Tier III - Renewable Energy Standard

Background

In 2015, the Legislature, under Act 56 (relating to establishing a renewable energy standard), directed the Public Utility Commission (PUC) to implement the Renewable Energy Standard (RES) program, to take effect on January 1, 2017. Among other things the Act requires Vermont electric Distribution Utilities (DUs) to acquire specified amounts of renewable energy, in the form of renewable attributes or Renewable Energy Credits (RECs), and to achieve fossil fuel savings from energy transformation projects.

The structure of the RES is divided into three categories or tiers:

Tier I - Total Renewable Energy

Tier I requires DUs to procure an amount of renewable energy equivalent to 55% of their annual retail electric sales during the year beginning January 1, 2017. This amount increases by 4% every third January 1 thereafter, eventually reaching 75% in 2032.

Tier II – Distributed Renewable Generation

Tier II requires DUs to procure an amount of renewable energy equivalent to 1% of their annual retail sales from distributed generation resources starting in 2017. This amount increases by three-fifths of a percent each year, eventually reaching 10% in 2032. Pursuant to 30 V.S.A. 8005(a)(1)(C), Tier II resources are also counted as part of a DU’s Tier I requirement.

Tier III – Energy Transformation

Tier III requires that DUs either procure additional renewable distributed generation eligible for Tier II or acquire fossil fuel savings from energy transformation projects. Energy transformation projects are those that reduce fossil fuel consumed by DU customers. For Tier III, the RES establishes a required amount of 2% of a DU’s annual retail sales during the year beginning January 1, 2017, increasing by two-thirds of a percent each year until reaching 12% in 2032. Energy transformation projects implemented on or after January 1, 2015 are eligible to be counted towards a DU’s Tier III obligation.

On June 28, 2016, the PUC issued a final order in Docket 8550 implementing the Renewable Energy Standard. This order directed the Department of Public Service (PSD) to carry out evaluations to determine whether a DU was meeting its RES obligations.

As part of this process the DUs, with input from the PSD and other stakeholders, created a Technical Resource Manual for measures that were considered to have a “known” savings value that could be prescriptively calculated.

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