Vermont House advances broad update to renewable energy standard after hours of debate

The Vermont House on March 20 adopted committee amendments to H 289, a sweeping revision of the state's renewable energy standard, after an extended floor debate that focused on cost, grid reliability and how the bill treats municipal and small utilities.

Member from Dover, speaking for the bill, said the measure is built to balance affordability, reliability and emissions reductions and to tailor the standard to each type of utility. "This bill respects the priorities that Vermonters identified in that work, affordability, reliability, and reducing carbon emissions, and it values renewables," the Member from Dover said while walking members through the bill's sections.

H 289 would change the RES from percentage-of-retail-sales to percentage-of-load, add new regional tiers, raise distributed generation requirements, and set different 100% renewable deadlines for large investor-owned utilities (earlier) and municipal or industrial utilities (later). The legislation also creates a new Tier 4 (regional renewables) and Tier 5 (load-growth renewables), allows certain small rural utilities options to sell some net-metering renewable energy credits (RECs), and refines eligibility for biomass and small hydro.

Opponents raised concerns about rate impacts and market mechanics. The Member from Swanton asked whether utilities could simply buy RECs or nonrenewable power and offset them, and whether that would leave Vermonters paying more. "If they decide that is the most cost effective way of managing the renewable energy standard, if they have to purchase RECs, yes, that will be incorporated into their rates," the Member from Dover acknowledged. Members warned about potential burdens on low-income ratepayers and small businesses and pressed for clear protections.

Supporters argued the bill contains safeguards and reporting to limit rate shocks and protect consumers. The Member from Brattleboro highlighted that the bill requires annual reporting, integrated resource planning, and an alternative compliance payment mechanism that has rarely been used since the RES was enacted. "These are not new tools; they add transparency and the ability to course correct," the Member from Brattleboro said.

A major policy change in H 289 is a phase-out of off-site group net metering (sometimes called virtual net metering). The bill ends group net metering for most customers at the end of 2024 and for affordable housing developers at the end of 2025, while directing the Department of Public Service to report on replacement programs that would preserve affordable housing benefits.

Members also debated the uncertain fiscal impacts. The Joint Fiscal Office's updated range for costs attributable to the proposal was discussed on the floor; members noted a wide range of estimates and the difficulty of projecting long-term transmission and generation investment needs. "The fiscal note covers a range of scenarios and the JFO now estimates potential costs in the hundreds of millions over a decade, but with considerable uncertainty," a presenter said.

After questions and debate, the House took a roll-call vote on the committee-recommended amendment. The result recorded 99 yeas and 39 nays; the amendment was adopted and third reading was ordered.

What happens next: the bill, as amended, was ordered to third reading and will return for final passage procedure later in the calendar. Committees and the Department of Public Service will produce required reports, including a study on replacement options for group net metering for affordable housing and an annual assessment of distribution of costs and benefits.