Net Metering for a Post-Utility Age? Vermonters Move Towards Decentralized Energy Generation

As a Vermont Electric Co-op (VEC) member, I found CEO Christine Hallquist’s recent commentary “Pricing Renewable Energy” as disappointing as it is intentionally misleading.

We know utilities nationwide are scared to death of the people taking the power back over their energy future and demanding clean energy sources over dirty out-of-state fossil fuels. We also know the Koch brothers and fossil fuel corporations have infiltrated utilities around the country who now speak of a “death spiral” of their dated business model. But it’s disappointing here in Vermont that Hallquist would be using the same misleading talking points of utility executive counterparts from other parts of the country, even at the expense of co-op members themselves.

Hallquist sings the praises the role of America’s rural cooperatives for serving a unique role — and they do. However, she fails to mention that Green Mountain Power has rural territory spanning from southwestern Bennington County to the farthest rural reaches of the Northeast Kingdom. Yet, their customers are billed 10 to 20 percent less than customers of VEC. And they aren’t seeking special fees on their customers. So are we VEC members really being well served as best we can be by our co-op?

A fair price for solar customers

Hallquist claims pricing should meet market realities and argues that VEC can buy electricity for “under $.04 per kilowatt hour” on the market now. Then it begs the question why the utility is buying large, utility scale projects in excess of $0.13 per kilowatt hour, more than three times more. And, why when all administration costs and executive salaries are factored in, they charge nearly $.17 per kilowatt hour to their customers. In reality, solar customers — co-op members too — are investing in long-term assets that will generate local renewable energy for years to come, building out the clean, distributed generation infrastructure of the future. They are reducing transmission costs and line losses to move power around the grid. And when VEC sends “summer peak alerts” asking their members to use less power, it’s these very net metering customers who produce excess energy at times of ratepayer need. They should be fairly compensated, not lambasted by the exec of their local utility.

Clean energy over dirty fossil fuels

When Hallquist states that VEC members want renewable energy and they want it affordably, and yet can buy power at under 4 cents on the market right now, she fails to mention that’s dirty, out-of-state power polluting our borders. It’s apples and oranges. If Vermonters wanted the dirtiest coal from the Midwest, they wouldn’t be demanding renewables right here at home. And under 4 cent power surely doesn’t cover the externalities of dirty sources either. In reality, which Hallquist fails to mention, the co-op couldn’t buy a long-term clean energy contracts for 4 cents.

Hallquist’s arguments for grid fees discriminating against net metering customers undermines VEC’s own members’ right to net metering their own energy. Think for a second if utilities could discriminate against customers that live farther from substations when in fact they are the most costly to serve at the end of the line. That’s exactly what Hallquist proposes. Numerous reports by the Department of Public Service have concluded there is no cost-shift by net metering. Sure, the utility might get less revenue from them, but they also have less costly energy to buy and less energy to push out to the far reaches of their electric lines. Discriminating against a class of customers has never been the co-op way.

Market responsive rates

Contrary to the claims, in reality net metering is market responsive. Rates change based on whatever the utility charges its customers for power. That’s a fair bargain. And, the newly proposed net metering rules will further reduce the credits for commercial solar, the vast majority of new capacity, by 30 percent to 38 percent depending on projects, while giving the Renewable Energy Credits to the utility. This is both market responsive and good for ratepayers.

What’s good for the goose is good for the gander

VEC would never sign a long-term contract for power with someone who had the right to change the terms whenever they felt like it. Yet, that is exactly what they want to do to their members who go solar. They want the right to soak this subset of members with higher and higher fees, that they get to determine. Customers of VEC who go solar should be thanked for investing their hard earned money into our collective clean energy future, not targeted by the very co-op they are part of with fees that undermine this investment.

Recall that it wasn’t long ago that the public bailed out VEC when fiscal mismanagement led it to the brink of bankruptcy. The current position of the executive does not serve the co-op members well. Let’s hope misleading 20th century ideology doesn’t yet again lead them off the cliff of irrelevance.

Caleb Elder is a Vermont Electric Co-op member and the Starksboro town energy coordinator.