As of November 2022, 36 states and the District of Columbia have established an RPS or a renewable energy goal. Vermont established its RES in 2005 as a voluntary target and updated it in 2015 to become a standard. The RES mandates that electric power be sourced increasingly from renewable sources.  Additionally, it requires utilities to reduce fossil fuel use by customers. This standard has encouraged utilities to focus on long-term power purchasing contracts, contributing to Vermont’s low electric rates compared to other New England states.

H.289 , titled “An act relating to the Renewable Energy Standard,” updates the RES to align with current trends in electrification, volatile fossil fuel markets, and the impacts of climate change on the grid. It adds flexibility for different types of utilities operating in Vermont. Act 33 of 2023 established a Legislative Working Group on Renewable Energy Standard Reform to draft legislation for consideration during the 2024 Legislative session. This group, supported by utilities, environmental advocates, and the renewable industry, developed a consensus proposal tailored to each utility’s needs. The proposal prioritizes affordability, reliability, and carbon emission reduction, enhancing resilience through increased distributed renewable generation and new offsets for old net metering renewables.

H.289 updates renewable energy requirements for retail electricity providers, requiring that 100% of their yearly load be sourced from renewable energy by January 1, 2030. In addition, the bill establishes increased and new thresholds for distributed renewable generation, new renewable energy, and load growth renewable energy, with specific criteria outlined for each of Vermont’s different electricity providers. If these requirements cannot be met, and some utilities are already meeting the 100% requirement, the bill offers the option of alternative compliance payments at specified rates. Vermont electric utilities generally agreed with and supported the bill.

The bill was met with some contention from the Governor’s Office, which proposed its own plan to modernize the RES. The Governor’s plan was estimated to incur around $165 million in electric costs over a decade, largely from power purchasing and excluding potential savings from reduced fossil fuel usage. In contrast, the legislature’s plan, as embodied in H.289, was projected to cost between $150 million and $400 million over the same period, also without factoring in potential savings from fossil fuel reductions. The most significant difference between the two plans stemmed largely from differences in accounting, with the Governor including savings from the virtual elimination of residential net metering and switching to a clean energy standard that includes nuclear power. While nuclear power is still used on the New England grid and purchased by Vermont utilities, it is unlikely that new plants will be built in the short term.

The use of hyperbolic rhetoric and inaccurate projections by administration officials during the debate surrounding H.289 was disappointing. Given the complexities of energy policy and the ongoing transition in the energy sector, a more fact-based approach to public dialogue about these policy choices is important for informed decision-making. 

Looking ahead, Vermonters are anticipated to spend approximately $14 billion on electricity from 2025 to 2035. During this period, significant transmission investments, estimated at around $600 million, may be necessary for grid infrastructure improvements due to factors such as increased electrification, climate change impacts, labor costs, and inflation. These costs are anticipated prior to modernizing the RES. At the same time, Vermonters are expected to increase electric use for transportation and heating and cooling. Ensuring the growth in electrification is met with new renewables means that in addition to having enough power for the growing demand, we will be drawing less fossil fuel powered energy from the New England grid.

Initial fiscal assessments of H.289 initially projected costs at $1 billion over a decade, but subsequent analysis by the Joint Fiscal Office (JFO) revised this estimate to between $150 million and $450 million, underscoring the challenge of predicting implementation costs. This emphasizes the importance of comprehensive ongoing evaluations of Vermont’s energy transition. I encourage further study and querstions of H.289’s implications for Vermont’s renewable energy future and welcome your query or feedback as we navigate our state’s changing energy landscape.