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In re Investigation into Programmatic Adjustments to the Standard-Offer Program

Supreme Court of Vermont

May 11, 2018

In re Investigation into Programmatic Adjustments to the Standard-Offer Program (Renewable Energy Vermont, Appellant)

          On Appeal from Public Utility Commission James Volz, Chair

          Kimberly K. Hayden of Paul Frank Collins P.C., Burlington, for Appellant.

          Jeanne Elias, Special Counsel, Montpelier, for Appellee Department of Public Service.

          PRESENT: Reiber, C.J., Skoglund, Robinson, Eaton and Carroll, JJ.

          REIBER, C.J.

         ¶ 1. Appellant Renewable Energy Vermont (REV) asks this Court to reverse and remand an order of the Vermont Public Utility Commission[1] that altered technology allocations in the standard-offer program for renewable energy projects. We conclude that REV seeks an advisory opinion and therefore dismiss the appeal for lack of jurisdiction.

         ¶ 2. The standard-offer program was established by the Legislature in 2005 as part of an effort to promote development of renewable energy in Vermont. See 30 V.S.A. §§ 8001, 8005, 8005a. The standard-offer statute directs the Commission to authorize "long-term power-purchase contracts with electrical providers in Vermont for renewable energy projects that have a nameplate capacity of 2.2 megawatts (MW) or less and meet certain other criteria." In re Programmatic Changes to the Standard-Offer Program, 2014 VT 29, ¶ 2, 196 Vt. 175, 95 A.3d 999 (citing 30 V.S.A. § 8005a(b)). "Once a plant owner executes a standard-offer contract, the [Commission] guarantees a set price for that plant's energy for the duration of the contract regardless of whether the market price changes." Id. (citing 30 V.S.A. § 8005a(f)(4)). Vermont electric utilities are then required to purchase the electricity generated by these projects at that price. 30 V.S.A. § 8005a(k)(2).

         ¶ 3. The standard-offer program has a cumulative plant capacity of 127.5 MW, a portion of which is made available to new projects each year. Id. § 8005a(c). For 2017, the available new capacity was 7.5 MW. Id. § 8005a(c)(1)(A). This was increased to 8.625 MW due to unsubscribed capacity from 2016. A portion of each year's capacity, known as the "provider block, " is reserved for new plants proposed by Vermont retail electricity providers. Id. § 8005a(c)(1)(B). The remaining capacity-the "developer block"-is reserved for independent developers. Id. The Commission is required to allocate the cumulative 127.5 MW capacity among the following designated categories of renewable energy technologies: solar power; wind power with a plant capacity of 100 kW or less (referred to by the Commission as "small wind"); wind power with a plant capacity greater than 100 kW (referred to as "large wind"); landfill methane; hydroelectric power; and biomass power. Id. § 8005a(c)(2). This requirement furthers the stated legislative goal of "[p]romoting the inclusion, in Vermont's electric supply portfolio, of renewable energy plants that are diverse in plant capacity and type of renewable energy technology." Id. § 8001(a)(8).

         ¶ 4. The Commission solicits bids for qualifying projects through an annual request-for- proposal (RFP) process. Prior to issuing the annual RFP, the Commission determines the maximum price that utilities will be required to pay for electricity generated by new projects in each category of renewable technology, "with a goal of ensuring timely development at the lowest feasible cost." Id. § 8005a(f). These price caps operate as a ceiling for bids. Id.

         ¶ 5. In 2016, the Department of Public Service observed that solar projects were on track to fill three-quarters or more of the cumulative capacity if the RFP process was not modified. To address this disparity, the Commission issued an order in February 2016 that set aside a "technology diversity developer block" that would be allocated on an equal basis to each of the non-solar technology categories. Only projects using the designated technology would be permitted to bid for the set-aside capacity for that technology. The remaining capacity in the developer block would be available to projects in any technology category and would be awarded based solely on bid price. This was called the "price-competitive developer block." The Commission ordered that the new allocation arrangement was to remain in effect for the remainder of the standard-offer program, unless changed by a subsequent order.

         ¶ 6. After the Commission issued its 2016 order, the Legislature passed Act 174, which created a temporary pilot program for standard-offer projects located at "preferred locations."[2]2015, No. 174 (Adj. Sess.), § 12a (effective July 1, 2016) (codified at 30 V.S.A. § 8005a(c)(1)(D)). Act 174 required that for one year beginning on January 1, 2017, the Commission was to allocate one-third of the annual capacity increase to these projects. Id. In September 2016, the Commission announced that due to Act 174, it planned to revisit the allocations set forth in its February 2016 order as part of its annual price review.

         ¶ 7. The Commission convened a workshop in October 2016 to discuss the preferred location pilot program, price caps, and technology allocations. Following the workshop, comments were filed by various utilities, developers, and other stakeholders, including REV. REV, which is a trade organization made up of businesses, nonprofits, and utilities committed to promoting renewable energy and energy efficiency in Vermont, recommended that the Commission maintain the technology diversity developer block established in the February 2016 order.

         ¶ 8. In an order entered on March 2, 2017, the Board set technology allocations and price caps for the 2017 RFP. The Board ordered that one-third of the 8.625 MW capacity for 2017 be allocated to projects located at preferred locations under the pilot program, as required by Act 174. Fifteen percent of the annual capacity was allocated to the provider block pursuant to 30 V.S.A. § 8005a(c)(1)(B)(i). The Commission ordered that 2.2 MW be made available to the price-competitive developer block for projects of any technology category. The remaining 2.69 MW in developer block capacity was allocated equally to "each non-solar technology category with an avoided-cost price cap greater than the solar price cap." For 2017, this meant the capacity was allocated to small wind and food waste anaerobic digestion projects. The order stated that this arrangement would continue in 2018 and succeeding years.[3] In effect, the order eliminated the capacity set-asides for large wind, landfill gas, biomass, and hydroelectric power for 2017, and instead required projects using those technologies to bid in the price-competitive developer block along with solar projects in the 2017 RFP process.

         ¶ 9. On March 16, 2017, REV moved to alter or amend the order. REV argued that the elimination of capacity set-asides for all technology categories other than small wind and food waste anaerobic digestion violated the Commission's prior orders and 30 V.S.A. § 8005a. It asserted that the order would exacerbate the existing lack of technology diversity in the standard- offer ...

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