Washington Electric Cooperative, based in East Montpelier, is reducing the allowed amount for net metering systems to 5 kilowatts starting October 1. Limiting electricity generation through Vermont's "net metering" program is a necessary step, WEC said in a statement, because costs of overhead, distribution and maintenance are being cost-shifted to non-net metering customers. Alternative energy advocates immediately took issue with the news.
"The Vermont Natural Resources Council is disappointed by today’s news that the Washington Electric Coop will soon set limits on the size of systems for new net metering customers," VNRC said in a press release Tuesday. "WEC’s October 1 limit ‘ 5kW or less ‘ is smaller than required by an average Vermont homeowner and threatens to stop or significantly slow the development of clean, affordable and valuable solar power in WEC territory.
"This news from WEC ‘ long a leader in its commitment to clean, renewable power ‘ also comes on the heels of announcements from other Vermont utilities, who have made clear they will not accept any new customers."
Hardwick Electric recently curtailed its program for reasons similar to WEC's.
"By not collecting fixed costs from all members, in effect, results in a cost shift to those members without net metered installations," WEC said in a statement Tuesday. "As a not-for-profit electric utility, which is owned by our members, our only recourse for recovering insufficient revenue is to increase rates.’
Barry Bernstein, WEC's board president, was quoted as saying, ‘We embraced net metering from the outset and have worked diligently to support WEC members who were interested in pursuing it. As more and more members have signed up over the 4 percent threshold, we are growing concerned of the cost impact on other members.’
WEC has about 10,500 customers, almost all of whom are residential. Its budget is about $13 million. It covers parts of 41 towns in north-central Vermont, in the counties of Washington, Orange, Caledonia and Orleans.
The state allows utilities to curtail the program once a utility's net metering program reaches 4 percent of peak load power. While these smaller utilities have reached those limits, advocates see the net metering program as just starting to gain traction and said this will slow that progress.
"Our net metering program has been our state's primary successful renewables initiative, fostering clean energy, lowering peak costs on summer days for all customers, and creating local jobs," Renewable Energy Vermont said in a press release. "As a result, Vermont has become 11th in the country for solar jobs. Unraveling a customer's right to net meter would take us squarely backwards from our state's adopted renewable energy goals of 90% by 2050 and is shortsighted as Vermont begins the shift to increased electrification of our other energy sectors.
"The fact is the few utilities seeking to limit net metering are doing so with less than 1% of their production coming from net metered energy and by doing so they threaten to fundamentally undermine a program that has just now begun to achieve success and create jobs. Our state's municipal utilities and co-ops ought to be in the best position to promote the benefits of net metering to their own members -- after all, they are owned by the very customers demanding this fundamental right, grounded in the best of Vermont's tradition of self-reliance."
Net metering is defined by Vermont law as the difference between the electricity supplied to a customer and the electricity that a customer’s renewable energy system feeds back to the grid.
In 2011, the state’s net metering program was expanded. The way net metering in Vermont works is that for each kilowatt-hour (kWh) a customer produces, the utility must provide the customer with a 20-cent credit, minus the utility’s highest residential rate per kWh. For example, if a utility’s power rate is 14 cents per kWh, then the net credit to the customer would be 6 cents. The law also increased the maximum capacity of net metering projects to 500 kilowatts.
Under the law, utilities are required to take on net metering customers until the total capacity of those systems equals 4 percent of the utility’s peak demand during 1996 or the previous calendar year. Due to the intermittent nature of renewable energy, such as with solar and wind-based systems, the actual energy output of a given system is a fraction of its capacity.
Washington Electric surpassed the 4 percent cap at the end of 2012, with 138 net metering installations, totaling 683.4 kW. Four percent of the utility’s 2011 peak was 635 kW.
In recent months, Hardwick Electric and its roughly 4,200 customers hit the 4-percent mark on the utility’s 2012 peak, with a total of 258 kW in net metering.