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BILL AS INTRODUCED 2007-2008

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S.94

Introduced by Senator Lyons of Chittenden District, Senator Cummings of Washington District and Senator Shumlin of Windham District

Referred to Committee on

Date:

Subject:  Energy planning; greenhouse gas reduction; thermal efficiency utility

Statement of purpose:  This bill proposes to expand the authority and the independence of the efficiency utility, and to authorize it to attain efficiencies from sources that are not related to the use of electricity.  It proposes to allow the public service board to set the level of a fuel efficiency nega‑rate upon heating oil and other heating fuels to finance the program.  It requires a report on mortgages to support weatherization, a report with regard to how to create incentives for wise use of weatherization in residential uses, and a report on how best to coordinate the efforts of the efficiency utility with the low income weatherization program and the LIHEAP program.

AN ACT RELATING TO GREENHOUSE GAS REDUCTION, THE EFFICIENCY UTILITY, ASSESSING AN EFFICIENCY NEGA‑RATE CHARGE ON HEATING FUELS, AND OTHER MATTERS RELATING TO BUILDING EFFICIENCY

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


Sec. 1.  30 V.S.A. § 201(c) is added to read:

(c)  As used in this chapter, “nega‑rate” means a prorated efficiency charge to be assessed by the board under section 203a of this title, at a rate established under that section, in order to finance a reduction in the generation of greenhouse gases from the use of fossil fuels for purposes of heating buildings, by assuring wider availability of weatherization and efficiency programs, and by encouraging the wise use of renewable energy resources.

Sec. 2.  30 V.S.A. § 202(d) is amended to read:

(d)  In establishing plans, the director shall:

(1)  Consult with:

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(J)  an entity entities designated to meet the public’s need for energy efficiency services under subdivision 218c(a)(2) of this title and under section 203a of this title;

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(3)  Work in conjunction with the energy efficiency entities designated under subsection 209(d) of this title and under section 203a of this title to develop 20‑year projections for efficiency programs administered by those entities, and to incorporate those projections into the state electrical energy plan.


Sec. 3.  30 V.S.A. § 203 is amended to read:

§ 203.  JURISDICTION OF CERTAIN PUBLIC UTILITIES

The public service board and the department of public service shall have jurisdiction over the following described companies within the state, their directors, receivers, trustees, lessees, or other persons or companies owning or operating such companies and of all plants, lines, exchanges, and equipment of such companies used in or about the business carried on by them in this state as covered and included herein.  Such jurisdiction shall be exercised by the board and the department so far as may be necessary to enable them to perform the duties and exercise the powers conferred upon them by law.  The board and the department may, when they deem the public good requires, examine the plants, equipment, lines, exchanges, stations, and property of the companies subject to their jurisdiction under this chapter.

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(7)  That part of the business of a company which consists of the sale directly to the public of any combination of propane, coal, heating oil, or kerosene not used to propel a motor vehicle by a company whose sales of these fuels total more than $10,000.00 annually, but only for purposes of assessing and collecting the efficiency nega‑rate charge authorized by section 203a of this title.


Sec. 4.  30 V.S.A. § 203a is added to read:

§ 203a.  HEATING FUEL EFFICIENCY NEGA‑RATE CHARGE TO FUND
  THERMAL EFFICIENCY UTILITY

(a)  Purpose.  The general assembly finds and determines that:

(1)  as specified in section 202a of this title, it is state energy policy to assure the efficient use of energy resources and cost‑effective demand management;

(2)  as is specified in section 202b of this title, a comprehensive state energy plan is to be developed as a way of implementing state energy policy;

(3)  it is appropriate to build upon the work already done by the efficiency utility established under the authority of section 209 of this title in reducing energy costs for Vermonters and to integrate that work into a broader program that will serve the needs of the people of the state in an even better manner;

(4)  under the status quo, since efficiency charges may be assessed by the board only on regulated electricity and natural gas providers, those entities are faced with a competitive disadvantage when compared with retail dealers of heating oil, kerosene, propane, and coal, upon whom no efficiency charge may be assessed;

(5)  with the growing certainty that global climate change is caused in significant part by human activities that release greenhouse gases into the atmosphere, it is particularly important to reduce the extent to which these emissions result from the inefficient use of carbon‑containing fuels, regardless of the nature of the source;

(6)  it is desirable for the state to lower fuel price risk and supply vulnerability while at the same time strengthening the Vermont economy by establishing a system that will be able to make continuous progress by promoting all forms of energy end‑use efficiency, comprehensive sustainable building design, and integrated renewable energy installations. 

(b)  Heating fuel efficiency nega‑rate charge.  The public service board shall have jurisdiction to establish the level of a heating fuel efficiency nega‑rate charge, which may be a volumetric charge, which shall be assessed upon all retail sellers receiving more than $10,000.00 annually for the sale of one or more of the following:

(1)  heating oil or kerosene not used to propel a motor vehicle;

(2)  propane; or

(3)  coal.

(c)  Fund.  Proceeds of the heating fuel efficiency nega‑rate charge assessed under this section shall be paid to a fund administrator appointed by the board under subsection 209(d) of this title.  Balances in the fund that are derived from this funding source shall be fuel consumers’ funds.  Balances in the fund shall be used to promote cost-effective efficiency and reductions in greenhouse gas emissions from sectors other than, or in addition to, the electricity use sector, and shall be carried forward and remain in the fund at the end of each fiscal year.  These monies shall not be available to meet the general obligations of the state.  Interest earned shall remain in the fund.  The fund may be managed and implementation of the program may be overseen by the same entity that manages the fund established under subsection 209(d) of this title and oversees implementation of the program established under that subsection, or by a different entity designated by the board under this section.  The fund shall be managed subject to the relevant provisions of subsection 209(e) of this title.

(d)  Amount of efficiency nega‑rate charge.  The charge established by the board pursuant to this section shall be in an amount determined by the board by rule or order to meet the public’s needs for energy services, after safety concerns are addressed.  In this process, due consideration shall be given to the magnitude of the efficiency charge burden imposed or authorized to be imposed on regulated providers of electricity and natural gas, the resources dedicated to efficiency purposes already provided through electric rates, the estimated available cost‑effective investment potential for efficiency investments through a strategy combining expenditures on renewable energy supply together with comprehensive energy efficiency programs which are designed to meet the public’s need for energy services through efficiency, conservation, or load management in all customer classes and areas of opportunity and which are designed to acquire the full amount of cost‑effective savings from those programs.  As circumstances and programs evolve, the amount of the nega‑rate charge shall be reviewed, based on an assessment of 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 nega‑rate charge and its allocation, the board shall determine an appropriate balance among the following objectives:  reducing the size of future heating fuel purchases; reducing the generation of greenhouse gases; minimizing the expense of purchasing heating fuel; 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 targeting efficiency and conservation efforts to locations, markets, or customers where they may provide the greatest value.

(e)  Limited jurisdiction.  The jurisdiction of the board and department created under this section with respect to retail sellers of heating fuel shall be limited to the establishment of the efficiency nega‑rate charge.  No jurisdiction is created under this section to require these entities to conduct least cost integrated planning under section 218c of this title.

(f)  Consumer notice.  The board shall provide retail providers of heating fuel with notice for display to consumers regarding how to obtain information about energy efficiency programs approved under this section.  This notice shall include, at a minimum, a toll free telephone number at which this information may be obtained. 

Sec. 5.  30 V.S.A. § 209(d)(2) is amended to read:

(2)  In place of utility‑specific programs developed pursuant to section 218c of this title, the board may shall, after notice and opportunity for hearing, provide for the development, implementation, and monitoring of gas and electric energy efficiency and conservation programs and measures including programs and measures delivered in multiple service territories, by appointing one or more qualified entities appointed by the board for these purposes as an energy efficiency utility.  This appointment of an energy efficiency utility shall be made on a schedule allowing at least one such energy efficiency utility adequate time to prepare for the delivery of relevant services no later than January 1, 2008.  The board may include 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.  The board may specify that the implementation of these programs and measures appointment of an energy efficiency utility to deliver services within an electric utility’s service territory satisfies a that electric utility’s corresponding obligations, in whole or in part, under section 218c of this title and under any prior orders of the board.

Sec. 6.  30 V.S.A. § 209(e) and (f) are amended to read:

(e)  The board shall:

(1)  Ensure that all retail consumers, regardless of retail electricity or, gas, or heating fuel provider, will have an opportunity to participate in and benefit from a comprehensive set of cost‑effective energy efficiency programs and initiatives designed to overcome barriers to participation.

(2)  Require that continued or improved efficiencies be made in the production, delivery, and use of energy efficiency services, including the use of compensation mechanisms for any energy efficiency utility that are based upon verified savings in energy usage and demand, and other performance targets specified by the board.  The linkage between compensation and verified savings in energy usage and demand (and other performance targets) shall be reviewed and adjusted not less than triennially by the board.

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(7)  Provide a reasonably stable multiyear budget and planning cycle and promote program improvement, program stability, enhanced access to capital and personnel, improved integration of program designs with the budgets of regulated companies providing energy services, and maturation of programs and delivery resources.  An energy efficiency utility shall have the same unrestricted term of appointment as is most common for electric and gas utilities in the state.  The board may terminate an energy efficiency utility’s appointment, but only for good cause, such as fraud, material adverse effects upon the general good of the state, or sustained failure to meet the performance targets established in subdivision (2) of this subsection, and only if so shown after notice and an opportunity for hearing. 

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(10)  Provide for the independent evaluation of programs delivered under subsection (d) of this section and those delivered under section 203a of this title.

(11)  Require that any entity approved appointed by the board under subsection (d) of this section shall:

(A)  deliver board‑approved programs in an effective, efficient, timely, and competent manner and meet standards that are consistent with those in section 218c of this title, the board’s orders in public service board docket 5270, and any relevant board orders in subsequent energy efficiency proceedings; and

(B)  independently report and recommend to the board, the legislature, and the public measures and policies intended to achieve the purposes of section 202a of this title, and, more generally, the purposes of this title.

(12)  Require verification, on or before January 1, 2003, and every three years thereafter, by an independent auditor of the reported energy and capacity savings and cost‑effectiveness of programs delivered by any entity appointed by the board to deliver energy efficiency programs under subdivision (d)(2) of this section and those programs delivered by any entity appointed by the board to deliver energy efficiency programs under section 203a of this title.

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(14)  Consider the impact on retail electric rates of programs delivered under subsection (d) of this section and the impact on fuel prices of programs delivered under section 203a of this title.

(15)  Establish a building efficiency program, which may be run by the efficiency utility, and which shall be designed to make continuous progress by promoting all forms of energy end‑use efficiency, comprehensive sustainable building design, and integrated renewable energy installations.  The program may utilize performance‑based contracting, pursuant to which payment is pegged to performance achieved.  The program administrator may secure and administer revenue from other sources.

(16)  Require that any entity appointed by the board under section 203a of this title shall:

(A)  deliver board‑approved programs in an effective, efficient, timely, and competent manner and meet standards that are consistent with any relevant board orders in subsequent energy efficiency proceedings;

(B)  independently report and recommend to the board, the legislature, and the public measures and policies intended to achieve the purposes of section 202a of this title, and, more generally, the purposes of this title;

(C)  annually report to the general assembly on expenditures under the program and on projected budget needs for the upcoming five years.

(f)  Appointment under this section shall not render such an entity subject to the general provisions of chapters 3 and 5 of this title, except to the degree provided for by the board in such an appointment or specific future order.  Appointment of, oversight of, and revenue determinations for such an energy efficiency utility shall fall within the regulatory powers and jurisdiction of the board and, as is the case regarding the regulation of the revenues, terms and conditions of service and compensation of gas and electric utilities shall not be considered a contractual activity of the state.

(g)  The public service board may prescribe, by rule or order, standards for the labeling of electricity delivered or intended for delivery to ultimate consumers as to price, terms, sources and objective environmental impacts, along with such procedures as it deems necessary for verification of information contained in such labels.  The public service board may prescribe, by rule or by order, standards and criteria for the substantiation of such labeling or of any claims regarding the price, terms, sources and environmental impacts of electricity delivered or intended for delivery to ultimate consumers in Vermont, along with enforcement procedures and penalties.  When establishing standards for the labeling of electricity, the board shall weigh the cost, as well as the benefits, of compliance with such standards.  With respect to companies distributing electricity to ultimate consumers, the board may order disclosure and publication, not to occur more than once each year, of any labeling required pursuant to the standards established by this subsection. Standards established under this subsection may include provisions for:

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Sec. 7.  30 V.S.A. § 218c(b) is amended to read:

(b)  Each regulated electric or gas company shall prepare and implement a least cost integrated plan for the provision of energy services to its Vermont customers.  In preparing the efficiency portion of an integrated plan, a regulated company shall consult with any entity appointed by the board to deliver energy efficiency programs under subdivision 209(d)(2) of this title and with any entity appointed by the board to deliver energy efficiency programs under section 203a of this title.  Proposed plans shall be submitted to the department of public service and the public service board.  The board, after notice and opportunity for hearing, may approve a company’s least cost integrated plan if it determines that the company’s plan complies with the requirements of subdivision (a)(1) of this section.

Sec. 8.  ENERGY EFFICIENCY MORTGAGES

On or before January 15, 2008, the Vermont economic development authority shall report to the house and senate committees on natural resources and energy, the house committee on commerce, and the senate committee on finance regarding the feasibility of establishing a program to support energy efficiency residential mortgages of up to 15 percent of the appraised value of a dwelling for energy saving improvements, weatherization, or energy efficiency for which the monthly mortgage or loan payment does not exceed the likely reduction in utility and heating costs for the dwelling.

Sec. 9.  REPORTS ON RESIDENTIAL INCENTIVES AND ON PROGRAM
 INTEGRATION

(a)  Any efficiency utility shall work with representatives of the buildings trades, architects, nonprofit housing providers, and other interested persons to develop recommendations to the general assembly with regard to how best to create incentives to encourage the economic development likely to accompany the voluntary use of residential and commercial building practices and material that are best suited to limit the amount of energy consumed and greenhouse gases generated, without creating hardships among the users of the building.

(b)  Any efficiency utility appointed by the public service board under 30 V.S.A. § 209 shall work collaboratively with the office of economic opportunity, and with the managers of the Low Income Home Energy Assistance Program (LIHEAP) to determine the most effective use of available funds for the purposes of reducing the costs of heating and weatherizing buildings while reducing emissions of greenhouse gases, and shall report its recommendations on:

(1)  whether and how best to integrate the functions of the respective programs;

(2)  how best to reduce the financial impact of home heating and electricity consumption on low income households;

(3)  how best to expand the programs;

(4)  how best to assure that recipients of fuel assistance funding take advantage of all appropriate weatherization programs;

(5)  how best to structure the weatherization program so as to enable the offering of weatherization services that exceed federal limits on the amount that may be spent per living unit.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us