Sustainably Priced Energy Enterprise Development (SPEED) Goals

Summary

Note: H.B. 40, signed by Vermont Governor Peter Shumlin on June 11, 2015, repeals the SPEED goals effective July 1, 2015. This bill also creates a mandatory renewable energy standard, which also becomes effective July 1, 2015.

Background

Vermont's Sustainably Priced Energy Enterprise Development (SPEED) Program was created by legislation in 2005 to promote renewable energy development. The SPEED program itself is not a renewable portfolio goal or standard. However, if the Vermont Public Service Board (PSB) determines that the established minimum obligations of the SPEED program (described below) are not met, then the state's utilities would be required to meet a binding renewable energy portfolio standard (RPS), as established by law (30 V.S.A. § 8004).

The intent of the SPEED program is to promote renewable energy development by encouraging long-term contracts for electricity from renewable sources. Legislation enacted in March 2008 (S.B. 209) established a goal* that 20% of total statewide electric retail sales during 2017 be generated by new SPEED resources.** Unlike most states in the Northeast, this program does not require utilities to procure the attributes; the renewable energy generators are free to sell their renewable energy credits (RECs) in other markets (e.g. other states’ RPS markets or voluntary green power programs). Utilities are expected to enter into long-term power purchase agreements (PPAs) for electricity with renewable energy generators certified as SPEED projects by the PSB, or to develop those SPEED projects themselves. A SPEED facilitator has been contracted to support this procurement process and match renewable energy generators (SPEED projects) with utilities looking to procure electricity. Furthermore, legislation passed in 2009 established a pilot feed-in tariff to support the development of these projects.

Eligibility

To qualify as a SPEED project, the facility must be located in Vermont and must produce energy using renewables or qualifying combined heat and power. SPEED projects must apply for and be granted a "Certificate of Public Good". Legislation passed in June 2010 simplifies this process for projects 150 kW and less, conforming to the "Certificate of Public Good for Net Metered Systems". 

In some situations, contracts with out-of-state renewable generation facilities qualify toward meeting the goals for SPEED resources.*** There are provisions for qualifying existing facilities that have been upgraded or expanded as well. Eligible renewable energy resources include hydroelectric (up to 200 MW, no capacity limit starting July 1, 2012), methane (from landfill gas, anaerobic digesters, sewage-treatment facilities, and farms), geothermal, solar, and wind -- as well as combined heat and power facilities or fuel cells that rely on one of the above mentioned fuel sources. Solid waste is explicitly excluded. The PSB is authorized to determine which, if any, additional renewable resources qualify.

By law, the PSB is required to determine the total amount of SPEED resources that supply (or are certified to supply) Vermont retail electricity providers by January 1, 2013. The SPEED program will be deemed successful if one of the following two obligations is met:

• The amount of qualifying SPEED resources that came into service (or were issued a certificate) between January 1, 2005, and July 1, 2012, is equal to (or greater than) total statewide growth in retail electric sales during that same time period and at least 5% of the 2005 total retail electric sales in the state are provided by qualified SPEED resources; or
• The amount of qualifying SPEED resources equals or exceeds 10% of the retail electric sales in 2005 for the state of Vermont.

If neither criterion is met, then the RPS will become mandatory and will require the state's electric utilities to meet any increase in statewide retail electricity sales between 2005 and 2012 by using renewables with associated attributes, by purchasing RECs, or by making an alternative compliance payment to the Vermont Clean Energy Development Fund. The PSB issued its first report on the "Progress Towards SPEED Goals" in January 2012, and concluded that the state is making "adequate progress" towards meeting the goal of 20% by 2017.

In addition to the SPEED Resources goal (20% by 2017), legislation S.B. 214 (Act 170) passed in 2012 established the "Total Renewables Targets." These targets address the specific supply portfolios of each retail electricity provider. In 2017, renewable energy should make up 55% of each retail electricity provider's annual electric sales and in 2032, renewable energy should make up 75% of each retail electricity provider's annual electric sales (between 2017 and 2032, there should be a 4%  increase to the percentage every third year).

Legislation enacted in 2011 (Act 47) added a new section to Vermont's Renewable Energy Programs statutes, the Baseload Renewable Power Portfolio Requirement. This requirement is separate and distinct from the RPS goals described above and it requires that electricity supplied to customers must contain a portion of "baseload renewable power". This is defined as power from a wood biomass plant in Vermont with nominal capacity of 20.5 MW. The Speed Facilitator will buy the power and distribute the electricity, any renewable energy attributes, and associated costs to the state's retail electricity providers. The price paid (avoided cost) by the retail electricity providers to the plant for baseload renewable power is to be determined via PSB proceeding.

Legislation enacted in 2010 (Act 159) required the PSB to consider changing Vermont's renewable portfolio goal and SPEED program to a full-fledged renewable portfolio standard. The PSB report "Study on Renewable Electricity Requirements" was completed in October 2011 as required by law.  Also during 2011, the Vermont Comprehensive Energy Plan was updated. For more information on the plan, see Vermont Department of Public Service Comprehensive Energy Plan. Legislation enacted in 2012 (Act 170) amended Vermont's renewable portfolio goal and requires the PSB to study further whether and how to establish a renewable portfolio standard. This report is due by January 15, 2013.

* A renewable portfolio goal generally is not legally binding, as opposed to a renewable portfolio standard, which is legally binding.

** New renewable energy means a specific renewable energy plant that has come into service after December 31, 2004.

*** The statute provides that electricity produced by a new renewable energy facility that is owned by or under long-term contract with a Vermont retail electricity provider outside of Vermont may be considered.