The Vermont Statutes Online

Title 30: Public Service

Chapter 089: Renewable Energy Programs

• Subchapter 001: General Provisions

• § 8001. Renewable energy goals

  (a) The General Assembly finds it in the interest of the people of the State to promote the State energy policy established in section 202a of this title by:

  (1) Balancing the benefits, lifetime costs, and rates of the State’s overall energy portfolio to ensure that to the greatest extent possible the economic benefits of renewable energy in the State flow to the Vermont economy in general, and to the rate-paying citizens of the State in particular.

  (2) Supporting development of renewable energy that uses natural resources efficiently and related planned energy industries in Vermont, and the jobs and economic benefits associated with such development, while retaining and supporting existing renewable energy infrastructure.

  (3) Providing an incentive for the State’s retail electricity providers to enter into affordable, long-term, stably priced renewable energy contracts that mitigate market price fluctuation for Vermonters.

  (4) Developing viable markets for renewable energy and energy efficiency projects.

  (5) Protecting and promoting air and water quality in the State and region through the displacement of those fuels, including fossil fuels, which are known to emit or discharge pollutants.

  (6) Contributing to reductions in global climate change and anticipating the impacts on the State’s economy that might be caused by federal regulation designed to attain those reductions.

  (7) Providing support and incentives to locate renewable energy plants of small and moderate size in a manner that is distributed across the State’s electric grid, including locating such plants in areas that will provide benefit to the operation and management of that grid through such means as reducing line losses and addressing transmission and distribution constraints.

  (8) Promoting the inclusion, in Vermont’s electric supply portfolio, of renewable energy plants that are diverse in plant capacity and type of renewable energy technology.

  (b) The Commission shall adopt the rules that are necessary to allow the Commission and the Department to implement and supervise programs pursuant to subchapter 1 of this chapter. (Added 2003, No. 69, § 1, eff. June 17, 2003; amended 2005, No. 61, § 1; 2011, No. 47, § 6 (eff. May 25, 2011) and § 18; 2011, No. 170 (Adj. Sess.), § 1, eff. May 18, 2012; 2015, No. 56, § 21.)

• § 8002. Definitions

  As used in this chapter:

  (1) “Commission” means the Public Utility Commission under section 3 of this title.

  (2) “Commissioned” or “commissioning” means the first time a plant is put into operation following initial construction or modernization if the costs of modernization are at least 50 percent of the costs that would be required to build a new plant including all buildings and structures technically required for the new plant’s operation. However, these terms shall not include activities necessary to establish operational readiness of a plant.

  (3) “CPI” means the Consumer Price Index for all urban consumers, designated as “CPI-U,” in the northeast region, as published by the U.S. Department of Labor, Bureau of Labor Statistics.

  (4) “Customer” means a retail electric consumer.

  (5) “Department” means the Department of Public Service under section 1 of this title, unless the context clearly indicates otherwise.

  (6) “Energy conversion efficiency” means the effective use of energy and heat from a combustion process.

  (7) “Environmental attributes” means the characteristics of a plant that enable the energy it produces to qualify as renewable energy and include any and all benefits of the plant to the environment such as avoided emissions or other impacts to air, water, or soil that may occur through the plant’s displacement of a nonrenewable energy source.

  (8) “Existing renewable energy” means renewable energy produced by a plant that came into service prior to or on June 30, 2015.

  (9) “Greenhouse gas reduction credits” shall be as defined in section 8006a of this title.

  (10) “Group net metering system” means a net metering system serving more than one customer, or a single customer with multiple electric meters, located within the service area of the same retail electricity provider. Various buildings owned by municipalities, including water and wastewater districts, fire districts, villages, school districts, and towns, may constitute a group net metering system. A union or district school facility may be considered in the same group net metering system with buildings of its member schools that are located within the service area of the same retail electricity provider.

  (11) “kW” means kilowatt or kilowatts (AC).

  (12) “kWh” means kW hour or hours.

  (13) “MW” means megawatt or megawatts (AC).

  (14) “MWH” means MW hour or hours.

  (15) “Net metering” means measuring the difference between the electricity supplied to a customer and the electricity fed back by the customer’s net metering system during the customer’s billing period:

  (A) using a single, non-demand meter or such other meter that would otherwise be applicable to the customer’s usage but for the use of net metering; or

  (B) if the system serves more than one customer, using multiple meters. The calculation shall be made by converting all meters to a non-demand, non-time-of-day meter, and equalizing them to the tariffed kWh rate.

  (16) “Net metering system” means a plant for generation of electricity that:

  (A) is of no more than 500 kW capacity;

  (B) operates in parallel with facilities of the electric distribution system;

  (C) is intended primarily to offset the customer’s own electricity requirements and does not primarily supply electricity to electric vehicle supply equipment, as defined in section 201 of this title, for the resale of electricity to the public by the kWh or for other retail sales to the public, including those based in whole or in part on a flat fee per charging session or a time-based fee for occupying a parking space while using electric vehicle supply equipment; and

  (D)(i) employs a renewable energy source; or

  (ii) is a qualified micro-combined heat and power system of 20 kW or fewer that meets the definition of combined heat and power in subsection 8015(b) of this title and uses any fuel source that meets air quality standards.

  (17) “New renewable energy” means renewable energy produced by a specific and identifiable plant coming into service after June 30, 2015.

  (A) Energy from within a system of generating plants that includes renewable energy shall not constitute new renewable energy, regardless of whether the system includes specific plants that came or come into service after June 30, 2015.

  (B) “New renewable energy” also may include the additional energy from an existing renewable energy plant retrofitted with advanced technologies or otherwise operated, modified, or expanded to increase the kWh output of the plant in excess of an historical baseline established by calculating the average output of that plant for the 10-year period that ended June 30, 2015. If the production of new renewable energy through changes in operations, modification, or expansion involves combustion of the resource, the system also must result in an incrementally higher level of energy conversion efficiency or significantly reduced emissions.

  (18) “Plant” means an independent technical facility that generates electricity from renewable energy. A group of facilities, such as wind turbines, shall be considered one plant if the group is part of the same project and uses common equipment and infrastructure such as roads, control facilities, and connections to the electric grid. Common ownership, contiguity in time of construction, and proximity of facilities to each other shall be relevant to determining whether a group of facilities is part of the same project.

  (19) “Plant capacity” means the rated electrical nameplate for a plant, except that, in the case of a solar energy plant, the term shall mean the aggregate AC nameplate capacity of all inverters used to convert the plant’s output to AC power.

  (20) “Plant owner” means a person who has the right to sell electricity generated by a plant.

  (21) “Renewable energy” means energy produced using a technology that relies on a resource that is being consumed at a harvest rate at or below its natural regeneration rate.

  (A) For purposes of this subdivision (21), methane gas and other flammable gases produced by the decay of sewage treatment plant wastes or landfill wastes and anaerobic digestion of agricultural products, byproducts, or wastes, or of food wastes shall be considered renewable energy resources, but no other form of solid waste, other than silvicultural waste, shall be considered renewable.

  (B) For purposes of this subdivision (21), no form of nuclear fuel shall be considered renewable.

  (C) The only portion of electricity produced by a system of generating resources that shall be considered renewable is that portion generated a technology that qualifies as renewable under this subdivision (21).

  (D) The Commission by rule may add technologies or technology categories to the definition of “renewable energy,” provided that technologies using the following fuels shall not be considered renewable energy supplies: coal, oil, propane, and natural gas.

  (E) In this chapter, renewable energy refers to either “existing renewable energy” or “new renewable energy.”

  (22)(A) “Renewable pricing” shall mean an optional service provided or contracted for by an electric company:

  (i) under which the company’s customers may voluntarily either:

  (I) purchase all or part of their electric energy from renewable sources as defined in this chapter; or

  (II) cause the purchase and retirement of tradeable renewable energy credits on the participating customer’s behalf; and

  (ii) which increases the company’s reliance on renewable sources of energy beyond those the electric company would otherwise be required to provide under section 218c of this title.

  (B) Renewable pricing programs may include:

  (i) contribution-based programs in which participating customers can determine the amount of a contribution, monthly or otherwise, that will be deposited in a Commission-approved fund for new renewable energy project development;

  (ii) energy-based programs in which customers may choose all or a discrete portion of their electric energy use to be supplied from renewable resources;

  (iii) facility-based programs in which customers may subscribe to a share of the capacity or energy from specific new renewable energy resources.

  (23) “Retail electricity provider” or “provider” means a company engaged in the distribution or sale of electricity directly to the public.

  (24) “Standard Offer Facilitator” means an entity appointed by the Commission pursuant to subsection 8005a(a) of this title.

  (25) [Repealed.]

  (26) “Tradeable renewable energy credits” means all of the environmental attributes associated with a single unit of energy generated by a renewable energy source where:

  (A) those attributes are transferred or recorded separately from that unit of energy;

  (B) the party claiming ownership of the tradeable renewable energy credits has acquired the exclusive legal ownership of all, and not less than all, the environmental attributes associated with that unit of energy; and

  (C) exclusive legal ownership can be verified through an auditable contract path or pursuant to the system established or authorized by the Commission or any program for tracking and verification of the ownership of environmental attributes of energy legally recognized in any state and approved by the Commission.

  (27) “Vermont composite electric utility system” means the combined generation, transmission, and distribution resources along with the combined retail load requirements of the Vermont retail electricity providers.

  (28) “Energy transformation project” means 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; air source or geothermal heat pumps; high efficiency heating systems; increased use of biofuels; biomass heating systems; support for transportation demand management strategies; support for electric vehicles or related infrastructure; and infrastructure for the storage of renewable energy on the electric grid.

  (29) “RES” means the Renewable Energy Standard established under sections 8004 and 8005 of this title.

  (30) “Energy storage facility” has the same meaning as in section 201 of this title. (Added 2003, No. 69, § 1, eff. June 17, 2003; amended 2005, No. 61, § 2; 2007, No. 92 (Adj. Sess.), § 19; 2009, No. 45, § 2, eff. May 27, 2009; 2009, No. 159 (Adj. Sess.), § 13, eff. July 1, 2012; 2011, No. 47, § 7, eff. May 25, 2011 and § 18; 2011, No. 125 (Adj. Sess.), § 8; 2011, No. 170 (Adj. Sess.), § 2, eff. May 18, 2012 and § 10; 2013, No. 89, § 14; 2013, No. 99 (Adj. Sess.), § 3, eff. Jan. 1, 2017; 2015, No. 56, § 25; 2017, No. 53, § 11; 2019, No. 59, § 33, eff. June 14, 2019; 2019, No. 81, § 4; 2021, No. 54, § 10.)

• § 8003. Renewable energy pricing

  (a) An electric utility, municipal department formed under local charter or chapter 79 of this title, or electric cooperative formed under chapter 81 of this title may implement a renewable energy pricing program under this section for its customers, or offer customers the option of making a voluntary contribution to the Vermont Clean Energy Development Fund established under section 8015 of this title. Such renewable energy pricing programs may include tariffs, standard special contracts, or other arrangements whose purpose is to increase the company’s reliance on, or the customer’s support of, renewable sources of energy or the type and quantity of renewable energy resources available.

  (b) A standard special contract for renewable pricing that has been approved as to form and substance by the Commission under this section shall not require further approval by the Commission under section 229 of this title as to individual customers who choose to execute that contract.

  (c) Renewable pricing programs may be priced in the form of a premium relative to the tariff that would otherwise apply; provided the premium shall be cost-based, shall reasonably reflect the difference between acquiring the renewable energy and the utility’s alternative cost of power, including administrative costs, and shall be adjusted via such periodic adjustment mechanisms, including adjustment clauses, as the Commission shall approve as part of a renewable pricing program. Any renewable pricing program shall require that any costs of power in excess of the company’s alternative cost of power shall be borne solely by those customers who elect to participate in the renewable pricing program.

  (d) Tradeable renewable energy credits (with or without other features), tradeable emissions credits, emission offsets, or other market instruments created or obtained by energy resources acquired pursuant to or as part of a renewable pricing program approved under this section shall be permanently retired by or on behalf of the program’s subscribers, and shall not be sold or otherwise disposed of. However, if a program is not fully subscribed, any such instruments created or obtained by the unsubscribed portion of the program may be sold or disposed of at no less than market value if the net proceeds of such sale or disposal are used to reduce the cost paid under the renewable pricing program.

  (e) The Commission shall ensure that disclosures and representations made regarding renewable pricing programs are accurate, are reasonably supported by objective data, disclose the types of technologies used, whether the energy is Vermont-based or not, and clearly distinguish between energy or tradeable energy credits provided from renewable and nonrenewable sources, and existing and new sources.

  (f) [Repealed.]

  (g) The Commission shall consider the following factors in deciding whether and upon what conditions to approve a proposed renewable energy pricing program:

  (1) minimization of marketing and administrative expenses;

  (2) auditing or certification of sources of energy or tradeable renewable energy credits;

  (3) marketing and promotion plans;

  (4) effectiveness of the program in meeting the goals of promoting renewable energy generation and public understanding of renewable energy sources in Vermont;

  (5) retention by the program of renewable energy production incentives, tax incentives, and other incentives earned or otherwise obtained by energy resources acquired pursuant to or as part of a renewable energy pricing program approved under this section to reduce the cost of any premiums paid under this section; and

  (6) costs imposed on nonparticipating customers arising on account of the implementation of the voluntary renewable energy pricing program. (Added 2003, No. 69, § 1, eff. June 17, 2003; amended 2007, No. 92 (Adj. Sess.), § 20; 2009, No. 45, § 4a, eff. May 27, 2009.)

• § 8004. Sales of electric energy; Renewable Energy Standard (RES)

  (a) Establishment; requirements. The RES is established. Under this program, a retail electricity provider shall not sell or otherwise provide or offer to sell or provide electricity in the State of Vermont without ownership of sufficient energy produced by renewable energy plants or sufficient tradeable renewable energy credits from plants whose energy is capable of delivery in New England that reflect the required amounts of renewable energy set forth in section 8005 of this title or without support of energy transformation projects in accordance with that section. A retail electricity provider may meet the required amounts of renewable energy through eligible tradeable renewable energy credits that it owns and retires, eligible renewable energy resources with environmental attributes still attached, or a combination of those credits and resources.

  (b) Rules. The Commission shall adopt the rules that are necessary to allow the Commission and the Department to implement and supervise further the implementation and maintenance of the RES.

  (c) RECS; banking. The Commission shall allow a provider that has met the required amount of renewable energy in a given year, commencing with 2017, to retain tradeable renewable energy credits created or purchased in excess of that amount for application to the provider’s required amount of renewable energy in one of the following three years.

  (d) Alternative compliance payment. In lieu of purchasing renewable energy or tradeable renewable energy credits or supporting energy transformation projects to satisfy the requirements of this section and section 8005 of this title, a retail electricity provider in this State may pay to the Vermont Clean Energy Development Fund established under section 8015 of this title an alternative compliance payment at the applicable rate set forth in section 8005.

  (e) VPPSA members. In the case of members of the Vermont Public Power Supply Authority, the requirements of this chapter may be met in the aggregate.

  (f) Joint efforts. Retail electricity providers may engage in joint efforts to meet one or more categories within the RES. (Added 2003, No. 69, § 1, eff. June 17, 2003; amended 2005, No. 61, § 3; 2005, No. 208 (Adj. Sess.), § 14; 2007, No. 92 (Adj. Sess.), § 21; 2009, No. 45, § 3, eff. May 27, 2009; 2011, No. 47, §§ 18, 20m(a); 2015, No. 56, § 2.)

• § 8005. RES categories

  (a) Categories. This section specifies three categories of required resources to meet the requirements of the RES established in section 8004 of this title: total renewable energy, distributed renewable generation, and energy transformation.

  (1) Total renewable energy.

  (A) Purpose; establishment. To encourage the economic and environmental benefits of renewable energy, this subdivision establishes, for the RES, minimum total amounts of renewable energy within the supply portfolio of each retail electricity provider. To satisfy this requirement, a provider may use renewable energy with environmental attributes attached or any class of tradeable renewable energy credits generated by any renewable energy plant whose energy is capable of delivery in New England.

  (B) Required amounts. The amounts of total renewable energy required by this subsection shall be 55 percent of each retail electricity provider’s annual retail electric sales during the year beginning on January 1, 2017, increasing by an additional four percent each third January 1 thereafter, until reaching 75 percent on and after January 1, 2032.

  (C) Relationship to other categories. Distributed renewable generation used to meet the requirements of subdivision (2) of this subsection (a) shall also count toward the requirements of this subdivision. However, an energy transformation project under subdivision (3) of this subsection shall not count toward the requirements of this subdivision.

  (D) Municipal providers; petition. On petition by a provider that is a municipal electric utility serving not more than 6,000 customers, the Commission may reduce the provider’s required amount under this subdivision (1) for a period of up to three years. The Commission may approve one such period only for a municipal provider. The Commission may reduce this required amount if it finds that:

  (i) the terms or conditions of an environmental permit or certification necessitate a reduction in the electrical energy generated by an in-state hydroelectric facility that the provider owns and that this reduction will require the provider to purchase other renewable energy with environmental attributes attached or tradeable renewable energy credits in order to meet this required amount; and

  (ii) this purchase will:

  (I) cause the provider to increase significantly its retail rates; or

  (II) materially impair the provider’s ability to meet the public’s need for energy services after safety concerns are addressed, in the manner set forth in subdivision 218c(a)(1) (least-cost integrated planning) of this title.

  (2) Distributed renewable generation.

  (A) Purpose; establishment. This subdivision establishes a distributed renewable generation category for the RES. This category encourages the use of distributed generation to support the reliability of the State’s electric system; reduce line losses; contribute to avoiding or deferring improvements to that system necessitated by transmission or distribution constraints; and diversify the size and type of resources connected to that system. This category requires the use of renewable energy for these purposes to reduce environmental and health impacts from air emissions that would result from using other forms of generation.

  (B) Definition. As used in this section, “distributed renewable generation” means one of the following:

  (i) a renewable energy plant that is new renewable energy; has a plant capacity of five MW or less; and

  (I) is directly connected to the subtransmission or distribution system of a Vermont retail electricity provider; or

  (II) is directly connected to the transmission system of an electric company required to submit a Transmission System Plan under subsection 218c(d) of this title, if the plant is part of a plan approved by the Commission to avoid or defer a transmission system improvement needed to address a transmission system reliability deficiency identified and analyzed in that Plan; or

  (ii) a net metering system approved under the former section 219a or under section 8010 of this title if the system is new renewable energy and the interconnecting retail electricity provider owns and retires the system’s environmental attributes.

  (C) Required amounts. The required amounts of distributed renewable generation shall be one percent of each retail electricity provider’s annual retail electric sales during the year beginning January 1, 2017, increasing by an additional three-fifths of a percent each subsequent January 1 until reaching 10 percent on and after January 1, 2032.

  (D) Distributed generation greater than five MW. On petition of a retail electricity provider, the Commission may for a given year allow the provider to employ energy with environmental attributes attached or tradeable renewable energy credits from a renewable energy plant with a plant capacity greater than five MW to satisfy the distributed renewable generation requirement if the plant would qualify as distributed renewable generation but for its plant capacity and the provider demonstrates that it is unable during that year to meet the requirement solely with qualifying renewable energy plants of five MW or less. To demonstrate this inability, the provider shall issue one or more requests for proposals, and show that it is unable to obtain sufficient ownership of environmental attributes to meet its required amount under this subdivision (2) from:

  (i) the construction and interconnection to its system of distributed renewable generation that is consistent with its approved least-cost integrated resource plan under section 218c of this title at a cost less than or equal to the sum of the applicable alternative compliance payment rate and the applicable rates published by the Department under the Commission’s rules implementing subdivision 209(a)(8) of this title; and

  (ii) purchase of tradeable renewable energy credits for distributed renewable generation at a cost that is less than the applicable alternative compliance rate.

  (3) Energy transformation.

  (A) Purpose; establishment. This subdivision establishes an energy transformation category for the RES. This category encourages Vermont retail electricity providers to support additional distributed renewable generation or to support other projects to reduce fossil fuel consumed by their customers and the emission of greenhouse gases attributable to that consumption. A retail electricity provider may satisfy the energy transformation requirement through distributed renewable generation in addition to the generation used to satisfy subdivision (2) of this subsection (a) or energy transformation projects or a combination of such generation and projects.

  (B) Required amounts. For the energy transformation category, the required amounts shall be two percent of each retail electricity provider’s annual retail electric sales during the year beginning January 1, 2017, increasing by an additional two-thirds of a percent each subsequent January 1 until reaching 12 percent on and after January 1, 2032. However, in the case of a provider that is a municipal electric utility serving not more than 6,000 customers, the required amount shall be two percent of the provider’s annual retail sales beginning on January 1, 2019, increasing by an additional two-thirds of a percent each subsequent January 1 until reaching 10 and two-thirds percent on and after January 1, 2032. Prior to January 1, 2019, such a municipal electric utility voluntarily may engage in one or more energy transformation projects in accordance with this subdivision (3).

  (C) Eligibility criteria. For an energy transformation project to be eligible under this subdivision (a)(3), each of the following shall apply:

  (i) Implementation of the project shall have commenced on or after January 1, 2015.

  (ii) Over its life, the project shall result in a net reduction in fossil fuel consumed by the provider’s customers and in the emission of greenhouse gases attributable to that consumption, whether or not the fuel is supplied by the provider.

  (iii) The project shall meet the need for its goods or services at the lowest present value life cycle cost, including environmental and economic costs. Evaluation of whether this subdivision (iii) is met shall include analysis of alternatives that do not increase electricity consumption.

  (iv) The project shall cost the utility less per MWH than the applicable alternative compliance payment rate.

  (D) Conversion. For the purpose of determining eligibility and the application of the energy transformation project to a provider’s annual requirement, the provider shall convert the net reduction in fossil fuel consumption resulting from the energy transformation project to a MWH equivalent of electric energy, in accordance with rules adopted by the Commission. The conversion shall use the most recent year’s approximate heat rate for electricity net generation from the total fossil fuels category as reported by the U.S. Energy Information Administration in its Monthly Energy Review. If an energy transformation project is funded by more than one regulated entity, the Commission shall prorate the reduction in fossil fuel consumption among the regulated entities. In this subdivision (D), “regulated entity” includes each provider and each efficiency entity appointed under subsection 209(d) of this title.

  (E) Other sources.

  (i) A retail electricity provider or a provider’s partner may oversee an energy transformation project under this subdivision (3). However, the provider shall deliver the project’s goods or services in partnership with persons other than the provider unless exclusive delivery through the provider is more cost-effective than delivery by another person or there is no person other than the provider with the expertise or capability to deliver the goods or services.

  (ii) An energy transformation project may provide incremental support to a program authorized under Vermont statute that meets the eligibility criteria of this subdivision (3) but may take credit only for the additional amount of service supported and shall not take credit for that program’s regularly budgeted or approved investments.

  (iii) To meet the requirements of this subdivision (3), one or more retail electricity providers may jointly propose with an energy efficiency entity appointed under subdivision 209(d)(2) of this title an energy transformation project or group of such projects. The proposal shall include standards of measuring performance and methods to allocate savings and reductions in fossil fuel consumption and greenhouse gas emissions among each participating provider and efficiency entity.

  (F) Implementation. To carry out this subdivision (3), the Commission shall adopt rules:

  (i) For the conversion methodology in accordance with subdivision (3)(D) of this subsection (a).

  (ii) To provide a process for prior approval of energy transformation projects by the Commission or its designee. This process shall ensure that each of these projects meets the requirements of this subdivision (3) and need not consist of individual review of each energy transformation project prior to implementation as long as the mechanism ensures those requirements are met. An energy transformation project that commenced prior to initial adoption of rules under this subdivision (F) may seek approval after such adoption.

  (iii) For cost-effectiveness screening of energy transformation projects. This screening shall be consistent with the provisions of this subdivision (3) and, as applicable, the screening tests developed under subsections 209(d) (energy efficiency) and 218c(a) (least-cost integrated planning) of this title.

  (iv) To allow a provider who has met its required amount under this subdivision (3) in a given year to apply excess net reduction in fossil fuel consumption, expressed as a MWH equivalent, from its energy transformation project or projects during that year toward the provider’s required amount in a future year.

  (v) To ensure periodic evaluation of an energy transformation project’s claimed fossil fuel reductions, avoided greenhouse gas emissions, conversion to MWH equivalent, cost-effectiveness and, if applicable, energy savings, and to ensure annual verification and auditing of a provider’s claims regarding project completion and resulting MWH equivalent. Changes to project claims resulting from periodic evaluations shall not reduce retroactively claims made on behalf of a project approved under subdivision (3)(F)(ii) of this subsection (a) or reduce verified claims carried forward under subdivision (3)(F)(iv) of this subsection (a).

  (vi) To ensure that all ratepayers have an equitable opportunity to participate in, and benefit from, energy transformation projects regardless of rate class, income level, or provider service territory.

  (vii) To ensure the coordinated delivery of energy transformation projects with the delivery of similar services, including low-income weatherization programs, entities that fund and support affordable housing, energy efficiency programs delivered under section 209 of this title, and other energy efficiency programs delivered locally or regionally within the State.

  (viii) To ensure that, if an energy transformation project will increase the use of electric energy, the project incorporates best practices for demand management, uses technologies appropriate for Vermont, and encourages the installation of the technologies in buildings that meet minimum energy performance standards.

  (ix) To provide a process under which a provider may withdraw from or terminate, in an orderly manner, an ongoing energy transformation project that no longer meets the eligibility criteria because of one or more factors beyond the control of the project and the provider.

  (G) Petitions. On petition of a retail electricity provider in any given year, the Commission may:

  (i) reduce the provider’s required amount under this subdivision (3) for that year, without penalty or alternative compliance payment, if the Commission finds that compliance with the required amount for that year will:

  (I) cause the provider to increase significantly its retail rates; or

  (II) materially impair the provider’s ability to meet the public’s need for energy services after safety concerns are addressed, in the manner set forth in subdivision 218c(a)(1) (least-cost integrated planning) of this title; or

  (ii) allow a provider who failed to achieve the required amount under this subdivision (3) during the preceding year to avoid paying the alternative compliance payment if the Commission:

  (I) finds that the provider made a good faith effort to achieve the required amount and its failure to achieve that amount resulted from market factors beyond its control; and

  (II) directs that the provider add the difference between the required amount and the provider’s actually achieved amount for that year to its required amount for one or more future years.

  (4) Alternative compliance rates.

  (A) The alternative compliance payment rates for the categories established by this subsection (a) shall be:

  (i) total renewable energy requirement — $0.01 per kWh; and

  (ii) distributed renewable generation and energy transformation requirements — $0.06 per kWh.

  (B) The Commission shall adjust these rates for inflation annually commencing January 1, 2018, using the CPI.

  (b) Reduced amounts; providers; 100 percent renewable.

  (1) The provisions of this subsection shall apply to a retail electricity provider that:

  (A) as of January 1, 2015, was entitled, through contract, ownership of energy produced by its own generation plants, or both, to an amount of renewable energy equal to or more than 100 percent of its anticipated total retail electric sales in 2017, regardless of whether the provider owned the environmental attributes of that renewable energy; and

  (B) annually each July 1 commencing in 2018, owns and has retired tradeable renewable energy credits monitored and traded on the New England Generation Information System or otherwise approved by the Commission equivalent to 100 percent of the provider’s total retail sales of electricity for the previous calendar year.

  (2) A provider meeting the requirements of subdivision (1) of this subsection may:

  (A) satisfy the distributed renewable generation requirement of this section by accepting net metering systems within its service territory pursuant to the provisions of this title that govern net metering; and

  (B) if the Commission has appointed the provider as an energy efficiency entity under subsection 209(d) of this title, propose to the Commission to reduce the energy transformation requirement that would otherwise apply to the provider under this section.

  (i) The provider may make and the Commission may review such a proposal in connection with a periodic submission made by the provider pursuant to its appointment under subsection 209(d) of this title.

  (ii) The Commission may approve a proposal under this subdivision (B) if it finds that:

  (I) the energy transformation requirement that would otherwise apply under this section exceeds the achievable potential for cost-effective energy transformation projects in the provider’s service territory that meet the eligibility criteria for these projects under this section; and

  (II) the reduced energy transformation requirement proposed by the provider is not less than the amount sufficient to ensure the provider’s deployment or support of energy transformation projects that will acquire that achievable potential.

  (iii) The measure of cost-effectiveness under this subdivision (B) shall be the alternative compliance payment rate established in this section for the energy transformation requirement.

  (c) Biomass.

  (1) Distributed renewable generation that employs biomass to produce electricity shall be eligible to count toward a provider’s distributed renewable generation or energy transformation requirement only if the plant produces both electricity and thermal energy from the same biomass fuel and the majority of the energy recovered from the plant is thermal energy.

  (2) Distributed renewable generation and energy transformation projects that employ forest biomass to produce energy shall comply with renewability standards adopted by the Commissioner of Forests, Parks and Recreation under 10 V.S.A. § 2751.

  (d) Hydropower. A hydroelectric renewable energy plant shall be eligible to satisfy the distributed renewable generation or energy transformation requirement only if, in addition to meeting the definition of distributed renewable generation, the plant:

  (1) is and continues to be certified by the Low-impact Hydropower Institute; or

  (2) after January 1, 1987, received a water quality certification pursuant to 33 U.S.C. § 1341 from the Agency of Natural Resources. (Added 2005, No. 61, § 4; amended 2005, No. 208 (Adj. Sess.), § 15; 2007, No. 92 (Adj. Sess.), § 22; 2009, No. 45, § 4, eff. May 27, 2009; 2009, No. 159 (Adj. Sess.), §§ 3, 4, 5, 8, eff. June 4, 2010; 2011, No. 47, § 8 (eff. May 25, 2011) and § 18; 2011, No. 170 (Adj. Sess.), § 3, eff. May 18, 2012; 2013, No. 34, § 19; 2015, No. 56, § 3; 2015, No. 174 (Adj. Sess.), § 14.)

• § 8005a. Standard Offer Program

  (a) Establishment. A Standard Offer Program is established. To achieve the goals of section 8001 of this title, the Commission shall issue standard offers for renewable energy plants that meet the eligibility requirements of this section. The Commission shall implement these standard offers by rule, order, or contract and shall appoint a Standard Offer Facilitator to assist in this implementation. For the purpose of this section, the Commission and the Standard Offer Facilitator constitute instrumentalities of the State.

  (b) Eligibility. To be eligible for a standard offer under this section, a plant must constitute a qualifying small power production facility under 16 U.S.C. § 796(17)(C) and 18 C.F.R. part 292, must not be a net metering system under section 219a of this title, and must be a new standard offer plant. In this section, “new standard offer plant” means a renewable energy plant that is located in Vermont, that has a plant capacity of 2.2 MW or less, and that is commissioned on or after September 30, 2009.

  (c) Cumulative capacity. In accordance with this subsection, the Commission shall issue standard offers to new standard offer plants until a cumulative plant capacity amount of 127.5 MW is reached.

  (1) Pace. Annually commencing April 1, 2013, the Commission shall increase the cumulative plant capacity of the Standard Offer Program (the annual increase) until the 127.5-MW cumulative plant capacity of this subsection is reached.

  (A) Annual amounts. The amount of the annual increase shall be five MW for the three years commencing April 1, 2013, 7.5 MW for the three years commencing April 1, 2016, and 10 MW commencing April 1, 2019.

  (B) Blocks. Each year, a portion of the annual increase shall be reserved for new standard offer plants proposed by Vermont retail electricity providers (the provider block), and the remainder shall be reserved for new standard offer plants proposed by persons who are not providers (the independent developer block).

  (i) The portion of the annual increase reserved for the provider block shall be 10 percent for the three years commencing April 1, 2013, 15 percent for the three years commencing April 1, 2016, and 20 percent commencing April 1, 2019.

  (ii) If the provider block for a given year is not fully subscribed, any unsubscribed capacity within that block shall be added to the annual increase for each following year until that capacity is subscribed and shall be made available to new standard offer plants proposed by persons who are not providers.

  (iii) If the independent developer block for a given year is not fully subscribed, any unsubscribed capacity within that block shall be added to the annual increase for each following year until that capacity is subscribed and:

  (I) shall be made available to new standard offer plants proposed by persons who are not providers; and

  (II) may be made available to a provider following a written request and specific proposal submitted to and approved by the Commission.

  (C) Adjustment; greenhouse gas reduction credits. The Commission shall adjust the annual increase to account for greenhouse gas reduction credits by multiplying the annual increase by one minus the ratio of the prior year’s greenhouse gas reduction credits to that year’s statewide retail electric sales.

  (i) The amount of the prior year’s greenhouse gas reduction credits shall be determined in accordance with subdivision 8006a(a) of this title.

  (ii) The adjustment in the annual increase shall be applied proportionally to the independent developer block and the provider block.

  (iii) Greenhouse gas reduction credits used to diminish a provider’s obligation under section 8004 of this title may be used to adjust the annual increase under this subsection (c).

  (D) Pilot project; preferred locations. For one year commencing on January 1, 2017, the Commission shall allocate one-sixth of the annual increase to new standard offer plants that will be wholly located in one or more preferred locations other than parking lots or parking lot canopies and, separately, one-sixth of the annual increase to new standard offer plants that will be wholly located over parking lots or on parking lot canopies.

  (i) To qualify for these allocations, the plant shall not require the construction of a new substation by the interconnecting retail electricity provider or by increasing the capacity of one or more of the provider’s existing facilities. To qualify for the allocation to plants wholly located over parking lots or on parking lot canopies, the location shall remain in use as a parking lot.

  (ii) These allocations shall apply proportionally to the independent developer block and provider block.

  (iii) If an allocation under this pilot project is not fully subscribed, the Commission in 2017 shall allocate the unsubscribed capacity to new standard offer plants outside the pilot project.

  (iv) As used in this subdivision (D), “preferred location” means a site within the State on which a renewable energy plant will be located that is one of the following:

  (I) A new or existing structure whose primary use is not the generation of electricity or providing support for the placement of equipment that generates electricity.

  (II) A parking lot canopy over a paved parking lot, provided that the location remains in use as a parking lot.

  (III) A tract previously developed for a use other than siting a plant on which a structure or impervious surface was lawfully in existence and use prior to July 1 of the year preceding the year in which an application for a certificate of public good under section 248 of this title for the plant is filed or in which the plant seeks an award of a contract under the Standard Offer Program under this section, whichever is earlier. To qualify under this subdivision (III), the limits of disturbance of a proposed renewable energy plant must include either the existing structure or impervious surface and shall not include any headwaters, streams, shorelines, floodways, rare and irreplaceable natural areas, necessary wildlife habitat, wetlands, endangered species, productive forestlands, and primary agricultural soils, all of which are as defined in 10 V.S.A. chapter 151.

  (IV) Land certified by the Secretary of Natural Resources to be a brownfield site as defined under 10 V.S.A. § 6642.

  (V) A sanitary landfill as defined in 10 V.S.A. § 6602, provided that the Secretary of Natural Resources certifies that the land constitutes such a landfill and is suitable for the development of the plant.

  (VI) The disturbed portion of a gravel pit, quarry, or similar site for the extraction of a mineral resource, provided that all activities pertaining to site reclamation required by applicable law or permit condition are satisfied prior to the installation of the plant.

  (VII) A specific location designated in a duly adopted municipal plan under 24 V.S.A. chapter 117 for the siting of a renewable energy plant or specific type or size of renewable energy plant, provided that the plant meets any siting criteria recommended in the plan for the location.

  (VIII) A site listed on the National Priorities List (NPL) established under the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. chapter 103, if the U.S. Environmental Protection Agency or the Agency of Natural Resources confirms each of the following:

  (aa) The site is listed on the NPL.

  (bb) Development of the plant on the site will not compromise or interfere with remedial action on the site.

  (cc) The site is suitable for development of the plant.

  (IX) A new hydroelectric generation facility at a dam in existence as of January 1, 2016 or a hydroelectric generation facility that was in existence but not in service for a period of at least 10 years prior to January 1, 2016 and that will be redeveloped for electric generation, if the facility has received approval or a grant of exemption from the U.S. Federal Energy Regulatory Commission.

  (2) Technology allocations. The Commission shall allocate the 127.5-MW cumulative plant capacity of this subsection among different categories of renewable energy technologies. These categories shall include at least each of the following: methane derived from a landfill; solar power; wind power with a plant capacity of 100 kW or less; wind power with a plant capacity greater than 100 kW; hydroelectric power; and biomass power using a fuel other than methane derived from an agricultural operation or landfill.

  (d) Plants outside cumulative capacity. The following categories of plants shall not count toward the cumulative capacity amount of subsection (c) of this section, and the Commission shall make standard offers available to them provided that they are otherwise eligible for such offers under this section:

  (1) Plants using methane derived from an agricultural operation.

  (2) New standard offer plants that the Commission determines will have sufficient benefits to the operation and management of the electric grid or a provider’s portion thereof because of their design, characteristics, location, or any other discernible benefit. To enhance the ability of new standard offer plants to mitigate transmission and distribution constraints, the Commission shall require Vermont retail electricity providers and companies that own or operate electric transmission facilities within the State to make sufficient information concerning these constraints available to developers who propose new standard offer plants.

  (A) By March 1, 2013, the Commission shall develop a screening framework or guidelines that will provide developers with adequate information regarding constrained areas in which generation having particular characteristics is reasonably likely to provide sufficient benefit to allow the generation to qualify for eligibility under this subdivision (2).

  (B) Once the Commission develops the screening framework or guidelines under subdivision (2)(A) of this subsection (d), the Commission shall require Vermont transmission and retail electricity providers to make the necessary information publicly available in a timely manner, with updates at least annually.

  (C) Nothing in this subdivision shall require the disclosure of information in contravention of federal law.

  (e) Term. The term of a standard offer required by this section shall be 10 to 20 years, except that the term of a standard offer for a plant using solar power shall be 10 to 25 years.

  (f) Price. The categories of renewable energy for which the Commission shall set standard offer prices shall include at least each of the categories established pursuant to subdivision (c)(2) of this section. The Commission by order shall determine and set the price paid to a plant owner for each kWh generated under a standard offer required by this section, with a goal of ensuring timely development at the lowest feasible cost. The Commission shall not be required to make this determination as a contested case under 3 V.S.A. chapter 25.

  (1) Market-based mechanisms. For new standard offer projects, the Commission shall use a market-based mechanism, such as a reverse auction or other procurement tool, to obtain up to the authorized amount of a category of renewable energy, if it first finds that use of the mechanism is consistent with:

  (A) applicable federal law; and

  (B) the goal of timely development at the lowest feasible cost.

  (2) Avoided cost.

  (A) The price paid for each category of renewable energy shall be the avoided cost of the Vermont composite electric utility system if the Commission finds either of the following:

  (i) Use of the pricing mechanism described in subdivision (1) (market-based mechanisms) of this subsection (f) is inconsistent with applicable federal law.

  (ii) Use of the pricing mechanism described in subdivision (1) (market-based mechanisms) of this subsection (f) is reasonably likely to result in prices higher than the prices that would apply under this subdivision (2).

  (B) For the purpose of this subsection (f), the term “avoided cost” means the incremental cost to retail electricity providers of electric energy or capacity, or both, which, but for the purchase through the standard offer, such providers would obtain from distributed renewable generation that uses the same generation technology as the category of renewable energy for which the Commission is setting the price. For the purpose of this subsection (f), the term “avoided cost” also includes the Commission’s consideration of each of the following:

  (i) The relevant cost data of the Vermont composite electric utility system.

  (ii) The terms of the contract, including the duration of the obligation.

  (iii) The availability, during the system’s daily and seasonal peak periods, of capacity or energy purchased through the standard offer, and the estimated savings from mitigating peak load.

  (iv) The relationship of the availability of energy or capacity purchased through the standard offer to the ability of the Vermont composite electric utility system or a portion thereof to avoid costs.

  (v) The costs or savings resulting from variations in line losses and other impacts to the transmission or distribution system from those that would have existed in the absence of purchases through the standard offer.

  (vi) The supply and cost characteristics of plants eligible to receive the standard offer.

  (3) Price determinations. The Commission shall take all actions necessary to determine the pricing mechanism and implement the pricing requirements of this subsection (f) no later than March 1, 2013 for effect on April 1, 2013. Annually thereafter, the Commission shall review the determinations previously made under this subsection to decide whether they should be modified in any respect in order to achieve the goal and requirements of this subsection. Any such modification shall be effective on a prospective basis commencing one month after it has been made. Once a pricing determination made or modified under this subsection goes into effect, subsequently executed standard offer contracts shall comply with the most recently effective determination.

  (4) Price stability. Once a plant owner has executed a contract for a standard offer under this section, the plant owner shall continue to receive the price agreed on in that contract regardless of whether the Commission subsequently changes the price applicable to the plant’s category of renewable energy.

  (5) Price; preferred location pilots. For the period during which the Commission allocates capacity to new standard offer plants that will be wholly located in one or more preferred locations as set forth in subdivision (c)(1)(D) of this section, the following shall apply to the price paid to such a plant:

  (A) If the Commission uses a market-based mechanism under subdivision (1) of this subsection (f) to determine this price for one or both of the two allocations of capacity, the Commission shall compare only the proposals of plants that qualify for the allocation.

  (B) If the Commission uses avoided costs under subdivision (2) of this subsection (f) to determine this price for one or both of the two allocations of capacity, the Commission shall apply the definition of “avoided costs” as set forth in subdivision (2)(B) of this subsection with the modification that the avoided energy or capacity shall be from distributed renewable generation that is sited on a location that qualifies for the allocation.

  (C) With respect to the allocation to the new standard offer plants that will be wholly located over parking lots or on parking lot canopies, if the Commission receives only one application or multiple applications for plants owned or controlled by the same person as defined in 10 V.S.A. § 6001, the Commission shall investigate each application and shall have discretion to reduce the price to be consistent with the standard offer price for plants outside the pilot project using the same generation technology.

  (g) Qualifying existing agricultural plants. Notwithstanding any other provision of this section, on and after June 8, 2010, a standard offer shall be available for a qualifying existing plant as defined in Sec. 3 of No. 159 of the Acts of the 2009 Adj. Sess. (2010) (Act 159). The provisions of subdivision 8005(b)(2) of this title, as they existed on June 4, 2010, the effective date of Act 159, shall govern a standard offer under this subsection. Standard offers for these plants shall not be subject to subsection (c) of this section (cumulative capacity; new standard offer plants).

  (h) Application process. The Commission shall administer the process of applying for and obtaining a standard offer contract in a manner that ensures that the resources and capacity of the Standard Offer Program are used for plants that are reasonably likely to achieve commissioning.

  (i) Interconnection application. No contract under this section for a new standard offer plant shall be executed unless and until the plant owner submits a complete application to interconnect the plant to the subtransmission or distribution system of the applicable retail electricity provider.

  (j) Termination; reallocation. In the event a proposed plant accepting a standard offer fails to meet the requirements of the Program in a timely manner, the plant’s standard offer contract shall terminate, and any capacity reserved for the plant within the Program shall be reallocated to one or more eligible plants.

  (1) For the purpose of this subsection, the requirements of the Program shall include commissioning of all new standard offer plants, except plants using methane derived from an agricultural operation, within the following periods after execution of the plant’s standard offer contract:

  (A) 24 months if the plant is solar power or is wind power with a plant capacity of 100 kW or less; and

  (B) 36 months if the plant uses a fuel source not described in subdivision 1(A) of this subsection (j) or is wind power of greater than 100 kW capacity.

  (2) At the request of a plant owner or for other good cause, the Commission may extend a period described in subdivision (1) of this subsection (j) if it finds that the plant owner has proceeded diligently and in good faith and that commissioning of the plant has been delayed because of litigation or appeal or because of the need to obtain an approval the timing of which is outside the Commission’s control, or for other good cause as determined by the Commission.

  (k) Executed standard offer contracts; transferability; allocation of benefits and costs. With respect to executed contracts for standard offers under this section:

  (1) A contract shall be transferable. The contract transferee shall notify the Standard Offer Facilitator of the contract transfer within 30 days of transfer.

  (2) The Standard Offer Facilitator shall distribute the electricity purchased to the Vermont retail electricity providers at the price paid to the plant owners, allocated to the providers based on their pro rata share of total Vermont retail kWh sales for the previous calendar year, and the Vermont retail electricity providers shall accept and pay the Standard Offer Facilitator for the electricity. However, during any given calendar year:

  (A) Calculation of pro rata shares under this subdivision (2) shall include an adjustment in the allocation to a provider if one or more of the provider’s customers created greenhouse gas reduction credits under section 8006a of this title that are used to reduce the size of the annual increase under subdivision (c)(1)(C)(adjustment; greenhouse gas reduction credits) of this section. The adjustment shall ensure that any and all benefits or costs from the use of such credits flow to the provider whose customers created the credits. The savings that a provider realizes as a result of this application of greenhouse gas reduction credits shall be passed on proportionally to the customers that created the credits.

  (B) A retail electricity provider that was relieved from the requirements of this subdivision by the Commission on or before January 25, 2018, shall be exempt from the requirements of this subdivision in any year that the Standard Offer Facilitator allocates electricity pursuant to this subdivision if the retail electricity provider meets the following criteria:

  (i) during the immediately preceding 12-month period ending October 31, the amount of renewable energy supplied to the provider by generation owned by or under contract to the provider, regardless of whether the provider owned the energy’s environmental attributes, was not less than the amount of energy sold by the provider to its retail customers; and

  (ii) the retail electricity provider owns and retires an amount of 30 V.S.A. § 8005(a)(1) qualified energy environmental attributes that is not less than the provider’s retail sales.

  (3) The Standard Offer Facilitator shall transfer the environmental attributes, including any tradeable renewable energy credits, of electricity purchased under standard offer contracts to the Vermont retail electricity providers in accordance with their pro rata share of the costs for such electricity as determined under subdivision (2) of this subsection (k), except that in the case of a plant using methane from agricultural operations, the plant owner shall retain such attributes and credits to be sold separately at the owner’s discretion. It shall be a condition of a standard offer issued under this section that tradeable renewable energy credits associated with a plant that accepts the standard offer are owned by the retail electricity providers purchasing power generated by the plant, except in the case of a plant using methane from agricultural operations.

  (4) The Standard Offer Facilitator shall transfer all capacity rights attributable to the plant capacity associated with the electricity purchased under standard offer contracts to the Vermont retail electricity providers in accordance with their pro rata share of the costs for such electricity as determined under subdivision (2) of this subsection (k).

  (5) All reasonable costs of a Vermont retail electricity provider incurred under this subsection shall be included in the provider’s revenue requirement for purposes of ratemaking under sections 218, 218d, 225, and 227 of this title. In including such costs, the Commission shall appropriately account for any credits received under subdivisions (3) and (4) of this subsection (k). Costs included in a retail electricity provider’s revenue requirement under this subdivision (5) shall be allocated to the provider’s ratepayers as directed by the Commission.

  (l) Standard Offer Facilitator; expenses; payment. With respect to standard offers under this section, the Commission shall:

  (1) determine a Standard Offer Facilitator’s reasonable expenses arising from its role and the allocation of the expenses among plant owners and Vermont retail electricity providers;

  (2) determine the manner and timing of payments by a Standard Offer Facilitator to plant owners for energy purchased under an executed contract for a standard offer;

  (3) determine the manner and timing of payments to the Standard Offer Facilitator by the Vermont retail electricity providers for energy distributed to them under executed contracts for standard offers;

  (4) establish reporting requirements of a Standard Offer Facilitator, a plant owner, and a Vermont retail electricity provider.

  (m) Metering. With respect to standard offers under this section, the Commission shall make rule revisions concerning metering and the allocation of metering costs as needed to implement the standard offer requirements of this section.

  (n) Wood biomass. In addition to the other requirements of this section, wood biomass resources may receive a standard offer under this section only if they have a design system efficiency (the sum of full load design thermal output and electric output divided by the heat input) of at least 50 percent.

  (o) Voluntary contracts. The existence of a standard offer under this section shall not preclude a voluntary contract between a plant owner and a Vermont retail electricity provider on terms that may be different from those under the standard offer. A plant owner who declines a voluntary contract may still accept a standard offer under this section.

  (p) Existing hydroelectric plants. Notwithstanding any contrary requirement of this section, no later than January 15, 2013, the Commission shall make a standard offer contract available to existing hydroelectric plants in accordance with this subsection.

  (1) In this subsection:

  (A) “Existing hydroelectric plant” means a hydroelectric plant of five MW plant capacity or less that is located in the State, that was in service as of January 1, 2009, that is a qualifying small power production facility under 16 U.S.C. § 796(17)(C) and 18 C.F.R. part 292, and that does not have an agreement with the Commission’s purchasing agent for the purchase of its power pursuant to subdivision 209(a)(8) of this title and Commission rules adopted under subdivision (8). The term includes hydroelectric plants that have never had such an agreement and hydroelectric plants for which such an agreement has expired.

  (B) “LIHI” means the Low-Impact Hydropower Institute.

  (2) The term of a standard offer contract under this subsection shall be 10 or 20 years, at the election of the plant owner.

  (3) Unless inconsistent with applicable federal law, the price of a standard offer contract shall be the sum of the following elements:

  (A) a two-year rolling average of the ISO New England Inc. (ISO-NE) Vermont zone hourly locational marginal price for energy;

  (B) a two-year rolling average of the value of the plant’s capacity in the ISO-NE forward capacity market;

  (C) the value of avoided line losses due to the plant as a fixed increment of the energy and capacity values;

  (D) a two-year rolling average of the market value of environmental attributes, including renewable energy credits; and

  (E) the value of a 10- or 20-year contract.

  (4) The Commission shall determine the price to be paid under this subsection (p) not later than January 15, 2013.

  (A)(i) Annually by January 15 commencing in 2014, the Commission shall recalculate and adjust the energy, capacity, and environmental attribute elements of the price under subdivision (3) of this subsection (p). The recalculated and adjusted energy, capacity, and environmental attribute elements shall apply to all contracts executed under this subdivision, whether or not the contracts were executed prior to the adjustments.

  (ii) the Commission may periodically adjust the value of environmental attributes that are applicable to an executed contract based upon whether the plant becomes certified by LIHI or loses such certification.

  (B) With respect to the price elements specified in subdivisions(3)(C)(avoided line losses) and (E)(value of long-term contract) of this subsection (p):

  (i) These elements shall remain fixed at their values at the time a contract is signed for the duration of the contract.

  (ii) The Commission annually may adjust these elements for inclusion in contracts that are executed after the date any such adjustments are made.

  (5) Once a plant owner has executed a contract for a standard offer under this subsection (p), the plant owner shall continue to receive the pricing terms agreed on in that contract regardless of whether the Commission subsequently changes any pricing terms under this subsection.

  (6) Capacity of existing hydroelectric plants executing a standard offer contract under this subsection shall not count toward the cumulative capacity amount of subsection (c) of this section.

  (q) Allocation of regulatory costs. The Commission and Department may authorize or retain legal counsel, official stenographers, expert witnesses, advisors, temporary employees, and research services in conjunction with implementing their responsibilities under this section. In lieu of allocating such costs pursuant to subsection 21(a) of this title, the Commission or Department may allocate the expense in the same manner as the Standard Offer Facilitator’s costs under subdivision (l)(1) of this section.

  (r) State; nonliability. The State and its instrumentalities shall not be liable to a plant owner or retail electricity provider with respect to any matter related to the Standard Offer Program, including costs associated with a standard offer contract or any damages arising from the breach of such a contract, the flow of power between a plant and the electric grid, or the interconnection of a plant to that grid. (Added 2011, No. 170 (Adj. Sess.), § 4, eff. May 18, 2012; amended 2013, No. 34, § 20; 2015, No. 56, § 4; 2015, No. 97 (Adj. Sess.), § 62; 2015, No. 174 (Adj. Sess.), § 12a; 2019, No. 31, §§ 15, 27; 2021, No. 42, § 8.)

• § 8005b. Renewable energy programs; reports

  (a) The Department shall file reports with the General Assembly in accordance with this section.

  (1) The House Committees on Commerce and Economic Development and on Energy and Technology and the Senate Committees on Economic Development, Housing and General Affairs, on Finance, and on Natural Resources and Energy each shall receive a copy of these reports.

  (2) The Department shall include the components of subsection (b) of this section in its Annual Energy Report required under subsection 202b(e) of this title commencing in 2020 through 2033.

  (3) The Department shall include the components of subsection (c) of this section in its Annual Energy Report required under subsection 202b(e) of this title biennially commencing in 2020 through 2033.

  (4) The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the reports to be made under this section.

  (b) The annual report under this section shall include at least each of the following:

  (1) An assessment of the costs and benefits of the RES based on the most current available data, including rate and economic impacts, customer savings, technology deployment, greenhouse gas emission reductions actually achieved, fuel price stability, effect on transmission and distribution upgrade costs, and any recommended changes based on this assessment.

  (2) Projections, looking at least 10 years ahead, of the impacts of the RES.

  (A) The Department shall employ an economic model to make these projections, to be known as the Consolidated RES Model, and shall consider at least three scenarios based on high, mid-range, and low energy price forecasts.

  (B) The Department shall make the model and associated documents available on the Department’s website.

  (C) In preparing these projections, the Department shall:

  (i) characterize each of the model’s assumptions according to level of certainty, with the levels being high, medium, and low; and

  (ii) provide an opportunity for public comment.

  (D) The Department shall project, for the State, the impact of the RES in each of the following areas: electric utility rates; total energy consumption; electric energy consumption; fossil fuel consumption; and greenhouse gas emissions. The report shall compare the amount or level in each of these areas with and without the program.

  (3) An assessment of whether the requirements of the RES have been met to date, and any recommended changes needed to achieve those requirements.

  (c) The biennial report under this section shall include at least each of the following:

  (1) The retail sales, in kWh, of electricity in Vermont during the two preceding calendar years. The report shall include the statewide total and the total sold by each retail electricity provider.

  (2) Commencing with the report to be filed in 2019, each retail electricity provider’s required amount of renewable energy during the two preceding years using the most recent available data for each category of the RES as set forth in section 8005 of this title.

  (3) For the two preceding calendar years, the amounts of renewable energy and tradeable renewable energy credits eligible to satisfy the requirements of sections 8004 and 8005 of this title actually owned by the Vermont retail electricity providers, expressed as a percentage of retail kWh sales. The report shall include the statewide total and the total owned by each retail electricity provider for each of these amounts and shall discuss the progress of each provider toward achieving each of the categories set forth in section 8005 of this title. The report shall summarize the energy transformation projects undertaken pursuant to section 8005 of this title, their costs and benefits, their claimed avoided fossil fuel consumption and greenhouse gas emissions, and, if applicable, claimed energy savings.

  (4) A summary of the activities of the Standard Offer Program under section 8005a of this title, including the number of plants participating in the Program, the prices paid by the Program, and the plant capacity and average annual energy generation of the participating plants. The report shall present this information as totals for all participating plants and by category of renewable energy technology. The report also shall identify the number of applications received, the number of participating plants under contract, and the number of participating plants actually in service.

  (5) An assessment of the energy efficiency and renewable energy markets and recommendations to the General Assembly regarding strategies that may be necessary to encourage the use of these resources to help meet upcoming supply requirements.

  (6) An assessment of whether Vermont retail electric rates are rising faster than inflation as measured by the CPI, and a comparison of Vermont’s electric rates with electric rates in other New England states and in New York. If statewide average rates have risen faster than inflation over the preceding two or more years, the report shall include an assessment of the contributions to rate increases from various sources, such as the costs of energy and capacity, costs due to construction of transmission and distribution infrastructure, and costs due to compliance with the requirements of sections 8004 and 8005 (RES) and section 8005a (standard offer) of this title. Specific consideration shall be given to the price of renewable energy and the diversity, reliability, availability, dispatch flexibility, and full life cycle cost, including environmental benefits and greenhouse gas reductions, on a net present value basis of renewable energy resources available from suppliers. The report shall include any recommendations for statutory change that arise from this assessment. If electric rates have increased primarily due to cost increases attributable to nonrenewable sources of electricity or to the electric transmission or distribution systems, the report shall include a recommendation regarding whether to increase the size of the annual increase described in subdivision 8005a(c)(1) (standard offer; cumulative capacity; pace) of this title.

  (7)(A) Commencing with the report to be filed in 2019, an assessment of whether strict compliance with the requirements of sections 8004 and 8005 (RES) and section 8005a (standard offer) of this title:

  (i) has caused one or more providers to raise its retail rates faster over the preceding two or more years than statewide average retail rates have risen over the same time period;

  (ii) will cause retail rate increases particular to one or more providers; or

  (iii) will impair the ability of one or more providers to meet the public’s need for energy services in the manner set forth under subdivision 218c(a)(1) of this title (least-cost integrated planning).

  (B) Based on this assessment, consideration of whether statutory changes should be made to grant providers additional flexibility in meeting requirements of sections 8004 and 8005 or section 8005a of this title.

  (8) Any recommendations for statutory change related to sections 8004, 8005, and 8005a of this title.

  (d) During the preparation of reports under this section, the Department shall provide an opportunity for the public to submit relevant information and recommendations. (Added 2011, No. 170 (Adj. Sess.), § 6; amended 2015, No. 56, § 6; 2017, No. 113 (Adj. Sess.), § 175a; 2019, No. 31, § 5.)

• § 8006. Tradeable credits; environmental attributes; recognition, monitoring, and disclosure

  (a) The Commission shall establish or adopt a system of tradeable renewable energy credits for renewable resources that may be earned by electric generation qualifying for the RES. The system shall recognize tradeable renewable energy credits monitored and traded on the New England Generation Information System (GIS); shall provide a process for the recognition, approval, and monitoring of environmental attributes attached to renewable energy that are eligible to satisfy the requirements of sections 8004 and 8005 of this title but are not monitored and traded on the GIS; and shall otherwise be consistent with regional practices.

  (b) The Commission shall ensure that all electricity provider and provider-affiliate disclosures and representations made with regard to a provider’s portfolio are accurate and reasonably supported by objective data. Further, the Commission shall ensure that providers disclose the types of generation used and shall clearly distinguish between energy or tradeable energy credits provided from renewable and nonrenewable energy sources and existing and new renewable energy. (Added 2005, No. 61, § 4; amended 2011, No. 47, § 18; 2015, No. 56, § 7.)

• § 8006a. Greenhouse gas reduction credits

  (a) Standard offer adjustment. In accordance with this section, greenhouse gas reduction credits generated by an eligible ratepayer shall result in an adjustment of the standard offer under subdivision 8005a(c)(1) of this title (cumulative capacity; pace). For the purpose of adjusting the standard offer under subdivision 8005a(c)(1) of this title, the amount of a year’s greenhouse gas reduction credits shall be the lesser of the following:

  (1) The amount of greenhouse gas reduction credits created by the eligible ratepayers served by all providers.

  (2) The providers’ annual retail electric sales during that year to those eligible ratepayers creating greenhouse gas reduction credits.

  (b) Definitions. In this section:

  (1) “Eligible ratepayer” means a customer of a Vermont retail electricity provider who takes service at 115 kilovolts and has demonstrated to the Commission that it has a comprehensive energy and environmental management program. Provision of the customer’s certification issued under standard 14001 (environmental management systems) of the International Organization for Standardization (ISO) shall constitute such a demonstration.

  (2) “Eligible reduction” means a reduction in non-energy-related greenhouse gas emissions from manufacturing processes at an in-state facility of an eligible ratepayer, provided that each of the following applies:

  (A) The reduction results from a specific project undertaken by the eligible ratepayer at the in-state facility after January 1, 2012.

  (B) The specific project reduces or avoids greenhouse gas emissions above and beyond any reductions of such emissions required by federal and State statutes and rules.

  (C) The reductions are quantifiable and verified by an independent third party as approved by the Commission. Such independent third parties shall be certified by a body accredited by the American National Standards Institute (ANSI) as having a certification program that meets the ISO standards applicable to verification and validation of greenhouse gas assertions.

  (3) “Greenhouse gas” shall be as defined under 10 V.S.A. § 552.

  (4) “Greenhouse gas reduction credit” means a credit for eligible reductions, calculated in accordance with subsection (c) of this section and expressed as a kWh credit.

  (c) Calculation. Greenhouse gas reduction credits shall be calculated as follows:

  (1) Eligible reductions shall be quantified in metric tons of CO2 equivalent, in accordance with the methodologies specified under 40 C.F.R. part 98, and may be counted annually for the life of the specific project that resulted in the reduction.

  (2) Metric tons of CO2 equivalent quantified under subdivision (1) of this subsection shall be converted into units of energy through calculation of the equivalent number of kWh of generation by renewable energy plants, other than biomass, that would be required to achieve the same level of greenhouse gas emission reduction through the displacement of market power purchases. For the purpose of this subdivision, the value of the avoided greenhouse gas emissions shall be based on the aggregate greenhouse gas emission characteristics of system power in the regional transmission area overseen by the Independent System Operator of New England (ISO-NE).

  (d) Reporting. An eligible ratepayer shall report to the Commission annually on each specific project undertaken to create eligible reductions. The Commission shall specify the required contents of such reports, which shall be publicly available.

  (e) Savings. A provider shall pass on savings that it realizes through greenhouse gas reduction credits proportionally to the eligible ratepayers generating the credits. (Added 2011, No. 170 (Adj. Sess.), § 8, eff. May 18, 2012.)

• § 8007. Small renewable energy plants; simplified procedures

  (a) The same application form, rules, and procedures that the Commission applies to net metering systems of 150 kilowatts (kW) or less under sections 248 and 8010 of this title shall apply to the review under section 248 of this title of any renewable energy plant with a plant capacity of 150 kW or less and to the interconnection of such a plant with the system of a Vermont retail electricity provider. This requirement includes any waivers of criteria under section 248 of this title made pursuant to section 8010 of this title.

  (b) With respect to renewable energy plants that have a plant capacity that is greater than 150 kW and is 2.2 MW or less, the Commission shall establish by rule or order standards and procedures governing application for, and issuance or revocation of, a certificate of public good for such a plant under the provisions of section 248 of this title, and the interconnection of such a plant with the system of a Vermont retail electricity provider.

  (1) In developing such rules or orders, the Commission:

  (A) Shall waive the requirements of section 248 of this title that are not applicable to such a plant, including, for a plant that is not owned by a Vermont retail electricity provider, criteria that are generally applicable to such a provider.

  (B) May modify notice and hearing requirements of this title as it deems appropriate.

  (C) Shall simplify the petition and review process as appropriate.

  (2) Notwithstanding 1 V.S.A. §§ 213 and 214, a petitioner whose petition under section 248 of this title is pending as of the effective date of a Commission rule or order under this subsection (b) may elect to apply the standards and procedures of such a rule or order to the pending petition if the petition pertains to a renewable energy plant with a plant capacity that is greater than 150 kW and is 2.2 MW or less. (Added 2009, No. 159 (Adj. Sess.), § 6, eff. June 4, 2010; 2013, No. 99 (Adj. Sess.), § 6, eff. Jan. 1, 2017.)

• § 8008. Agreements; attribute revenues; disposition by Commission

  (a) As used in this section, “the revenues” means revenues that are from the sale, through tradeable renewable energy certificates or other means, of environmental attributes associated with the generation of renewable energy from a system of generation resources with a total plant capacity greater than 200 MW and that are received by a Vermont retail electricity provider on or after May 1, 2012, pursuant to an agreement, contract, memorandum of understanding, or other transaction in which a person or entity agrees to transfer such revenues or rights associated with such attributes to the provider.

  (b) After notice and opportunity for hearing, the Commission shall determine the disposition, allocation, and use of the revenues in a manner that promotes State energy policy as stated in section 202a of this title and the goals of this chapter and supports achievement of the greenhouse gas reduction and building efficiency goals contained in 10 V.S.A. §§ 578(a) and 581.

  (1) The Commission shall provide notice of the proceeding to each Vermont retail electricity provider, the Department, the Clean Energy Development Board under 10 V.S.A. § 6523, each fuel efficiency service provider appointed under subsection 203a(b) of this title, each energy efficiency entity appointed under subdivision 209(d)(2) of this title, the Institute for Energy and the Environment at the Vermont Law School, the Transportation Research Center at the University of Vermont, and any other persons or entities that have requested notice. The Commission may provide notice to additional persons or entities.

  (2) In determining the disposition, allocation, and use of the revenues, the Commission shall consider each of the following potential uses of the revenues:

  (A) Development of in-state renewable energy resources.

  (B) Deposit into the Clean Energy Development Fund for use pursuant to section 8015 of this title.

  (C) Deposit into the Fuel Efficiency Fund for use pursuant to section 203a of this title.

  (D) Deposit into the Electric Efficiency Fund for use pursuant to section 209(d) of this title.

  (E) Application, for the benefit of ratepayers, to the revenue requirement of one or more Vermont retail electricity providers.

  (F) Development of transportation alternatives to vehicles that use gasoline such as electric or natural gas vehicles and supporting infrastructure and the coordination of such development with so-called “smart grid” electric transmission and distribution networks.

  (G) Any other uses that support the statutory policy and goals referenced in this subsection (b).

  (c) A Vermont retail electricity provider shall notify the Commission within 30 days of the first receipt of the revenues pursuant to an agreement, contract, memorandum of understanding, or other transaction under which it will receive the revenues. The Commission will open a proceeding under this section promptly on receipt of such notice and shall issue a final order in the proceeding within 12 months of such receipt.

  (d) Any of the revenues that are received prior to completion of the 12-month period described in subsection (c) of this section shall be credited, for the benefit of ratepayers, against the revenue requirement of the Vermont retail electricity provider that receives the revenues. (Added 2009, No. 159 (Adj. Sess.), § 13b, eff. June 4, 2010; amended 2011, No. 47, §§ 18, 20m(a); 2017, No. 74, § 127.)

• § 8009. Baseload renewable power portfolio requirement

  (a) As used in this section:

  (1) “Baseload renewable power” means a plant that generates electricity from renewable energy; that, during normal operation, is capable of taking all or part of the minimum load on an electric transmission or distribution system; and that produces electricity essentially continuously at a constant rate.

  (2) “Baseload renewable power portfolio requirement” means the actual output of baseload renewable power from an in-state woody biomass plant that was commissioned prior to September 30, 2009, has a nominal capacity of 20.5 MW, and was in service as of January 1, 2011.

  (3) “Biomass” means organic nonfossil material of biological origin constituting a source of renewable energy within the meaning of subdivision 8002(21) of this title.

  (4) [Repealed.]

  (b) Notwithstanding subsection 8004(a) and subdivision 8005(c)(1) of this title, commencing November 1, 2012, each Vermont retail electricity provider shall purchase the provider’s pro rata share of the baseload renewable power portfolio requirement, which shall be based on the total Vermont retail kWh sales of all such providers for the previous calendar year. The obligation created by this subsection shall cease on November 1, 2032 unless terminated earlier pursuant to subsection (k) of this section.

  (c) A plant used to satisfy the baseload renewable power portfolio requirement shall be a qualifying small power production facility under 16 U.S.C. § 796(17)(C) and 18 C.F.R. part 292.

  (d) On or before November 1, 2026, the Commission shall determine, for the period beginning on November 1, 2026 and ending on November 1, 2032, the price to be paid to a plant used to satisfy the baseload renewable power portfolio requirement. The Commission shall not be required to make this determination as a contested case under 3 V.S.A. chapter 25. The price shall be the avoided cost of the Vermont composite electric utility system. As used in this subsection, the term “avoided cost” means the incremental cost to retail electricity providers of electric energy or capacity, or both, which, but for the purchase from the plant proposed to satisfy the baseload renewable power portfolio requirement, such providers would obtain from a source using the same generation technology as the proposed plant. For the purposes of this subsection, the term “avoided cost” also includes the Commission’s consideration of each of the following:

  (1) The relevant cost data of the Vermont composite electric utility system.

  (2) The terms of the potential contract, including the duration of the obligation.

  (3) The availability, during the system’s daily and seasonal peak periods, of capacity or energy from a proposed plant.

  (4) The relationship of the availability of energy, capacity, renewable energy credits and attributes, and other ISO New England revenue streams from the proposed plant to the ability of the Vermont composite electric utility system or a portion thereof to avoid costs. Vermont retail electricity providers shall receive all output of the baseload renewable plant unless the contract price is reduced to reflect the value of all products, attributes, and services that are retained by the seller.

  (5) The costs or savings resulting from variations in line losses from those that would have existed in the absence of purchases from the proposed plant.

  (6) The supply and cost characteristics of the proposed plant, including the costs of operation and maintenance of an existing plant during the term of a proposed contract.

  (7) Mechanisms for encouraging dispatch of the plant relative to the ISO New England wholesale energy price and value of regional renewable energy credits while also respecting the physical operating parameters, the fixed costs of the proposed plant, and the impact on the forest economy.

  (8) The appropriate assignment of risks associated with the ISO New England Forward Capacity Market Pay for Performance program.

  (e) In determining the price under subsection (d) of this section, the Commission:

  (1) may require a plant proposed to be used to satisfy the baseload renewable power portfolio requirement to produce such information as the Commission reasonably deems necessary;

  (2) shall not consider the following in the determination of avoided cost:

  (A) capital investments made to meet the efficiency goal established in subsection (k) of this section;

  (B) revenue generated by the capital investment made to meet the efficiency goal established in subsection (k) of this section; and

  (C) operational costs and operational impacts associated with the project or projects implemented to meet the efficiency goals established in subsection (k) of this section; and

  (3) notwithstanding subdivision (2)(C) of this subsection, shall consider sharing with Vermont retail electricity providers the benefits associated with waste heat that may be used to benefit a facility that does not provide baseload renewable energy.

  (f) With respect to a plant used to satisfy the baseload renewable power portfolio requirement:

  (1) The Standard Offer Facilitator shall purchase the baseload renewable power and shall allocate the electricity purchased and any associated costs to the Vermont retail electricity providers based on their pro rata share of total Vermont retail kWh sales for the previous calendar year, and the Vermont retail electricity providers shall accept and pay those costs.

  (2) Any tradeable renewable energy credits and attributes that are attributable to the electricity purchased shall be transferred to the Vermont retail electricity providers in accordance with their pro rata share of the costs for such electricity as determined under subdivision (1) of this subsection unless the Commission approves the plant owner retaining renewable energy credits and attributes or other ISO New England revenue streams. If the Commission approves the plant owner retaining renewable energy credits and attributes, or other ISO New England revenue streams, the price paid by the Vermont retail electricity providers pursuant to this section may be reduced by the Commission to reflect the value of those credits, attributes, products, or services.

  (3) All capacity rights attributable to the plant capacity associated with the electricity purchased shall be transferred to the Vermont retail electricity providers in accordance with their pro rata share of the costs for such electricity as determined under subdivision (1) of this subsection.

  (4) All reasonable costs of a Vermont retail electricity provider incurred under this section shall be included in the provider’s revenue requirement for purposes of ratemaking under sections 218, 218d, 225, and 227 of this title. In including such costs, the Commission shall appropriately account for any credits received under subdivision (2) of this subsection. Costs included in a retail electricity provider’s revenue requirement under this subdivision shall be allocated to the provider’s ratepayers as directed by the Commission.

  (g) A retail electricity provider shall be exempt from the requirements of this section if, and for so long as, one-third of the electricity supplied by the provider to its customers is from a plant that produces electricity from woody biomass.

  (h) The Commission may issue rules or orders to carry out this section.

  (i) The State and its instrumentalities shall not be liable to a plant owner or retail electricity provider with respect to any matter related to the baseload renewable power portfolio requirement or a plant used to satisfy such requirement, including costs associated with a contract related to such a plant or any damages arising from the breach of such a contract, the flow of power between a plant and the electric grid, or the interconnection of a plant to that grid. For the purpose of this section, the Commission and the Standard Offer Facilitator constitute instrumentalities of the State.

  (j) The Commission shall authorize any Agency participating in a proceeding pursuant to this section or an order issued under this section to assess its costs against a proposed plant consistent with section 21 of this title.

  (k) Collocation and efficiency requirements.

  (1) The owner of the plant used to satisfy the baseload renewable power portfolio requirement shall cause the plant’s overall efficiency to be increased by at least 50 percent relative to the 12-month period preceding July 1, 2022. In achieving this efficiency, the owner shall comply with the requirements of this subsection.

  (2) On or before July 1, 2023, the owner of the plant shall submit to the Commission and the Department:

  (A) A signed contract providing for the construction of a facility at the plant that utilizes the excess thermal heat generated at the plant for a beneficial purpose. As used in this subdivision (A), beneficial purpose may include the displacement of fossil fuel use for the sustainable production of a product or service or more efficient or less costly generation of electricity.

  (B) A certification by a qualified professional engineer that the construction of the facility shall meet the requirement of subdivision (1) of this subsection (k).

  (3) On or before October 1, 2024, the owner of the plant shall submit to the Commission and the Department a certification that the main components of the facility used to meet the requirement of subdivision (1) of this subsection (k) have been completed.

  (4) If the contract and certification required under subdivision (2) of this subsection are not submitted to the Commission and Department on or before July 1, 2023 or if the certification required under subdivision (3) is not submitted to the Commission and Department on or before October 1, 2024, then the obligation under this section for each Vermont retail electricity provider to purchase a pro rata share of the baseload renewable power portfolio requirement shall cease on November 1, 2024, and the Commission is not required to conduct the rate determination provided for in subsection (d) of this section.

  (5) On or before September 1, 2025, the Department shall investigate and submit a recommendation to the Commission on whether the plant has achieved the requirement of subdivision (1) of this subsection. If the Department recommends that the plant has not achieved the requirement of subdivision (1) of this subsection, the obligation under this section shall cease on November 1, 2025, and the Commission is not required to conduct the rate determination provided for in subsection (d) of this section.

  (6) After November 1, 2026, the owner of the plant shall report annually to the Department and the Department shall verify the overall efficiency of the plant for the prior 12-month period. If the overall efficiency of the plant falls below the requirement of subdivision (1) of this subsection, the report shall include a plan to return the plant to the required efficiency within one year.

  (7) If, after implementing the plan in subdivision (6) of this subsection, the owner of the plant does not achieve the efficiency required in subdivision (1) of this subsection, the Department shall request that the Commission commence a proceeding to terminate the obligation under this section.

  (8) The Department may retain research, scientific, or engineering services to assist it in making the recommendation required under subdivision (5) of this subsection and in reviewing the information required under subdivision (6) of this subsection and may allocate the expense incurred or authorized by it to the plant’s owner.

  (l) Annual report. Beginning on August 1, 2023, the owner of the plant used to satisfy the baseload renewable power portfolio shall report annually to the House Committee on Environment and Energy and Senate Committee on Finance, the Commissioner of Forests, Parks and Recreation, and the Secretary of Commerce and Community Development on the wood fuel purchases for the plant. The report shall include the average monthly price paid for the wood fuel and the source of the wood fuel, including location, number, types, and sources of non-forest-derived wood. (Added 2011, No. 47, § 11; amended 2011, No. 170 (Adj. Sess.), § 9; 2015, No. 56, § 26; 2021, No. 39, § 1, eff. May 20, 2021; 2021, No. 155 (Adj. Sess.), § 1, eff. May 31, 2022.)

• § 8010. Self-generation and net metering

  (a) A customer may install and operate a net metering system in accordance with this section and the rules adopted under this section.

  (b) A net metering customer shall pay the same rates, fees, or other payments and be subject to the same conditions and requirements as all other purchasers from the interconnecting retail electricity provider in the same rate-class, except as this section or the rules adopted under this section may provide, and except for appropriate and necessary conditions approved by the Commission for the safety and reliability of the electric distribution system.

  (c) In accordance with this section, the Commission shall adopt and implement rules that govern the installation and operation of net metering systems.

  (1) The rules shall establish and maintain a net metering program that:

  (A) advances the goals and total renewables targets of this chapter and the goals of 10 V.S.A. § 578 (greenhouse gas reduction) and is consistent with the criteria of subsection 248(b) of this title;

  (B) achieves a level of deployment that is consistent with the recommendations of the Electrical Energy and Comprehensive Energy Plans under sections 202 and 202b of this title, unless the Commission determines that this level is inconsistent with the goals and targets identified in subdivision (1)(A) of this subsection (c). Under this subdivision (B), the Commission shall consider the Plans most recently issued at the time the Commission adopts or amends the rules;

  (C) to the extent feasible, ensures that net metering does not shift costs included in each retail electricity provider’s revenue requirement between net metering customers and other customers;

  (D) accounts for all costs and benefits of net metering, including the potential for net metering to contribute toward relieving supply constraints in the transmission and distribution systems and to reduce consumption of fossil fuels for heating and transportation;

  (E) ensures that all customers who want to participate in net metering have the opportunity to do so;

  (F) balances, over time, the pace of deployment and cost of the program with the program’s impact on rates;

  (G) accounts for changes over time in the cost of technology; and

  (H) allows a customer to retain ownership of the environmental attributes of energy generated by the customer’s net metering system and of any associated tradeable renewable energy credits or to transfer those attributes and credits to the interconnecting retail provider, and:

  (i) if the customer retains the attributes, reduces the value of the credit provided under this section for electricity generated by the customer’s net metering system by an appropriate amount; and

  (ii) if the customer transfers the attributes to the interconnecting provider, requires the provider to retain them for application toward compliance with sections 8004 and 8005 of this title.

  (2) The rules shall include provisions that govern:

  (A) whether there is a limit on the cumulative plant capacity of net metering systems to be installed over time and what that limit is, if any;

  (B) the transfer of certificates of public good issued for net metering systems and the abandonment of net metering systems;

  (C) the respective duties of retail electricity providers and net metering customers;

  (D) the electrical safety, power quality, interconnection, and metering of net metering systems;

  (E) the formation of group net metering systems, the resolution of disputes between group net metering customers and the interconnecting provider, and the billing, crediting, and disconnection of group net metering customers by the interconnecting provider; and

  (F) the amount of the credit to be assigned to each kWh of electricity generated by a net metering customer in excess of the electricity supplied by the interconnecting provider to the customer, the manner in which the customer’s credit will be applied on the customer’s bill, and the period during which a net metering customer must use the credit, after which the credit shall revert to the interconnecting provider.

  (i) When assigning an amount of credit under this subdivision (F), the Commission shall consider making multiple lengths of time available over which a customer may take a credit and differentiating the amount according to the length of time chosen. For example, a monthly credit amount may be higher if taken over 10 years and lower if taken over 20 years. Factors relevant to this consideration shall include the customer’s ability to finance the net metering system, the cost of that financing, and the net present value to all ratepayers of the net metering program.

  (ii) In this subdivision (ii), “existing net metering system” means a net metering system for which a complete application was filed before January 1, 2017.

  (I) Commencing 10 years from the date on which an existing net metering system was installed, the Commission may apply to the system the same rules governing bill credits and the use of those credits on the customer’s bill that it applies to net metering systems for which applications were filed on or after January 1, 2017, other than any adjustments related to siting and tradeable renewable energy credits.

  (II) This subdivision (ii) shall apply to existing net metering systems notwithstanding any contrary provision of 1 V.S.A. § 214 and 2014 Acts and Resolves No. 99, Sec. 10.

  (3) The rules shall establish standards and procedures governing application for and issuance or revocation of a certificate of public good for net metering systems under the provisions of section 248 of this title. In establishing these standards and procedures:

  (A) The rules may waive the requirements of section 248 of this title that are not applicable to net metering systems, including criteria that are generally applicable to public service companies as defined in this title.

  (B) The rules may modify notice and hearing requirements of this title as the Commission considers appropriate.

  (C) The rules shall seek to simplify the application and review process as appropriate, including simplifying the application and review process to encourage group net metering systems when the system is at least 50 percent owned by the customers who receive the bill credits for the electricity generated by the system.

  (D) With respect to net metering systems that exceed 150 kW in plant capacity, the rules shall apply the so-called “Quechee” test for aesthetic impact as described by the Vermont Supreme Court in the case of In re Halnon, 174 Vt. 515 (2002) (mem.). The rules and application form shall state the components of this test.

  (E) The rules shall not waive or include provisions that are less stringent than the requirements of subdivision 248(a)(4)(J) (required information) of this title.

  (F) This subdivision (F) applies to an application for a net metering system with a capacity that is greater than 15 kilowatts, unless the system is located on a new or existing structure the primary purpose of which is not the generation of electricity. With respect to such a system, the rules shall not waive or include provisions that are less stringent than each of the following:

  (i) the requirement of subdivision 248(a)(4)(C) of this title to provide a copy of the application to the Agencies of Agriculture, Food and Markets and of Natural Resources; the Department of Public Service; the Division for Historic Preservation; the municipal legislative body; and the municipal and regional planning commissions; and

  (ii) the requirements of subsection 248(f) (preapplication submittal) of this title.

  (4) This section does not require the Commission to adopt identical requirements for the service territory of each retail electricity provider.

  (5) Each retail electricity provider shall implement net metering in its service territory through a rate schedule that is consistent with this section and the rules adopted under this section and is approved by the Commission.

  (d) Commencing in 2021 and biennially thereafter, the Department shall submit to the Commission its evaluation of the current state of net metering in Vermont, which shall be included within the Department’s Annual Energy Report required under subsection 202b(e) of this title and shall also be submitted to the Committees listed under subdivision 202b(e)(2) of this title. The evaluation shall:

  (1) analyze the current pace of net metering deployment, both statewide and within the service territory of each retail electricity provider;

  (2) after considering the goals and policies of this chapter, of 10 V.S.A. § 578 (greenhouse gas reduction), of section 202a (State energy policy) of this title, and of the Electrical Energy and Comprehensive Energy Plans under sections 202 and 202b of this title, recommend the future pace of net metering deployment statewide and within the service territory of each provider;

  (3) analyze the existence and degree of cross-subsidy between net metering customers and other customers on a statewide and on an individual provider basis;

  (4) evaluate the effect of net metering on retail electricity provider infrastructure and revenue;

  (5) evaluate the benefits to net metering customers of connecting to the provider’s distribution system;

  (6) analyze the economic and environmental benefits of net metering, and the short- and long-term impacts on rates, both statewide and for each provider;

  (7) analyze the reliability and supply diversification costs and benefits of net metering;

  (8) evaluate the ownership and transfer of the environmental attributes of energy generated by net metering systems and of any associated tradeable renewable energy credits; and

  (9) examine and evaluate best practices for net metering identified from other states.

  (e) If a hydroelectric generation plant seeking approval as a net metering system is subject to licensing jurisdiction under the Federal Power Act, 16 U.S.C. chapter 12, subchapter 1, the Commission shall require the plant to obtain such approval through means other than by application for a certificate of public good under section 248 of this title.

  (f) Except for net metering systems for which the Commission has established a registration process, the Commission shall issue a final determination as to an uncontested application within 90 days of the date of the last substantive filing by a party. (Added 2013, No. 99 (Adj. Sess.), § 4, eff. Jan. 1, 2017; amended 2015, No. 56, § 12, eff. Jan. 2, 2017; 2015, No. 174 (Adj. Sess.), § 13, eff. Jan. 2, 2017; 2017, No. 42, § 7, eff. May 22, 2017; 2019, No. 31, § 6; 2019, No. 81, § 5.)

• § 8011. Energy storage facilities

  (a) The Commission may adopt and implement rules that govern the installation and operation of energy storage facilities of all sizes.

  (b) The rules may establish a size threshold below which storage facilities need not submit an application for a certificate of public good pursuant to section 248 of this title.

  (c) The rules may include provisions that govern:

  (1) the respective duties of retail electricity providers and energy storage facility owners or operators;

  (2) the electrical and fire safety, power quality, interconnection, metering, and decommissioning of energy storage facilities;

  (3) the resolution of disputes between energy storage facility owners, operators, and the interconnecting provider;

  (4) energy storage aggregators and the operation of aggregations; and

  (5) energy storage facilities paired with other resources, such as net metering and standard offer plants, including retrofits of existing plants.

  (d) The rules shall establish standards and procedures governing application for and issuance or revocation of a certificate of public good for certain energy storage facilities under the provisions of section 248 of this title. In establishing these standards and procedures, the rules may:

  (1) waive the requirements of section 248 of this title that are not applicable to energy storage facilities, including criteria that are generally applicable to public service companies as defined in this title;

  (2) modify notice and hearing requirements of this title as the Commission considers appropriate; and

  (3) seek to simplify the application and review process. (Added 2021, No. 54, § 11.)

• §§ 8012-8014. [Reserved for future use]

• Subchapter 002: Clean Energy Development Fund

• § 8015. Vermont Clean Energy Development Fund

  (a) Creation of Fund.

  (1) There is established the Vermont Clean Energy Development Fund to consist of each of the following:

  (A) The proceeds due the State under the terms of the memorandum of understanding between the Department of Public Service and Entergy Nuclear VY and Entergy Nuclear Operations, Inc. that was entered under Public Service Board docket 6812; together with the proceeds due the State under the terms of any subsequent memoranda of understanding entered before July 1, 2005 between the Department of Public Service and Entergy Nuclear VY and Entergy Nuclear Operations, Inc.

  (B) Any other monies that may be appropriated to or deposited into the Fund.

  (2) Balances in the Fund shall be expended solely for the purposes set forth in this subchapter and shall not be used for the general obligations of government. All balances in the Fund at the end of any fiscal year shall be carried forward and remain part of the Fund. Interest earned by the Fund shall be deposited in the Fund. This Fund is established in the State Treasury pursuant to 32 V.S.A. chapter 7, subchapter 5.

  (b) Definitions. As used in this section, the following definitions shall apply:

  (1) “Clean energy resources” means electric power supply and demand-side resources, or thermal energy or geothermal resources, that are “combined heat and power facilities,” “cost-effective energy efficiency resources,” or “renewable energy” resources.

  (2) “Combined heat and power (CHP) facility” means a generator that sequentially produces both electric power and thermal energy from a single source or fuel. In order for a fossil fuel-based CHP system to participate in the clean energy program set out in this section, at least 20 percent of its fuel’s total recovered energy must be thermal and at least 13 percent must be electric, the design system efficiency (the sum of full load design thermal output and electric output divided by the heat input) must be at least 65 percent, and it must meet air quality standards established by the Agency of Natural Resources.

  (3) “Cost-effective energy efficiency” means those energy efficiency and conservation measures that would qualify as part of a utility’s least-cost integrated plan under section 218c of this title or that would be an eligible expenditure under subsection 209(d) of this title.

  (4) “Emerging energy-efficient technologies” means technologies that are both precommercial but near commercialization and that have already entered the market but have less than five percent of current market share; that use less energy than existing technologies and practices to produce the same product or otherwise conserve energy and resources, regardless of whether or not they are connected to the grid; and that have additional non-energy benefits such as reduced environmental impact, improved productivity and worker safety, or reduced capital costs.

  (5) “Renewable energy” has the meaning established under section 8002 of this title, and shall include the following: solar photovoltaic and solar thermal energy; wind energy; geothermal heat pumps; farm, landfill, and sewer methane recovery; low emission, advanced biomass power, and combined heat and power technologies using biomass fuels such as wood, agricultural or food wastes, energy crops, and organic refuse-derived waste, but not municipal solid waste; advanced biomass heating technologies and technologies using biomass-derived fluid fuels such as biodiesel, bio-oil, and bio-gas.

  (6) “Energy storage” means a system that uses mechanical, chemical, or thermal processes to store energy for later use.

  (c) Purposes of Fund. The purposes of the Fund shall be to promote the development and deployment of cost-effective and environmentally sustainable electric power and thermal energy or geothermal resources for the long-term benefit of Vermont consumers, primarily with respect to renewable energy resources, and the use of combined heat and power technologies. The Fund also may be used to support natural gas and electric vehicles in accordance with subdivisions (d)(1)(K) and (L) of this section, respectively. The General Assembly expects and intends that the Public Utility Commission, Department of Public Service, and the State’s power and efficiency utilities will actively implement the authority granted in this title to acquire all reasonably available cost-effective energy efficiency resources for the benefit of Vermont ratepayers and the power system.

  (d) Expenditures authorized.

  (1) Projects for funding may include the following:

  (A) projects that will sell power in commercial quantities;

  (B) among those projects that will sell power in commercial quantities, funding priority will be given to those projects that commit to sell power to Vermont utilities on favorable terms;

  (C) projects to benefit publicly owned or leased buildings;

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

  (E) small-scale renewable energy in Vermont residences, institutions, and businesses:

  (i) generally; and

  (ii) through the Small-scale Renewable Energy Incentive Program;

  (F) projects under the agricultural economic development special account established under 6 V.S.A. § 4710(g) to harvest biomass, convert biomass to energy, or produce biofuel;

  (G) until December 31, 2008 only, super-efficient buildings;

  (H) projects to develop and use thermal or geothermal energy, regardless of whether they also involve the generation of electricity;

  (I) emerging energy-efficient technologies;

  (J) effective projects that are not likely to be established in the absence of funding under the program;

  (K) natural gas vehicles and associated fueling infrastructure if each such vehicle is dedicated only to natural gas fuel and, on a life cycle basis, the vehicle’s emissions will be lower than those of commercially available vehicles using other fossil fuel, and any such infrastructure will deliver gas without interruption of flow;

  (L) electric vehicles and associated charging stations;

  (M) energy storage projects that facilitate utilization of renewable energy resources.

  [Subdivision (d)(2) effective until June 30, 2027; see subdivision (d)(2) effective June 30, 2027 set out below.]

  (2) If during a particular year, the Commissioner of Public Service determines that there is a lack of high value projects eligible for funding, as identified in the five-year plan, or as otherwise identified, the Commissioner shall consult with the Clean Energy Development Board and shall consider transferring funds to the Energy Efficiency Fund established under the provisions of subsection 209(d) of this title. Such a transfer may take place only in response to an opportunity for a particularly cost-effective investment in energy efficiency, and only as a temporary supplement to funds collected under that subsection, not as replacement funding.

  [Subdivision (d)(2) effective June 30, 2027; see subdivision (d)(2) effective until June 30, 2027 set out above.]

  (2) If during a particular year, the Commissioner of Public Service determines that there is a lack of high value projects eligible for funding, as identified in the five-year plan, or as otherwise identified, the Commissioner shall consider transferring funds to the Energy Efficiency Fund established under the provisions of subsection 209(d) of this title. Such a transfer may take place only in response to an opportunity for a particularly cost-effective investment in energy efficiency, and only as a temporary supplement to funds collected under that subsection, not as replacement funding.

  (3) Notwithstanding any contrary provision of this section, the Clean Energy Development Fund shall use all of the monies from alternative compliance payments under sections 8004 and 8005 of this title for projects that meet the definition of “energy transformation project” under section 8002 of this title and the eligibility criteria for those projects under section 8005 of this title. The Fund shall implement projects in the service territory of the retail electricity provider or providers making the alternative compliance payments used to support the projects and, in the case of a project delivered in more than one territory, shall prorate service delivery according to each provider’s contribution. A provider shall not count, toward its required amount under the energy transformation category of section 8005 of this title, support provided by the Fund for an energy transformation project.

  [Subsection (e) effective until June 30, 2027; see subsection (e) effective June 30, 2027 set out below.]

  (e) Management of Fund.

  (1) This Fund shall be administered by the Department of Public Service to facilitate the development and implementation of clean energy resources. The Department is authorized to expend monies from the Clean Energy Development Fund in accordance with this section. The Commissioner of the Department shall make all decisions necessary to implement this section and administer the Fund except those decisions committed to the Clean Energy Development Board under this subsection. The Department shall ensure an open public process in the administration of the Fund for the purposes established in this subchapter.

  (2) During fiscal years after FY 2006, up to five percent of amounts appropriated to the Department of Public Service from the Fund may be used for administrative costs related to the Clean Energy Development Fund.

  (3) There is created the Clean Energy Development Board, which shall consist of seven persons appointed in accordance with subdivision (4) of this subsection.

  (A) The Clean Energy Development Board shall have decision-making and approval authority with respect to the plans, budget, and program designs described in subdivisions (7)(B)-(D) of this subsection (e). The Clean Energy Development Board shall function in an advisory capacity to the Commissioner on all other aspects of this section’s implementation.

  (B) During a Board member’s term and for a period of one year after the member leaves the Board, the Clean Energy Development Fund shall not make any award of funds to and shall confer no financial benefit on a company or corporation of which the member is an employee, officer, partner, proprietor, or Board member or of which the member owns more than 10 percent of the outstanding voting securities. This prohibition shall not apply to a financial benefit that is available to any person and is not awarded on a competitive basis or offered only to a limited number of persons.

  (4) The Commissioner of Public Service shall appoint three members of the Clean Energy Development Board, and the Chairs of the House Committee on Energy and Technology and the Senate Committee on Natural Resources and Energy each shall appoint two members of the Clean Energy Development Board. The terms of the members of the Clean Energy Development Board shall be four years, except that when appointments to this Board are made for the first time after May 25, 2011, each appointing authority shall appoint one member for a two-year term and the remaining members for four-year terms. When a vacancy occurs in the Board during the term of a member, the authority who appointed that member shall appoint a new member for the balance of the departing member’s term.

  (5) Except for those members of the Clean Energy Development Board otherwise regularly employed by the State, the compensation of the members shall be the same as that provided by 32 V.S.A. § 1010(a).

  (6) In performing its duties, the Clean Energy Development Board may utilize the legal and technical resources of the Department of Public Service. The Department of Public Service shall provide the Clean Energy Development Board with administrative services.

  (7) The Department shall perform each of the following:

  (A) On or before January 15 of each year, provide to the Senate Committees on Finance and on Natural Resources and Energy and the House Committees on Commerce and Economic Development and on House Committee on Environment and Energy a report for the fiscal year ending the preceding June 30 detailing the activities undertaken, the revenues collected, and the expenditures made under this subchapter. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subdivision.

  (B) Develop, and submit to the Clean Energy Development Board for review and approval, a five-year strategic plan and an annual program plan, both of which shall be developed with input from a public stakeholder process and shall be consistent with State energy planning principles.

  (C) Develop, and submit to the Clean Energy Development Board for review and approval, an annual operating budget.

  (D) Develop, and submit to the Clean Energy Development Board for review and approval, proposed program designs to facilitate clean energy market and project development (including use of financial assistance, investments, competitive solicitations, technical assistance, and other incentive programs and strategies). Prior to any approval of a new program or of a substantial modification to a previously approved program of the Clean Energy Development Fund, the Department of Public Service shall publish online the proposed program or modification, shall provide an opportunity for public comment of no less than 30 days, and shall provide to the Clean Energy Development Board copies of all comments received on the proposed program or modification. In this subdivision (D), “substantial modification” shall include a change to a program’s application criteria or application deadlines and shall include any change to a program if advance knowledge of the change could unfairly benefit one applicant over another applicant. For the purpose of 3 V.S.A. § 831(c) (initiating rulemaking on request), a new program or substantial modification of a previously approved program shall be treated as if it were an existing practice or procedure.

  (8) At least annually, the Clean Energy Development Board and the Commissioner or designee jointly shall hold a public meeting to review and discuss the status of the Fund, Fund projects, the performance of the Fund Manager, any reports, information, or inquiries submitted by the Fund Manager or the public, and any additional matters they deem necessary to fulfill their obligations under this section.

  [Subsection (e) effective June 30, 2027; see subsection (e) effective until June 30, 2027 set out above.]

  (e) Management of Fund.

  (1) This Fund shall be administered by the Department of Public Service to facilitate the development and implementation of clean energy resources. The Department is authorized to expend monies from the Clean Energy Development Fund in accordance with this section. The Commissioner of the Department shall make all decisions necessary to implement this section and administer the Fund. The Department shall ensure an open public process in the administration of the Fund for the purposes established in this subchapter.

  (2) During fiscal years after FY 2006, up to five percent of amounts appropriated to the Department of Public Service from the Fund may be used for administrative costs related to the Clean Energy Development Fund.

  (3) The Department shall perform each of the following:

  (A) On or before January 15 of each year, provide to the Senate Committees on Finance and on Natural Resources and Energy and the House Committees on Commerce and Economic Development and on House Committee on Environment and Energy a report for the fiscal year ending the preceding June 30 detailing the activities undertaken, the revenues collected, and the expenditures made under this subchapter. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subdivision.

  (B) Develop a five-year strategic plan and an annual program plan, both of which shall be developed with input from a public stakeholder process and shall be consistent with State energy planning principles.

  (C) Develop an annual operating budget.

  (D) Develop proposed program designs to facilitate clean energy market and project development (including use of financial assistance, investments, competitive solicitations, technical assistance, and other incentive programs and strategies). Prior to any approval of a new program or of a substantial modification to a previously approved program of the Clean Energy Development Fund, the Department of Public Service shall publish online the proposed program or modification, shall provide an opportunity for public comment of no less than 30 days. For the purposes of this subdivision (D), “substantial modification” includes a change to a program’s application criteria or application deadlines and includes any change to a program if advance knowledge of the change could unfairly benefit one applicant over another applicant. For the purpose of 3 V.S.A. § 831(c) (initiating rulemaking on request), a new program or substantial modification of a previously approved program shall be treated as if it were an existing practice or procedure.

  (4) At least annually, the Commissioner or designee jointly shall hold a public meeting to review and discuss the status of the Fund; Fund projects; the performance of the Fund Manager; any reports, information, or inquiries submitted by the Fund Manager or the public; and any additional matters they deem necessary to fulfill the Commissioner’s obligations under this section.

  (f) Clean Energy Development Fund Manager. The Clean Energy Development Fund shall have a Fund Manager who shall be an employee of the Department of Public Service.

  [Subsection (g) effective until June 30, 2027; see subsection (g) effective June 30, 2027 set out below.]

  (g) Bonds. The Commissioner of Public Service, in consultation with the Clean Energy Development Board, may explore use of the Fund to establish one or more loan-loss reserve funds to back issuance of bonds by the State Treasurer otherwise authorized by law, including Clean Renewable Energy Bonds, that support the purposes of the Fund.

  [Subsection (g) effective June 30, 2027; see subsection (g) effective until June 30, 2027 set out above.]

  (g) Bonds. The Commissioner of Public Service may explore use of the Fund to establish one or more loan-loss reserve funds to back issuance of bonds by the State Treasurer otherwise authorized by law, including Clean Renewable Energy Bonds, that support the purposes of the Fund.

  [Subsection (h) effective until June 30, 2027; see subsection (h) effective June 30, 2027 set out below.]

  (h) ARRA funds. All American Recovery and Reinvestment Act (ARRA) funds described in section 8016 of this title shall be disbursed, administered, and accounted for in a manner that ensures rapid deployment of the funds and is consistent with all applicable requirements of ARRA, including requirements for administration of funds received and for timeliness, energy savings, matching, transparency, and accountability. These funds shall be expended for the following categories listed in this subsection, provided that no single project directly or indirectly receives a grant in more than one of these categories. After consultation with the Clean Energy Development Board, the Commissioner of Public Service shall have discretion to use non-ARRA monies within the fund to support all or a portion of these categories and shall direct any ARRA monies for which non-ARRA monies have been substituted to the support of other eligible projects, programs, or activities under ARRA and this section.

  (1) The Vermont Small-scale Renewable Energy Incentive Program currently administered by the Renewable Energy Resource Center, for use in residential and business installations. These funds may be used by the Program for all forms of renewable energy as defined by section 8002 of this title, including biomass and geothermal heating. The disbursement to this Program shall seek to promote continuous funding for as long as funds are available.

  (2) Grant and loan programs for renewable energy resources, including thermal resources such as district biomass heating that may not involve the generation of electricity.

  (3) Grants and loans to thermal energy efficiency incentive programs, community-scale renewable energy financing programs, certification and training for renewable energy workers, promotion of local biomass and geothermal heating, and an anemometer loan program.

  (4) $2 million for a public-serving institution efficiency and renewable energy program that may include grants and loans and create a revolving loan fund. In this subsection, “public-serving institution” means government buildings and nonprofit public and private universities, colleges, and hospitals. In this program, awards shall be made through a competitive bid process.

  (5) $2 million to the Vermont Housing and Conservation Board (VHCB) to make grants and deferred loans to nonprofit organizations for weatherization and renewable energy activities allowed by federal law, including assistance for nonprofit owners and occupants of permanently affordable housing.

  (6) $2 million to the Vermont Telecommunications Authority (VTA) to make grants of no more than $10,000.00 per turbine for installation of small-scale wind turbines and associated towers on which telecommunications equipment is to be collocated and which are developed in association with the VTA.

  (7) $880,000.00 to the 11 regional planning commissions ($80,000.00 to each such commission) to conduct energy efficiency and energy conservation activities that are eligible under the EECBG program.

  (8) Concerning the funds authorized for use in subdivisions (4)-(7) of this subsection:

  (A) To the extent permissible under ARRA, up to five percent may be spent for administration of the funds received.

  (B) In the event that the Commissioner of Public Service determines that a recipient of such funds has insufficient eligible projects, programs, or activities to fully utilize the authorized funds, then after consultation with the Clean Energy Development Board, the Commissioner shall have discretion to reallocate the balance to other eligible projects, programs, or activities under this section.

  (9) The Commissioner of Public Service is authorized, to the extent allowable under ARRA, to utilize up to 10 percent of ARRA funds received for the purpose of administration. The Commissioner shall allocate a portion of the amount utilized for administration to retain permanent, temporary, or limited service positions or contractors and the remaining portion to the oversight of specific projects receiving ARRA funding pursuant to section 6524 of this title.

  [Subsection (h) effective June 30, 2027; see subsection (h) effective until June 30, 2027 set out above.]

  (h) ARRA funds. All American Recovery and Reinvestment Act (ARRA) funds described in section 8016 of this title shall be disbursed, administered, and accounted for in a manner that ensures rapid deployment of the funds and is consistent with all applicable requirements of ARRA, including requirements for administration of funds received and for timeliness, energy savings, matching, transparency, and accountability. These funds shall be expended for the following categories listed in this subsection, provided that no single project directly or indirectly receives a grant in more than one of these categories. The Commissioner of Public Service shall have discretion to use non-ARRA monies within the fund to support all or a portion of these categories and shall direct any ARRA monies for which non-ARRA monies have been substituted to the support of other eligible projects, programs, or activities under ARRA and this section.

  (1) The Vermont Small Scale Renewable Energy Incentive Program currently administered by the Renewable Energy Resource Center, for use in residential and business installations. These funds may be used by the Program for all forms of renewable energy as defined by section 8002 of this title, including biomass and geothermal heating. The disbursement to this Program shall seek to promote continuous funding for as long as funds are available.

  (2) Grant and loan programs for renewable energy resources, including thermal resources such as district biomass heating that may not involve the generation of electricity.

  (3) Grants and loans to thermal energy efficiency incentive programs, community-scale renewable energy financing programs, certification and training for renewable energy workers, promotion of local biomass and geothermal heating, and an anemometer loan program.

  (4) $2 million for a public-serving institution efficiency and renewable energy program that may include grants and loans and create a revolving loan fund. As used in this subsection, “public-serving institution” means government buildings and nonprofit public and private universities, colleges, and hospitals. In this program, awards shall be made through a competitive bid process.

  (5) $2 million to the Vermont Housing and Conservation Board (VHCB) to make grants and deferred loans to nonprofit organizations for weatherization and renewable energy activities allowed by federal law, including assistance for nonprofit owners and occupants of permanently affordable housing.

  (6) [Repealed.]

  (7) $880,000.00 to the 11 regional planning commissions ($80,000.00 to each such commission) to conduct energy efficiency and energy conservation activities that are eligible under the EECBG program.

  (8) Concerning the funds authorized for use in subdivisions (4)-(7) of this subsection:

  (A) To the extent permissible under ARRA, up to five percent may be spent for administration of the funds received.

  (B) In the event that the Commissioner of Public Service determines that a recipient of such funds has insufficient eligible projects, programs, or activities to fully utilize the authorized funds, the Commissioner shall have discretion to reallocate the balance to other eligible projects, programs, or activities under this section.

  (9) The Commissioner of Public Service is authorized, to the extent allowable under ARRA, to utilize up to 10 percent of ARRA funds received for the purpose of administration. The Commissioner shall allocate a portion of the amount utilized for administration to retain permanent, temporary, or limited service positions or contractors and the remaining portion to the oversight of specific projects receiving ARRA funding pursuant to section 6524 of this title.

  [Subsection (i) effective until June 30, 2027; see subsection (i) effective June 30, 2027 set out below.]

  (i) Rules. The Department and the Clean Energy Development Board each may adopt rules pursuant to 3 V.S.A. chapter 25 to carry out its functions under this section and shall consult with each other either before or during the rulemaking process.

  [Subsection (i) effective June 30, 2027; see subsection (i) effective until June 30, 2027 set out above.]

  (i) Rules. The Department may adopt rules pursuant to 3 V.S.A. chapter 25 to carry out its functions under this section. (Added 2005, No. 74, § 2; amended 2005, No. 208 (Adj. Sess.), § 5; 2005, No. 215 (Adj. Sess.), § 280, eff. May 31, 2006; 2007, No. 65, § 94a; 2007, No. 92 (Adj. Sess.), § 7; 2009, No. 45, §§ 5, 9e, eff. May 27, 2009; 2009, No. 54, § 93, eff. June 1, 2009; 2009, No. 1 (Sp. Sess.), § E.235.3, eff. June 2, 2009; 2009, No. 2 (Sp. Sess.), § 4, eff. June 1, 2009; 2009, No. 3 (Sp. Sess.), § 13, eff. June 10, 2009; 2009, No. 67 (Adj. Sess.), § 68, eff. Feb. 25, 2010; 2009, No. 67 (Adj. Sess.), § 103; 2009, No. 159 (Adj. Sess.), § 18a; 2011, No. 47, § 20j, eff. July 9, 2011, except subdivs. (d)(3) and (4) and (e)(3) and (4) eff. May 25, 2011; 2013, No. 89, § 15; 2013, No. 95 (Adj. Sess.), § 82a, eff. Feb. 25, 2014; 2013, No. 142 (Adj. Sess.), § 53; 2015, No. 56, § 13; 2017, No. 53, § 23, eff. May 30, 2017; 2017, No. 113 (Adj. Sess.), § 175b; 2023, No. 53, § 137, eff. June 30, 2027.)

• § 8015. Vermont Clean Energy Development Fund [Effective June 30, 2027]

  (a) Creation of Fund.

  (1) There is established the Vermont Clean Energy Development Fund to consist of each of the following:

  (A) The proceeds due the State under the terms of the memorandum of understanding between the Department of Public Service and Entergy Nuclear VY and Entergy Nuclear Operations, Inc. that was entered under Public Service Board docket 6812, together with the proceeds due the State under the terms of any subsequent memoranda of understanding entered before July 1, 2005 between the Department of Public Service and Entergy Nuclear VY and Entergy Nuclear Operations, Inc.

  (B) Any other monies that may be appropriated to or deposited into the Fund.

  (2) Balances in the Fund shall be expended solely for the purposes set forth in this subchapter and shall not be used for the general obligations of government. All balances in the Fund at the end of any fiscal year shall be carried forward and remain part of the Fund. Interest earned by the Fund shall be deposited in the Fund. This Fund is established in the State Treasury pursuant to 32 V.S.A. chapter 7, subchapter 5.

  (b) Definitions. As used in this section, the following definitions shall apply:

  (1) “Clean energy resources” means electric power supply and demand-side resources, or thermal energy or geothermal resources, that are “combined heat and power facilities,” “cost-effective energy efficiency resources,” or “renewable energy” resources.

  (2) “Combined heat and power (CHP) facility” means a generator that sequentially produces both electric power and thermal energy from a single source or fuel. In order for a fossil fuel-based CHP system to participate in the clean energy program set out in this section, at least 20 percent of its fuel’s total recovered energy must be thermal and at least 13 percent must be electric, the design system efficiency (the sum of full load design thermal output and electric output divided by the heat input) must be at least 65 percent, and it must meet air quality standards established by the Agency of Natural Resources.

  (3) “Cost-effective energy efficiency” means those energy efficiency and conservation measures that would qualify as part of a utility’s least-cost integrated plan under section 218c of this title or that would be an eligible expenditure under subsection 209(d) of this title.

  (4) “Emerging energy-efficient technologies” means technologies that are both precommercial but near commercialization and that have already entered the market but have less than five percent of current market share; that use less energy than existing technologies and practices to produce the same product or otherwise conserve energy and resources, regardless of whether or not they are connected to the grid; and that have additional non-energy benefits such as reduced environmental impact, improved productivity and worker safety, or reduced capital costs.

  (5) “Renewable energy” has the meaning established under section 8002 of this title and shall include the following: solar photovoltaic and solar thermal energy; wind energy; geothermal heat pumps; farm, landfill, and sewer methane recovery; low emission, advanced biomass power, and combined heat and power technologies using biomass fuels such as wood, agricultural or food wastes, energy crops, and organic refuse-derived waste, but not municipal solid waste; advanced biomass heating technologies and technologies using biomass-derived fluid fuels such as biodiesel, bio-oil, and bio-gas.

  (6) “Energy storage” means a system that uses mechanical, chemical, or thermal processes to store energy for later use.

  (c) Purposes of Fund. The purposes of the Fund shall be to promote the development and deployment of cost-effective and environmentally sustainable electric power and thermal energy or geothermal resources for the long-term benefit of Vermont consumers, primarily with respect to renewable energy resources, and the use of combined heat and power technologies. The Fund also may be used to support natural gas and electric vehicles in accordance with subdivisions (d)(1)(K) and (L) of this section, respectively. The General Assembly expects and intends that the Public Utility Commission, Department of Public Service, and the State’s power and efficiency utilities will actively implement the authority granted in this title to acquire all reasonably available cost-effective energy efficiency resources for the benefit of Vermont ratepayers and the power system.

  (d) Expenditures authorized.

  (1) Projects for funding may include the following:

  (A) projects that will sell power in commercial quantities;

  (B) among those projects that will sell power in commercial quantities, funding priority will be given to those projects that commit to sell power to Vermont utilities on favorable terms;

  (C) projects to benefit publicly owned or leased buildings;

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

  (E) small-scale renewable energy in Vermont residences, institutions, and businesses:

  (i) generally; and

  (ii) through the Small-scale Renewable Energy Incentive Program;

  (F) projects under the agricultural economic development special account established under 6 V.S.A. § 4710(g) to harvest biomass, convert biomass to energy, or produce biofuel;

  (G) until December 31, 2008 only, super-efficient buildings;

  (H) projects to develop and use thermal or geothermal energy, regardless of whether they also involve the generation of electricity;

  (I) emerging energy-efficient technologies;

  (J) effective projects that are not likely to be established in the absence of funding under the program;

  (K) natural gas vehicles and associated fueling infrastructure if each such vehicle is dedicated only to natural gas fuel and, on a life cycle basis, the vehicle’s emissions will be lower than those of commercially available vehicles using other fossil fuel, and any such infrastructure will deliver gas without interruption of flow;

  (L) electric vehicles and associated charging stations;

  (M) energy storage projects that facilitate utilization of renewable energy resources.

  (2) If during a particular year, the Commissioner of Public Service determines that there is a lack of high value projects eligible for funding, as identified in the five-year plan, or as otherwise identified, the Commissioner shall consider transferring funds to the Energy Efficiency Fund established under the provisions of subsection 209(d) of this title. Such a transfer may take place only in response to an opportunity for a particularly cost-effective investment in energy efficiency, and only as a temporary supplement to funds collected under that subsection, not as replacement funding.

  (3) Notwithstanding any contrary provision of this section, the Clean Energy Development Fund shall use all of the monies from alternative compliance payments under sections 8004 and 8005 of this title for projects that meet the definition of “energy transformation project” under section 8002 of this title and the eligibility criteria for those projects under section 8005 of this title. The Fund shall implement projects in the service territory of the retail electricity provider or providers making the alternative compliance payments used to support the projects and, in the case of a project delivered in more than one territory, shall prorate service delivery according to each provider’s contribution. A provider shall not count, toward its required amount under the energy transformation category of section 8005 of this title, support provided by the Fund for an energy transformation project.

  (e) Management of Fund.

  (1) This Fund shall be administered by the Department of Public Service to facilitate the development and implementation of clean energy resources. The Department is authorized to expend monies from the Clean Energy Development Fund in accordance with this section. The Commissioner of the Department shall make all decisions necessary to implement this section and administer the Fund. The Department shall ensure an open public process in the administration of the Fund for the purposes established in this subchapter.

  (2) During fiscal years after FY 2006, up to five percent of amounts appropriated to the Department of Public Service from the Fund may be used for administrative costs related to the Clean Energy Development Fund.

  (3) The Department shall perform each of the following:

  (A) On or before January 15 of each year, provide to the Senate Committees on Finance and on Natural Resources and Energy and the House Committees on Commerce and Economic Development and on Energy and Technology a report for the fiscal year ending the preceding June 30 detailing the activities undertaken, the revenues collected, and the expenditures made under this subchapter. The provisions of 2 V.S.A. § 20(d) (expiration of required reports) shall not apply to the report to be made under this subdivision.

  (B) Develop a five-year strategic plan and an annual program plan, both of which shall be developed with input from a public stakeholder process and shall be consistent with State energy planning principles.

  (C) Develop an annual operating budget.

  (D) Develop proposed program designs to facilitate clean energy market and project development (including use of financial assistance, investments, competitive solicitations, technical assistance, and other incentive programs and strategies). Prior to any approval of a new program or of a substantial modification to a previously approved program of the Clean Energy Development Fund, the Department of Public Service shall publish online the proposed program or modification, shall provide an opportunity for public comment of no less than 30 days. For the purposes of this subdivision (D), “substantial modification” includes a change to a program’s application criteria or application deadlines and includes any change to a program if advance knowledge of the change could unfairly benefit one applicant over another applicant. For the purpose of 3 V.S.A. § 831(c) initiating rulemaking on request), a new program or substantial modification of a previously approved program shall be treated as if it were an existing practice or procedure.

  (4) At least annually, the Commissioner or designee jointly shall hold a public meeting to review and discuss the status of the Fund; Fund projects; the performance of the Fund Manager; any reports, information, or inquiries submitted by the Fund manager or the public; and any additional matters they deem necessary to fulfill the Commissioner’s obligations under this section.

  (f) Clean Energy Development Fund Manager. The Clean Energy Development Fund shall have a Fund Manager who shall be an employee of the Department of Public Service.

  (g) Bonds. Bonds. The Commissioner of Public Service may explore use of the Fund to establish one or more loan-loss reserve funds to back issuance of bonds by the State Treasurer otherwise authorized by law, including Clean Renewable Energy Bonds, that support the purposes of the Fund.

  (h) ARRA funds. ARRA funds. All American Recovery and Reinvestment Act (ARRA) funds described in section 8016 of this title shall be disbursed, administered, and accounted for in a manner that ensures rapid deployment of the funds and is consistent with all applicable requirements of ARRA, including requirements for administration of funds received and for timeliness, energy savings, matching, transparency, and accountability. These funds shall be expended for the following categories listed in this subsection, provided that no single project directly or indirectly receives a grant in more than one of these categories. The Commissioner of Public Service shall have discretion to use non-ARRA monies within the fund to support all or a portion of these categories and shall direct any ARRA monies for which non-ARRA monies have been substituted to the support of other eligible projects, programs, or activities under ARRA and this section.

  (1) The Vermont Small Scale Renewable Energy Incentive Program currently administered by the Renewable Energy Resource Center, for use in residential and business installations. These funds may be used by the Program for all forms of renewable energy as defined by section 8002 of this title, including biomass and geothermal heating. The disbursement to this Program shall seek to promote continuous funding for as long as funds are available.

  (2) Grant and loan programs for renewable energy resources, including thermal resources such as district biomass heating that may not involve the generation of electricity.

  (3) Grants and loans to thermal energy efficiency incentive programs, community-scale renewable energy financing programs, certification and training for renewable energy workers, promotion of local biomass and geothermal heating, and an anemometer loan program.

  (4) $2 million for a public-serving institution efficiency and renewable energy program that may include grants and loans and create a revolving loan fund. As used in this subsection, “public-serving institution” means government buildings and nonprofit public and private universities, colleges, and hospitals. In this program, awards shall be made through a competitive bid process.

  (5) $2 million to the Vermont Housing and Conservation Board (VHCB) to make grants and deferred loans to nonprofit organizations for weatherization and renewable energy activities allowed by federal law, including assistance for nonprofit owners and occupants of permanently affordable housing.

  (6) [Repealed.]

  (7) $880,000.00 to the 11 regional planning commissions ($80,000.00 to each such commission) to conduct energy efficiency and energy conservation activities that are eligible under the EECBG program.

  (8) Concerning the funds authorized for use in subdivisions (4)-(7) of this subsection:

  (A) To the extent permissible under ARRA, up to five percent may be spent for administration of the funds received.

  (B) In the event that the Commissioner of Public Service determines that a recipient of such funds has insufficient eligible projects, programs, or activities to fully utilize the authorized funds, the Commissioner shall have discretion to reallocate the balance to other eligible projects, programs, or activities under this section.

  (9) The Commissioner of Public Service is authorized, to the extent allowable under ARRA, to utilize up to 10 percent of ARRA funds received for the purpose of administration. The Commissioner shall allocate a portion of the amount utilized for administration to retain permanent, temporary, or limited service positions or contractors and the remaining portion to the oversight of specific projects receiving ARRA funding pursuant to section 6524 of this title.

  (i) Rules. Rules. The Department may adopt rules pursuant to 3 V.S.A. chapter 25 to carry out its functions under this section. (Added 2005, No. 74, § 2; amended 2005, No. 208 (Adj. Sess.), § 5; 2005, No. 215 (Adj. Sess.), § 280, eff. May 31, 2006; 2007, No. 65, § 94a; 2007, No. 92 (Adj. Sess.), § 7; 2009, No. 45, §§ 5, 9e, eff. May 27, 2009; 2009, No. 54, § 93, eff. June 1, 2009; 2009, No. 1 (Sp. Sess.), § E.235.3, eff. June 2, 2009; 2009, No. 2 (Sp. Sess.), § 4, eff. June 1, 2009; 2009, No. 3 (Sp. Sess.), § 13, eff. June 10, 2009; 2009, No. 67 (Adj. Sess.), § 68, eff. Feb. 25, 2010; 2009, No. 67 (Adj. Sess.), § 103; 2009, No. 159 (Adj. Sess.), § 18a; 2011, No. 47, § 20j, eff. July 9, 2011, except subdivs. (d)(3) and (4) and (e)(3) and (4) eff. May 25, 2011; 2013, No. 89, § 15; 2013, No. 95 (Adj. Sess.), § 82a, eff. Feb. 25, 2014; 2013, No. 142 (Adj. Sess.), § 53; 2015, No. 56, § 13; 2017, No. 53, § 23, eff. May 30, 2017; 2017, No. 113 (Adj. Sess.), § 175b; 2023, No. 53, § 137, eff. June 30, 2027.)

• § 8016. ARRA energy monies

  The expenditure of each of the following shall be subject to the direction and approval of the Commissioner of Public Service, after consultation with the Clean Energy Development Board established under subdivision 8015(e)(4) of this title, and shall be made in accordance with subdivisions 8015(d)(1) (expenditures authorized), and (e)(7)(A) (reporting) and subsections 8015(f) (Fund manager), (h) (ARRA funds), and (i) (rules) of this title and applicable federal law and regulations:

  (1) The amount of $21,999,000.00 in funds received by the State under the appropriation contained in the American Recovery and Reinvestment Act (ARRA) of 2009, Pub.L. No. 111-5, to the State Energy Program authorized under 42 U.S.C. § 6321 et seq.

  (2) The amount of $9,593,500.00 received by the State under ARRA from the U.S. Department of Energy through the Energy Efficiency and Conservation Block Grant Program. (Added 2009, No. 67 (Adj. Sess.); § 69; amended 2011, No. 47, § 20l, eff. July 9, 2011.)