MONTPELIER -- Vermont regulators have ordered the Washington Electric Co-operative to suspend a program that allows homeowners to work their electric bills down to zero by installing solar, wind or other renewable energy projects that send power back to their utility’s grid, saying the small utility is violating state law.

The East Montpelier-based co-op announced in October that it was limiting net-metering projects to 5 kilowatts because it had exceeded a state cap that only allows it to get 4 percent of its peak demand from such projects.

The program has proven popular, with Vermont’s net metered power generation more than tripling since early 2011.

Some utilities have complained that pushing monthly bills down to zero allows customers to avoid paying their share of basic system costs like utility management and line repairs.

But Chris Recchia, commissioner of the Vermont Public Service Department, argued in an interview that utilities are benefiting significantly from net metering even without levying a service charge to net-metered customers. The Vermont Electric Power Co., which operates the state’s high-power transmission backbone, has deferred millions of dollars in system upgrades because of individual customers contributing power along the grid through net metering, Recchia said.

"It’s clearly a beneficial program to the utilities and to the grid and it’s what the customers want," Recchia said.

Recchia’s department opposed the co-op’s move in October to limit the size of new net metering systems to 5 kilowatts of output, saying state law caps individual systems at 500 kilowatts. It said the board lacked the authority under the law to approve such a change.

Of the difference, Recchia said a 5 kilowatt solar installation might be placed on a rooftop and serve a single home; a 500-kilowatt system might be an array of solar panels spread out over about 2 acres and would be shared by a group of utility customers.

WEC filed papers with the Public Service Board describing the proposed change in October. But this week, the board said the 5-kilowatt cap appears to violate state law. It suspended the program that WEC had described and said it would investigate the matter.

"They’re questioning the legal authority to change the program," said Patty Richards, the co-op’s general manager.

She added in a statement: "WEC is a fully regulated utility, and therefore, WEC must obtain permission from its regulators to exceed the net metering cap and to make any changes to the program even if temporary. The suspension in our recommended plan means WEC must stop accepting net metering applications."

Both Richards and Recchia said they expected the suspension of new projects would be temporary. The program is expected to resume after the Legislature makes expected changes to the net metering law after it returns in January.