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ACT SUMMARY 2007-2008

SUMMARY OF THE 2008 ACTS AND RESOLVES View the complete text of this act

ACT NO. 92


Act 250; energy efficiency

This act is designated as the “Vermont energy efficiency and affordability act.”

It makes it clear that the agricultural economic development special account shall be available for wind, solar, or other technology that consumes a resource at or below its natural regeneration rate. It amends the Act 250 definition of farming, an exempt activity, to include on-site storage, preparation, production, and sale of energy from agricultural waste or products produced off the farm, as long as 51 percent is from on-farm feedstock.

The act makes it a state goal to produce 25 percent of energy consumed in VT from renewable sources, particularly from farms and forests, by 2025. It requires the secretary of agriculture, food and markets, by 1/15/09, to present legislative committees with a plan to achieve this goal. This plan is to be updated triennially, and is to be the subject of an annual progress report every January 15. By 1/15/09, the department of public service is required to present legislative committees with an updated comprehensive energy plan which incorporates this plan.

The act establishes building efficiency goals, which are: (1) to improve 20 percent of housing by 2017 (more than 60,000 units), and to improve 25 percent of housing by 2020 (about 80,000 units); (2) to reduce fuel needs by 25 percent in units served; (3) to reduce fossil fuel consumption across all buildings by one-half percent per year, leading to reductions of six percent annually by 2017, and 10percent annually by 2025; (4) to save $1.5 billion on fuel bills through improvements installed between 2008 and 2017.

The act requires the commissioner of the department of public service to revise the residential building energy standards (RBES) and the commercial building energy standards (CBES) promptly after pertinent parts of the international energy conservation code (IECC) are updated. It adds architects and civil, mechanical, and electrical engineers to the CBES advisory committee while retaining “building designers.” It enables the commissioner of public service to grant variances or exemptions from CBES if compliance entails practical difficulty, unnecessary hardship, or is otherwise unwarranted, provided criteria in the section are met. Copies of variances and exemptions are required to be filed with the local land records and a record of each variance or exemption is to be maintained by the commissioner of public service. It substantially revises certification requirements for commercial buildings, so as to apply to both design and construction, and revises the provisions regarding who is qualified to certify. First, it requires design certification, possibly on a standard certificate developed by the public service department, accompanied by an affidavit affirming that the designer acted in accordance with the designer’s professional duty of care, and that the design is in substantial compliance with CBES. It enables the certifier to rely on affidavits of other persons for those parts that the others contributed. It also requires that certification be accompanied by an affidavit that construction was in accordance with the ordinary standard of care applicable to the building trades, and that construction was in substantial compliance with construction documents certified by the primary designer. Copies of the certificate and the affidavit shall be permanently affixed in a specified visible location in the building and shall be provided to the department of public service. A certificate must be obtained before a final occupancy permit for a commercial building may be obtained from the commissioner of public safety or a municipal official, in case of a delegated program. The act establishes a private right of action in superior court against a certifier by a person aggrieved by breach of representations in certification, within 10 years of earlier of complete construction or occupancy. The act narrows the scope of recoverable damages to exclude costs of labor and material, and the expenses required to correct noncompliance. It provides that a person knowingly making false certification or failing to certify faces a civil penalty of up to $250/day and $10,000/year. It provides that failure to provide a copy of a variance or exemption for land records, or failure to certify, display certification or give copy of certification to the department of public service will not create a defect in marketable title.

The act requires the public service board to continue its investigation of opportunities for electric utilities to install smart metering so as to allow users to respond cost-effectively to price signals, and requires the board, by 12/31/08, to issue a final report and implementation plan. The act provides that the plumber’s examining board rules may not require the installation or maintenance of a water heater at a minimum temperature.

The act, in 30 V.S.A. § 203a, establishes the fuel efficiency fund, from ratepayer funds, to be administered by a fund administrator appointed by the public service board, to contain appropriations, and revenues from the sale of Regional Greenhouse Gas Initiative (RGGI) credits. It provides that the fund may be used to support delivery of energy efficiency services to heating and process consumers by providers selected by the public service department under section 235 of Title 30. It requires the department to report on expenditures by 1/15/10, and annually thereafter, and allows it to use up to five percent of allocations for certain administrative costs.

In 30 V.S.A. § 235, the act establishes the heating and process fuel efficiency program. This section requires the department of public service to consult with stakeholders, develop an efficiency program, and select service providers to implement the program by means of performance-based contracts, which are limited to three years in duration if the contract is made within one year of the effective date of the act. The programs are to produce whole building efficiency, facilitate appropriate fuel switching, and promote coordination with electric efficiency programs and other programs. The board is to review the programs, prior to the department entering these contracts, and may revise them. Oversight criteria are similar to those applying to the electric efficiency entity. Funding for the program is to come from the energy efficiency fund established under 30 V.S.A. § 203a. Any contracts or grants that are nonadministrative and are made during the 2009 fiscal year shall be subject to appropriation by the general assembly. The department shall present the joint fiscal committee at its November 2008 meeting with a preliminary report on the program to be presented to the board. The act requires the department to implement this section with all deliberate speed, and makes it a goal for the department to issue RFPs by no later than the end of October 2008. Initial service providers shall be selected no later than 4/1/2009.

The act revises statutes underlying the existing efficiency entity in a number of ways, requiring the department of public service to investigate expanding efficiency programs of gas utilities and make recommendations to the board. It provides that appointment of an efficiency utility to provide services in the territory of a regulated utility does not satisfy the efficiency obligations of transmission companies. It names the current fund the “electric efficiency fund.” It revises the process for self-administration of the efficiency program. It provides that the appointment of the efficiency utility may be by contract or order of appointment, and gives the board powers over the entity. It requires the deposit into the electrical efficiency fund of net revenues above costs from the New England Independent System Operator (ISO-NE) for capacity savings from the activities of the existing energy efficiency entity. It requires the board to expand the efficiency program to consumers, regardless of heating fuel or process fuel provider; and to use compensation mechanisms based on verified savings in energy usage, the review of which is to be at least every three years. It explains additional advantages of stable budgets, as providing enhanced access to capital and personnel, and improving the integration of program design with utility programs. It requires that the board consider the impact of efficiency programs on fuel prices and bills, and ensure the efficiency programs make proportional progress toward the state building efficiency goals by promoting all forms of end-user energy efficiency and sustainable building design.

The act requires the public service board to continue its investigations of residential inclining block rate designs, alternative rate designs to encourage efficient use of energy; and appropriate exemptions for special needs or extraordinary situations. The board is required, by 12/31/08, to issue a report and plan for implementation, based upon the results of the investigation. The act allows the board to issue an order that provides reduced rates for low income electric utility consumers, with a low income electric utility consumer being defined as a customer with a household income of 150 percent or less of the current federal poverty level. The board must take into account the potential impact on and cost-shifting to other utility customers when considering approval of such an order.

The act revises the net metering law, raising the existing cap on non-farm net metering systems to 150 kw capacity; allowing qualified micro-combined heat and power systems of 20 kw or less that meet air quality standards; increasing the maximum size of “farm system” from 150 to 250 kw; allowing use of “group net metering systems” subject to various provisions controlling use of farm systems; limiting net metering systems to customers within the service area of the same electric company; allowing multiple buildings of a municipality to qualify; providing that a union or district school facility shall be considered in the same group system as its member municipalities that are located within the same utility service area; and granting the public service board the authority to allow noncontiguous groups, if to do so promotes the general good. It also increases a company’s system cap regarding how much net metered power it must accept, from one percent up to two percent of company’s peak demand in 1996. It repeals the provision that allows an electric company to receive from farm systems any tradable renewable credits for which the farm system is eligible. It repeals provisions allowing up to 10 larger systems and allowing an electric company to contract to receive output from group systems, as well as farm systems, in excess of 250 kw. It requires the board to adopt rules regarding the application of the section 248 anesthetics criteria to an application for a certificate for a single net-metered wind turbine that is less than 150 feet in height.

The act also requires the public service board to create a rule or order governing application, issuance, and revocation of a certificate of public good (CPG) for temporary meteorological stations. These stations are exempt from being reviewed for being in the company’s electric plan. The act allows the board to waive section 248 requirements that are not applicable to meteorological stations, but does not allow it to waive review of construction effects on aesthetics, historic sites, air and water purity, natural environment, and public health and safety. It requires these applications be processed so as to assure that a proposal for decision shall be issued within five months of receipt of a complete application. It requires the removal of temporary towers upon expiration of the certificate of public good.

The act expands the scope of the law relating to the regional greenhouse gas initiative (RGGI) to incorporate policy emphasizing the value of minimizing emissions from the use of fossil fuels for space and processing heat, and the value of building envelope investments. It provides that proceeds from the sale of RGGI credits shall be deposited into the energy efficiency fund established by 30 V.S.A. § 203a. The act amends the definition of “new renewable energy,” as it appears in the sustainably priced energy enterprise development (SPEED) program, which refers to renewable energy source coming into service after 12/31/04. The amendment includes within the definition additional energy derived from changes in operation (for example, at the MacNeil plant) to the extent that those changes increase kwh output beyond the average output for the 10 years ending as of 12/31/04.

It requires each electric company, by July 1, 2009, to implement a renewable energy pricing program for its customers, or offer customers the option of making a voluntary contribution to the Vermont clean energy development fund. It repeals the provision that a renewable energy pricing option would only be provided to customer classes determined by the board. It provides that when a company selects the option of paying into a fund in order to avoid purchasing credits to meet portfolio standards, payment shall be made into the Vermont clean energy development fund.

It requires the public service board to create a standard contract price or a set of maximum and minimum provisions, or both, for qualifying SPEED resources over 1 MW of capacity. In setting a standard contract price, the board shall consider the goal of developing qualified SPEED resources, least cost analysis, and the impact on electric rates. It adjusts the statutory mechanism for determining whether portfolio standards will be imposed. In particular, it provides that if the board determines, by 1/1/13, that resources that are brought into service between 1/1/05 and 1/1/12 or that are the subject of a certificate of public good issued during that time, when combined, exceed the growth in statewide retail electric sales during that period of time, and that SPEED resources then produce at least five percent of 2005 retail sales, or if SPEED resources provides 10 percent or more of 2005 retail sales, then the portfolio standards shall not be in force. The act makes it a state goal to assure that 20 percent of total statewide electric retail sales before 7/1/17 shall be generated by SPEED resources. The board is to report to legislative committees on progress in meeting the goal by 12/31/11 and again by 12/31/13, in the latter case, if necessary, with appropriate recommendations to make attaining the goal more likely

The act makes it clear that when local government provides tax breaks for alternate energy sources, renewable net metering systems are eligible. It imposes a wind-powered electric generating facilities tax as an alternative education property tax on buildings and fixtures used in the generation of electric energy from wind. All of the revenues raised from the tax will be deposited in the education fund. Municipal property taxes on wind-powered generating facilities would not be affected. The rate of the tax shall be $0.003 per kwh produced, as determined by the public service board, but may not be less than if the facility were operating at 15 percent of the facility’s average capacity factor.

It also allows the pass through to individuals and corporations of 100 percent of the Vermont property portion of the business solar energy investment component of the federal investment tax credit. This pass-through would be effective for taxable year 2008 and after. The act transfers $20,000 annually from the clean energy development fund to the general fund to support solar energy income tax credits.

The act provides that the home weatherization assistance trust fund may be used only to support programs authorized under the weatherization assistance program chapter. It increases to $6,000 the average that may be spent per unit under the weatherization program. It requires the state program be developed to include: (A) facilitating the use of a common energy-audit tool that will work on all Vermont housing; (B) requiring that in the case of multifamily dwellings, at least 25 percent of the tenants be eligible for weatherization or that at least 50 percent of the units are affordable, as defined in that section; (C) establishing eligibility levels at 60 percent of the area median income or 60 percent of the state median income, whichever is less; (D) eliminating the lien requirement in certain instances; (E) allowing greater program flexibility to increase energy savings or alleviate health and safety problems; and (F) increasing the number of units weatherized or the scope of service to reflect increased revenues in the trust fund. The act extends to June 30, 2011 the sunset date on the gross receipts tax on heating fuels, and requires a joint energy committee report by January 15, 2011, regarding continuing or increasing the tax, as determined by the success in meeting the building efficiency goals of the state.

The act requires specified state agencies to report jointly by 1/15/09 with recommendations for increasing the use of state government use of biodiesel blends in state office buildings, state garages, and in the state transportation fleet.. The department of buildings and general services is to report on: current use of blends; recommendations for increasing use of blends in office buildings to five percent by the end of 2008 and 10 percent by 2012; obstacles; and a work plan to increase use. The department of public service is to report on current production, storage, and distribution capacity and recommendations for increasing all three; current performance of biodiesel blends as heating fuel and for vehicles; a summary of quality assurance and control measures for blending; and a work plan to increase use. The agency of transportation is to report on current use of biofuels in the state fleet and in state garages; how to increase use to five percent by the end of 2008 and 10 percent by 2012; obstacles; and a work plan to increase use. The state entities involved are to conduct at least one public hearing to review the draft report and solicit comments.

The act provides that by 1/15/09, the department of public service shall report on the benefits and disadvantages of creating a public power authority. It also provides that by 12/1/08, the department of taxes shall present to the house and senate committees on natural resources a report on how net metered systems are valued and taxed at the town and municipal levels and how customer-sited renewable energy generation should be valued for property tax purposes.

The act requires the natural resources board to evaluate the need to amend by rule the conservation flow standards for the water quality review of proposed hydroelectric facilities. In conducting this evaluation, the board is to convene a public stakeholder process, by 6/1/2008, to review existing and proposed standards and to issue recommendations, and is to consider specific alternative flow standards specified in the act. After the recommendations are issued, the board may adopt rules amending the conservation flow standards used by the agency of natural resources to conduct water quality review of proposed hydroelectric facilities. Finally, the act requires the agency of natural resources to report on the cost of producing a fish study methodology for the state of Vermont, other than the U.S. Geological Survey’s instream flow incremental methodology protocols.

Effective Date: July 1, 2008.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont