial illumination.

(D)  Barns.  Structures for the purpose of housing, maintaining, controlling, and processing (such as milking and shearing) animals and for storage of hay and other field products.  Barns in this definition are not intended for occupancy by humans or for day-long occupancy of humans to perform their applicable duties.

(2)  These standards shall not apply to equipment or portions of building energy systems that use energy primarily to provide for industrial, manufacturing, or commercial processes.

(b)  Adoption of commercial building energy standards.  Commercial building construction with respect to which no state or local permit application has been submitted on or after January 1, 2007 shall be in compliance with the standards contained in the 2005 Vermont Guidelines for Energy Efficient Commercial Construction, as those standards may be amended by administrative rule adopted by the commissioner of public service.

(c)  Revision and interpretation of energy standards.  On or about January 1, 2009, and at least every three years thereafter, the commissioner of public service shall amend and update the CBES by means of administrative rules adopted in accordance with 3 V.S.A. chapter 25.  At least a year prior to final adoption of each required revision of the CBES, the department of public service shall convene an advisory committee to include one or more mortgage lenders, builders, building designers, utility representatives, and other persons with experience and expertise, such as consumer advocates and energy conservation experts.  The advisory committee may provide the commissioner of public service with additional recommendations for revision of the CBES.

(1)  Any amendments to the CBES shall be:

(A)  Consistent with duly adopted state energy policy, as specified in 30 V.S.A. § 202a.

(B)  Evaluated relative to their technical applicability and reliability.

(2)  Each time the CBES are amended by the commissioner of public service, the amended CBES shall become effective upon a date specified in the adopted rule, a date that shall not be less than three months after the date of adoption.  Persons submitting an application for any state or local permit authorizing commercial construction before the effective date of the amended CBES shall have the option of complying with the applicable provisions of the earlier or the amended CBES.  After the effective date of the original or the amended CBES, any person submitting an application for any state or local permit authorizing commercial construction in an area subject to the CBES shall comply with the most recent version of the CBES.

(3)  The advisory committee convened under this subsection, in preparing for the CBES updates, shall advise the department of public service with respect to the coordination of the CBES amendments with existing and proposed demand‑side management programs offered in the state.

(d)  Certification requirement.  Commercial buildings shall be certified as compliant with CBES in accordance with this subsection.  A certification may be issued by a builder, a licensed professional engineer, or a licensed architect.  If certification is not issued by a licensed professional engineer or a licensed architect, it shall be issued by the builder.  Any certification shall certify that commercial construction meets the CBES.  The department of public service will develop and make available to the public a certificate that lists key features of the CBES.  Any person certifying shall use this certificate or one substantially like it to certify compliance with CBES.  Certification shall be issued by completing and signing a certificate and permanently affixing it to the outside of the heating or cooling equipment, to the electrical service panel located inside the building, or in a visible location in the vicinity of one of these three areas.  The certificate shall certify that the building has been constructed in compliance with the requirements of the CBES.  The person certifying under this subsection shall provide a copy of each certificate to the department of public service and shall assure that a certificate is recorded and indexed in the town land records.  A builder may contract with a licensed professional engineer or a licensed architect to issue certification and to indemnify the builder from any liability to the owner of the commercial construction caused by noncompliance with the CBES.

(e)  Action for damages.

(1)  Except as otherwise provided in this subsection, a person aggrieved by noncompliance with this section may bring a civil action against a person who has the obligation of certifying compliance under subsection (d) of this section.  This action may seek injunctive relief, damages, court costs, and attorneys’ fees.  As used in this subdivision, “damages” means:

(A)  costs incidental to increased energy consumption; and

(B)  labor, materials, and other expenses associated with bringing the structure into compliance with CBES in effect on the date construction was commenced.

(2)  A person’s failure to affix the certification as required by this section shall not be an affirmative defense in such an action against the person.

(3)  The rights and remedies created by this section shall not be construed to limit any rights and remedies otherwise provided by law.

(f)  Title validity not affected.  A defect in marketable title shall not be created by a failure to issue certification or a certificate, as required under subsection (d) of this section, or by a failure under that subsection to:  affix a certificate; provide a copy of a certificate to the department of public service; or record and index a certificate in the town records.

Sec. 7.  30 V.S.A. § 209(d) is amended to read:

(d)(1)  The public service department, any entity appointed by the board under subdivision (2) of this subsection, all gas and electric utility companies, and the board upon its own motion, are encouraged to propose, develop, solicit, and monitor energy efficiency and conservation programs and measures, including appropriate combined heat and power systems that result in the conservation and efficient use of energy and meet the applicable agency of natural resources’ air quality standards.  Such programs and measures, and their implementation, may be approved by the board if it determines they will be beneficial to the ratepayers of the companies after such notice and hearings as the board may require by order or by rule.

* * *

(4)  The charge established by the board pursuant to subdivision (3) of this subsection shall be in an amount determined by the board by rule or order that is consistent with the principles of least cost integrated planning as defined in section 218c of this title.  As circumstances and programs evolve, the amount of the charge shall be reviewed for unrealized energy efficiency potential and shall be adjusted as necessary in order to realize all reasonably available, cost-effective energy efficiency savings.  In setting the amount of the charge and its allocation, the board shall determine an appropriate balance among the following objectives:, provided, however, that particular emphasis shall be accorded to the first three of these objectives:  reducing the size of future power purchases; reducing the generation of greenhouse gases; limiting the need to upgrade the state’s transmission and distribution infrastructure; providing efficiency and conservation as a part of a comprehensive resource supply strategy; providing the opportunity for all Vermonters to participate in efficiency and conservation programs; and the value of targeting efficiency and conservation efforts to locations, markets or customers where they may provide the greatest value.  The board, by rule or order, shall establish a process by which a customer may apply to the board for an exemption from some or all of the charges assessed under this subdivision.  The board shall establish criteria by which these applications shall be measured.  Any such exemption shall extend for a period of time not to exceed one year.  In addition, the board may authorize exemptions only if, at a minimum, a customer demonstrates that, during the preceding year, it implemented an extraordinary amount of cost-effective energy efficiency at the customer’s own expense or incurred extraordinary costs on those measures and the customer did not and will not receive reimbursement for those measures from the entity designated by the board under this section.

Sec. 8.  30 V.S.A. § 218(b) is amended to read:

(b)  The department of public service shall propose, and the board through the establishment of rates of return, rates, tolls, charges, or schedules shall encourage the implementation by electric and gas utilities of energy-efficiency and load management measures which will be cost-effective for the utilities and their customers on a life cycle cost basis.  The board shall design rates to encourage the efficient use of natural gas and electricity, including consideration of the creation of an inclining block rate structure for residential rate customers with an initial block of low‑cost power available to all residences.

Sec. 9.  30 V.S.A. § 219a is amended to read:

§ 219a.  SELF-GENERATION AND NET METERING

(a)  As used in this section:

* * *

(3)  “Net metering system” means a facility for generation of electricity that:

* * *

(E)  employs a renewable energy source and utilizes a photovoltaic array, wind turbine, fuel cell, biomass gasification and farm electrical generating technology as defined in subdivision 8002(2) of this title.

* * *

(e)  Consistent with the other provisions of this title, electric energy measurement for net metering systems using a single nondemand meter that are not farm systems shall be calculated in the following manner:

* * *

(3)  If electricity generated by the customer exceeds the electricity supplied by the electric company:

* * *

(C)  At the beginning of each calendar year, any remaining unused kilowatt-hour credit accumulated during the previous year Any accumulated kilowatt-hour credits shall be used within 12 months, or shall revert to the electric company, without any compensation to the customer.  Power reverting to the electric company under this subdivision (3) shall be considered SPEED resources under section 8005 of this title.

* * *

(f)  Consistent with the other provisions of this title, electric energy measurement for net metering farm systems shall be calculated in the following manner:

* * *

(3)  If electricity generated by the farm system exceeds the electricity supplied by the electric company:

* * *

(C)  Any accumulated kilowatt-hour credits shall be used within 12 months or shall revert to the electric company without any compensation to the farm system.  Power reverting to the electric company under this subdivision (3) shall be considered SPEED resources under section 8005 of this title.

* * *

(h)(1)  An electric company:

(A)  Shall make net metering available to any customer using a net metering system or farm system on a first-come, first-served basis until the cumulative generating capacity of net metering systems equals 1.0 percent of the distribution company’s peak demand during 1996; or the peak demand during the most recent full calendar year, whichever is less; provided, however, an electric company and a farm system may jointly petition the board to exceed this capacity greater.  The board may raise the 1.0 percent cap.  In determining whether to exceed raise the cap, the board shall consider the following:

* * *

(E)  May charge reasonable fees for interconnection, establishment, special meter reading, accounting, account correcting, and account maintenance of farm system net metering arrangements of greater than 15 kilowatt (AC) capacity;

* * *

(H)  May book and defer, with carrying costs, additional incremental costs, to the extent that such costs are not recovered through charges, authorized in subdivisions (D), (E), and (F) of this subdivision (1), directly related to implementing farm system net metering of greater than 15 kilowatt (AC) capacity;

* * *

Sec. 10.  30 V.S.A. § 219b is added to read:

§ 219b.  NET METERING PROGRAM EXPANSION

The public service board shall expand the scope of the net metering program established in section 219a of this title, by rule or order, in accordance with the provisions of this section.  As part of this expansion, the board shall consider:

(1)  expanding the maximum kilowatt (AC) capacity of facilities that may participate in the program;

(2)  allowing group net meter systems and defining membership in the group, which may be limited to, but need not be limited to, groups that consist of:

(A)  physically contiguous customers; and

(B)  a municipal customer for municipal and school uses, regardless of whether those uses are contiguous;

(3)  providing compensation to the customer for any remaining unused kilowatt-hour credit accumulated during the previous 12 months;

(4)  developing a system to capture and sell renewable energy credits (RECs)  from net metering; and

(5)  allowing net metering systems to be considered SPEED resources.

Sec. 11.  30 V.S.A. § 8004(f) is amended to read:

(f)  Before December 30, 2007 and again before December 30, 2009 biennially thereafter through December 30, 2013, the public service board shall file a report with the senate committees on finance and on natural resources and energy and the house committees on commerce and on natural resources and energy.  The report shall include the following:

(1)  the total cumulative load growth in electric energy usage in Vermont from 2005 through the end of the year that precedes the date on which the report is due;

* * *

(7)  an assessment of the energy efficiency and renewable energy markets and recommendations to the legislature regarding strategies that may be necessary to encourage the use of these resources to help meet upcoming supply requirements; and

(8)  any recommendations for statutory change related to this section, including recommendations for rewarding utilities that make substantial investments in SPEED resources; and

(9)  the board’s recommendations on how the state might best continue to meet the goals established in section 8001 of this title, including whether the state should meet its growth in energy usage over the succeeding 10 years by a continuation of the SPEED program.

Sec. 12.  30 V.S.A. § 8005 is amended to read:

§ 8005.  SUSTAINABLY PRICED ENERGY ENTERPRISE

              DEVELOPMENT (SPEED) PROGRAM

* * *

(b)  The SPEED program shall be established, after notice and hearing by rule, order, or contract, by the public service board by January 1, 2007.  As part of the SPEED program, the public service board may:

* * *

(7)  establish a method for Vermont retail electrical providers to obtain beneficial ownership of the renewable energy credits associated with any SPEED projects, in the event that a renewable portfolio standard is in comes into effect under the provisions of section 8004 of this title;

* * *

(d)(1)  The public service board shall meet on or before January 1, 2012, open a proceeding, and issue findings determining the amount of qualifying SPEED resources that have come into service or are projected to come into service during the period of time between January 1, 2005 and January 1, 2013.  If the board finds that the amount of qualifying SPEED resources coming into service during that time exceeds total statewide growth in demand electric energy usage during the period of time between January 1, 2005 and January 1, 2012, or if it finds that the amount of qualifying SPEED resources exceeds 10 percent of total statewide load electric energy usage for calendar year 2005, the portfolio standards established under this chapter shall not be in force.  The board shall make its determination by July 1, 2012.  If the board finds that the goal established has not been met, one year after the board's determination the portfolio standards established under subsection 8004(b) of this title shall take effect.

* * *

(e)  By no later than September 1, 2006, the public service board shall provide, by order or rule, the regulations and procedures that are necessary to allow the public service board and the department of public service to implement, and to supervise further the implementation and maintenance of the SPEED program.  These rules shall assure that decisions with respect to certificate of public good applications for SPEED resources shall be made in a timely manner.

(f)  In order to encourage joint efforts on the part of regulated companies to purchase power that meets or exceeds the SPEED standards and to secure stable, long‑term contracts beneficial to Vermonters, the board may establish standards for pre-approving the recovery of costs incurred on a SPEED project that is the subject of that joint effort.

Sec. 13.  EFFICIENCY UTILITY STUDY

The department of public service is directed to conduct a study that analyzes the related costs and benefits of establishing a coordinated and comprehensive program to maximize cost‑effective energy efficiency in all buildings, regardless of a particular building’s source of fuel and regardless of the income of the building owner.  The study should specifically consider various program options to reduce consumption of oil, kerosene, propane, and other fuels not provided by utilities under the jurisdiction of 30 V.S.A. § 209.  The results of the study shall be provided to the general assembly by January 15, 2007.

Sec. 14.  APPROPRIATIONS

There is appropriated $50,000.00 from the general fund during fiscal year 2007 to the department of public service for the public engagement process established under this act.

Sec. 15.  REPEAL

Subsection (b) of Sec. 13 of No. 61 of the Acts of 2005 (biennial report on meeting goals and on future of SPEED) is repealed.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us