Electricity supplier won't buy Vermont renewable energy credits
MONTPELIER -- One of the nation's top renewable power suppliers said it will no longer trade Vermont's renewable energy credits, which are also counted toward the state's clean electricity goals.
NextEra Energy announced last week that it will no longer take double-counted power in a letter to New England renewable energy credit brokers. The $15 billion North American company purchases and sells renewable energy credits (RECs).
"It is a fundamental principle of all renewable energy market sales that the environmental characteristics associated with the electric energy generated cannot be counted or claimed twice," NextEra Energy officials wrote.
Renewable power producers can sell RECs to other companies to meet state renewable energy standards. Vermont utilities often sell credits for renewable power generated in the state to out-of-state power suppliers. Under Vermont's clean energy development incentive program, this renewable power also counts toward the state's clean energy target.
On Jan. 1, Connecticut banned the purchase of Vermont credits that are also used to meet the state's renewable energy target. As a result, NextEra, which provides electricity in Connecticut, will no longer trade Vermont RECs in Connecticut.
Critics of Vermont's program say the state is claiming renewable energy credits that are sold to other states.
"The Connecticut Legislature did this because they knew that Vermont was trying to create the perception of being green without paying the full price of being green," said Kevin Jones, deputy director of the Institute for Energy and the Environment at Vermont Law School.
He said Vermont is selling its renewable energy to other states while importing fossil fuel-generated electricity. By claiming those credits to meet Vermont's renewable energy targets, Jones said, companies could be liable to pay penalties for purchasing fraudulent credits.
Darren Springer, deputy commissioner of the Vermont Department of Public Service, said NextEra's announcement will not slow renewable energy development in the state.
"There's going to be a value to the renewable energy credit regardless," Springer said. "It doesn't necessarily signal a broader market issue at this point."
RECs currently sell on the market for about 6 cents per kilowatt-hour. Springer said the sale of RECs reduces rates by about 5 percent.
The state's largest utility, Green Mountain Power, has sold $22 million in RECs to date, a company spokesperson said. The state also counts this renewable power generation toward the statewide renewable energy targets.
"This basically seems like blatant fraud to me," said Ben Luce, a Lyndon State College professor who last year unsuccessfully lobbied lawmakers to revise the program.
"The net effect of this is it gives Vermonters a false impression of how much renewable power costs," he said.
Luce is an outspoken opponent of Green Mountain Power's Lowell Mountain wind project. Lowell voters have voted twice to support it, but he said residents may be hesitant to back a project that produces renewable power legally credited to other states.
He said the statement from NextEra, a key industry player, could force Vermont to reconsider its renewable energy incentive program.
"It could finally expose this whole thing," he said. "It could bring about pressure to have a renewable energy standard."
The state operates under what is called the SPEED program, which is designed to move the state toward generating 20 percent of its power from renewable energy by 2017 by providing developers incentives for their projects.
Vermont is the only state in the nation that sells RECs and counts the power towards its renewable energy target, Jones said.
The Department of Public Service will report back to lawmakers next year on the environmental and economic benefits of adopting a renewable energy portfolio standard. Unlike Vermont's current voluntary program, an RPS would require Vermont to sell or keep renewable energy credits.
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