The Vermont legislature passed, and Governor Douglas signed on June 14, 2005, significant energy legislation that includes provisions promoting CHP development, as part of comprehensive energy related act. The legislation is commonly known as Act 61. The Vermont Public Service Board (PSB) will develop rules implementing Act 61, including portions directly benefitting CHP.
Major elements of the legislation include:
Sustainably Priced Energy Enterprise Development Program (SPEED)
The SPEED program will encourage the development of in-Vermont renewable electricity to support the Renewables Portfolio Standard goals (see below), as well as high efficiency CHP facilities that may consume nonrenewable sources of fuel. CHP with a total system efficiency requirement of at least 65 percent will be eligible. The legislation requires the PSB to create a program that will encourage developers and utilities to enter into long-term, affordable contracts for new renewable energy projects. Details of this program are to be designed by the PSB by September 2006, and likely will include some sort of central procurement provision for eligible resources, and possibly other kinds of support.
Renewables Portfolio Standard (RPS)
The RPS encourages Vermont utilities to meet any new load growth in the next seven years with renewable energy resources. It sets a goal of meeting the lesser of load growth, or 10% of 2005 load, by 2012. If this goal is not met, an RPS will become mandatory in 2013. Renewable energy includes sewage and landfill methane gas, anaerobic digestion of agricultural byproducts or waste, agricultural or silvicultural waste, and hydro of 200 MW or less. Although CHP will not be eligible for the RPS if it comes into effect, new CHP installed before 2010 will help avoid the requirement for one.
The Public Service Board was directed to establish standardized interconnection standards for renewable and CHP generators up to 50 MW by September 2006. [See Interconnection policy discussion].
Other Encouragement for CHP
The act allows the public service board and department to encourage certain efficient combined heat and power facilities, and to allow retail electricity companies credit for efforts taken to encourage efficient combined heat and power facilities, by the state's efficiency utility. There is some possibility that a program targeting CHP as an efficiency measure will be initiated. Stay tuned.