Vermont's Renewable Energy Law: When Did It Begin?

Vermont's renewable energy initiative became law on June 17, 2024, when the Vermont General Assembly voted to override Governor Phil Scott's veto of H.289, which modernised the Renewable Energy Standard and set Vermont utilities on track to deliver 100% renewable electricity by 2035. This was the first major update to the Renewable Energy Standard since its original passage in 2015 and was the result of a collaborative effort between Renewable Energy Vermont, Vermont's distribution utilities, VPIRG, key legislative leaders, and other stakeholders.

Vermont's renewable energy law requires all electric utilities to be 100% renewable by 2035

Vermont's renewable energy law, which requires all electric utilities to be 100% renewable by 2035, was passed on June 17, 2024, when the Vermont General Assembly voted to override Governor Phil Scott's veto of H.289. The bill sets Vermont on the path to becoming the first state in the nation to have a 100% renewable energy electricity portfolio.

The bill requires retail electricity providers to serve 63% of their annual load with renewable energy resources during the year beginning on January 1, 2025, increasing by at least 4% every three years until reaching 100% by 2030 or 2035, depending on the size of the provider. The updated Renewable Energy Standard (RES) also introduces two new tiers: New Renewable Energy and Load Growth Renewable Energy.

The new law is expected to have several impacts, including doubling the amount of new renewables that Vermont utilities are required to build in-state, reducing Vermont's reliance on fossil fuels, and enhancing grid reliability and resilience.

The Vermont RES Reform Legislation is a thoughtfully crafted compromise that was supported by the state's electric utilities, environmental organizations, and the renewable energy sector. It is the first major update to the RES in nearly a decade and represents the most significant action Vermont has ever taken to cut carbon pollution in the electric sector.

The law is the first major update to the Renewable Energy Standard in nearly a decade

Vermont's Renewable Energy Standard (RES) was first established in 2015. The RES required Vermont's retail electricity providers to acquire a percentage of all transmitted electricity from renewable sources, with the aim of reaching 75% by 2032.

In June 2024, the Vermont legislature passed H.289 to significantly reform the RES, setting Vermont on the path towards 100% renewable electricity by 2035. This was the first major update to the RES since its original passage in 2015 and represented a landmark moment in the state's transition to renewable energy.

The updated RES includes two new tiers: New Renewable Energy and Load Growth Renewable Energy. It also bolsters existing renewable energy generation requirements, now comprising five tiers in total. The new legislation gives utilities the flexibility to pursue resources that are most economical for their ratepayers, either large or small, in-state or in-region.

The updated RES has several practical implications, including:

• Doubling the amount of new renewables that Vermont utilities are required to build in-state
• Driving the development of new renewable energy resources throughout the region
• Reducing Vermont's reliance on fossil fuel sources, resulting in less regional demand for fossil fuel-based generation
• Helping Vermont meet its greenhouse gas emission reduction goals
• Enhancing grid reliability and resilience
• Increasing state tax revenue from new generation

The law is expected to double the amount of new renewable energy that utilities are required to build in-state

Vermont's Renewable Energy Standard (RES) was first passed in 2015. The RES required Vermont's retail electricity providers to gradually increase the percentage of electricity acquired from renewable sources, reaching 75% by 2032, with at least 10% of that renewable energy to be generated in-state.

In June 2024, the Vermont legislature passed H.289, which significantly reformed the RES. The bill was passed by overriding Governor Phil Scott's veto, with a vote of 21-8 in the Senate and 102-43 in the House.

H.289 sets Vermont on the path toward 100% renewable electricity by 2035, making it the third state in the US to enforce such a timeline. The bill also represents the first major update to the RES since its original passage in 2015.

The updated RES includes two new tiers: New Renewable Energy and Load Growth Renewable Energy. The new RES also bolsters existing renewable energy generation requirements for Vermont providers, now comprising five tiers in total.

The New Renewable Energy tier requires providers serving 75,000 customers or more to supply 4% of their annual load with new renewable energy by 2027, increasing to 10% by 2030, 15% by 2032, and 20% by 2035. For providers serving fewer than 75,000 customers, this tier requires them to supply 5% of their annual load with new renewable energy by 2030 and 10% by 2035.

The Load Growth Renewable Energy tier requires providers that already use 100% renewable energy to meet future load growth with at least the following percentages of new renewable energy: 50% by 2025, 75% by 2026, 90% by 2027, and 100% by 2028.

The updated RES is expected to have several impacts, including:

• Doubling the amount of new renewable energy that Vermont utilities are required to build in-state.
• Driving the development of new renewable energy resources throughout the region.
• Reducing Vermont's reliance on fossil fuel sources, resulting in less regional demand for fossil fuel-based generation.
• Helping Vermont meet its greenhouse gas emission reduction goals.
• Insulating Vermonters from future rate shocks associated with fossil fuel price volatility.

The law restricts the use of biomass and large-scale hydroelectric energy

On June 17, 2024, the Vermont General Assembly passed H.289, a bill that modernises the Renewable Energy Standard and sets Vermont on a path to 100% renewable electricity by 2035. H.289 also includes restrictions on the use of biomass and large-scale hydroelectric energy.

The new law introduces several changes to Vermont's energy policy, including the elimination of offsite net metering and the restriction of the use of biomass and large-scale hydroelectric energy.

Elimination of Offsite Net Metering

H.289 phases out offsite or "virtual" net metering from January 1, 2025. This cutoff is pushed out by a year for systems that serve multifamily, low-income residential buildings, which must file applications for offsite systems by January 1, 2026. When these changes take effect, net-metering projects must be located on the same parcel as, or on a parcel adjacent to, where the generated energy will be used.

Near-Elimination of New or Expanded Biomass Plants

H.289 introduces new age, efficiency, and emissions standards for biomass plants, which are expected to effectively eliminate the use of new or expanded biomass plants to meet compliance requirements.

Limits Utilisation of Large-Scale Hydroelectric Energy

Like the new biomass standards, H.289 limits the addition of new hydroelectric energy plants by including stricter compliance standards.

Practical Implications of the Updated RES

Proponents of H.289 anticipate that it will have several impacts, including:

• Doubling the amount of new renewables Vermont utilities are required to build in-state
• Driving development of new renewable energy resources throughout the region
• Reducing Vermont's reliance on fossil fuel sources, resulting in less regional demand for fossil fuel-based generation
• Helping Vermont meet its greenhouse gas emission reduction goals under the Global Warming Solutions Act
• Enhancing grid reliability and resilience
• Helping insulate Vermonters from future rate shocks associated with fossil fuel price volatility
• Increasing state tax revenue from new generation

The law is expected to reduce Vermont's reliance on fossil fuels

Vermont's renewable energy initiative was passed into law on June 17, 2024, when the state's General Assembly voted to override Governor Phil Scott's veto of H.289. The bill modernises the Renewable Energy Standard and sets Vermont on course to deliver 100% renewable electricity by 2035 at the latest.

The new law is expected to reduce Vermont's reliance on fossil fuels by:

• Doubling the amount of new renewables that utilities are required to build in-state
• Driving the development of new renewable energy resources throughout the region
• Reducing the state's reliance on fossil fuel sources both in and out of Vermont, resulting in less regional demand for fossil fuel-based generation
• Helping Vermont meet its greenhouse gas emission reduction goals under the Global Warming Solutions Act
• Limiting access to offsite net metering for Vermont residences and businesses, while encouraging the development of a successor program that would serve low-income housing
• Enhancing grid reliability and resilience
• Helping insulate Vermonters from future rate shocks associated with fossil fuel price volatility
• Increasing state tax revenue from new generation

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