Dive Brief:
- NextEra Energy, one of the leading U.S. renewable power producers, will no longer trade Vermont's renewable energy credits (RECs) because, NextEra claims, they are being double-counted.
- Renewables-generated electricity from Vermont power facilities apply to Vermont utilties' voluntary renewables consumption but RECs earned for that generation are often sold to out-of-state power suppliers and used again to meet the out-of-state companies’ mandated renewables requirements.
- NextEra’s decision follows the Connecticut Legislature's ban on the purchase of Vermont credits by its utilities and adds to momentum pushing Vermont legislators toward revising the state’s renewables incentives program.
Dive Insight:
Vermont Law School renewables authority Kevin Jones called Vermont’s double selling “fraudulent” and a way “to create the perception of being green without paying the full price of being green." Vermont is actually importing fossil fuel-generated electricity while exporting renewables-generated electricity, he said.
Vermont Department of Public Service (DPS) official Darren Springer said the NextEra decision will not impede Vermont’s renewables growth because the broader market signal from the REC price of $0.06 per kilowatt-hour will continue to cut Vermont electricity costs by 5%. Green Mountain Power, Vermont’s biggest utility, has sold RECs worth $22 million.
Lyndon State College Professor Ben Luce called the double sale practice "blatant fraud" because it distorts the market price of renewables-generated electricity and lobbied Vermont lawmakers to revise the program. Vermont’s SPEED program, designed to move the state toward 20% renewables by 2017, is the only such program in the U.S. that has this double sale loophole.
Vermont’s DPS will report to lawmakers next year on the environmental and economic benefits of adopting a renewable energy portfolio standard which would require the state’s utilities to either sell or keep the RECs but prevent them from doing both.
