The birth of an industry

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How the renewable energy movement led to the creation of net metering

When Vermont’s legislature created the state’s net metering program in 1999, said former Board President Barry Bernstein, WEC was a strong supporter. “The intent of the net metering program was to support and encourage a fledgling industry so they could get their feet on the ground,” he explained.

Vermont’s history of net metering is also a story of the state’s environmental leadership: for context, there was not then, and is not now, a federal net metering standard. In the late nineties, at WEC and elsewhere, environmental awareness around power use was starting to shift focus from a conservation mindset to recognizing how much oil, gas, coal, and other fossil fuels contribute to an impending climate catastrophe. Conserving energy was important; even more important was to reduce fossil fuel sources of power. But in order to change the system effectively, that had to be done affordably.

Tony Klein is a WEC member and former Chair of the House Committee on Natural Resources and Energy. During the late 00s and 10s, Klein worked to shift Vermont’s power grid to renewable energy. “Little by little, we passed legislation that mandated purchase of renewables,” he explained. “The balancing act was price sensitivity.”

But at the time, there were few renewable generation projects in the state. In-state renewable generation development launched with the creation of the Standard Offer program in 2009, which requires Vermont distribution utilities to buy renewable power from eligible generation projects. Developers are guaranteed a specified price for a specified period of time, and costs are “distributed among Vermont utilities based on their pro-rata share of electric sales” per the Public Utility Commission.

It blossomed, which it was supposed to. It was a success.

Tony Klein

While the Standard Offer program created both generation and market for renewable power at the wholesale level, Klein said, he was looking for more opportunities to add renewables to the state grid. In conversation with Mary Powell, the former CEO of Green Mountain Power (GMP), he learned that GMP is a summer-peaking utility – and solar panels generate more power during summer’s long days. Powell told Klein that individual GMP customers with solar were so valuable for shaving summer peak costs that GMP offered them a six-cent premium to purchase their onsite-generated power.

That was a “lightbulb moment,” said Klein, and in 2014, the legislature passed Act 99, updating the state’s net metering rules to require utilities to offer a premium for onsite net metering. “That was the birth of the growth of the solar industry in the state,” said Klein. “It blossomed, which it was supposed to. It was a success.”

And, he added, at the time, the profile of a typical net meterer was a customer “who didn’t use a lot of electricity. That’s what it was. That’s what it still should be.”