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Vermont to Offer Net Metering Compensation Based on Siting, Capacity

April 12, 2016 By Cheryl Kaften

The Vermont Public Service Board (PSB) has drafted a proposal that would change the rules for siting, construction, ownership, and operation of newly installed net-metering systems by any person, firm, company, corporation, or municipality statewide.

Net metering systems enable owner-operators to generate power for themselves – usually solar or wind – and sell the excess back to the utility at a competitive price.

According to the local Brattleboro Reformer, this new filing has been made in response to Act 99 of 2014, which directed the PSB to create regulations by January 1, 2017, for all prospective net-metering systems.

Under the proposal, three types of net-metering systems –Category 1, with a capacity of 15 kilowatts (kW) or less; Category 2, from 15 kW up to 150 kW; and Category 3, from 150 kW up to 500 kW – will receive favored pricing if they install on sites in preferred locations.

Currently, systems over 15 kW receive the same payment for electricity fed back into the grid, regardless of siting. Now, pricing levels for categories 1-3 will vary, depending upon whether they are sited on a:

  • New or existing structure, where the primary purpose of such structure is not the generation of electricity;
  • Previously developed site that is not agricultural or a wildlife habitat;
  • Brownfield;
  • Landfill or former leach field; or
  • Locally preferred” site. Applicants seeking to receive this classification must demonstrate that the net-metering system will be located on a site specifically designated by the host municipality for the development of distributed electric generation facilities and that the net metering system will meet any development criteria recommended by the host municipality for that site.

In addition, a system may receive special pricing if developers can prove that the on-site operator is the “primary offtaker.” Applicants seeking to receive this classification must demonstrate that more than 50 percent of the net-metering system’s electrical output is allocated to a customer on the same or a contiguous parcel of land as the net metering system. This allocation must exceed 50 percent during each of the first ten years following project commissioning.

The filing also provides for three more categories with the same capacity as the original groupings, but which do not fulfill the siting requirements or receive favored pricing.

Finally, net metering operators whose plants installed on or before December 31, 2016 will be grandfathered for 20 years.

The PCB will hold two hearings on the proposed changes next month, and written comments are due on May 12.

According to the Brattleboro Reformer, on March 7, the PSB released new draft rules for net metering and installation for small electrical generation projects. The changes would require utilities to credit system owners for excess energy exported to the grid from distributed generation at the tariff for general residential service or a blended version of varying tariffs. The renewable energy credits for the generation may go to the utilities.

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