On July 8th the Vermont Public Service Board issued a decision in which it established the method by which Standard Offer renewable energy projects will contribute towards covering the costs of the Standard Offer Program’s Facilitator.
Under Vermont’s Sustainably Priced Energy Enterprise Development (“SPEED”) statute, the Board is required to determine the SPEED Facilitator’s “reasonable expenses arising from its role and the allocation of such expenses among plant owners and Vermont retail electricity providers.” Prior to issuance of the July 8th order, the SPEED Facilitator’s costs were borne solely by the utilities.
In its recent decision, the Board determined that, in general, the SPEED Facilitator’s costs should be allocated on a 50/50 basis as between the utilities and the owners of standard-offer projects. However, it chose not to allocate the costs to projects that are in the standard-offer program but are still under development in order to avoid creating the risk of those projects dropping out of the queue prematurely. Instead, the Board allocated costs between the utilities and the operational standard-offer projects. The result is that until all of the standard-offer projects are commissioned (up to the 50 MW program ceiling), the utilities will be allocated a larger share of the costs than the standard-offer projects.
Under the Board’s adopted methodology, costs are allocated to operating projects based upon a project’s capacity, capacity factor, standard offer rate, and technology type. The rates are as follows:
|Technolgoy||Cost per Month per 100 kw of capacity|
By way of example, a 2.2 MW solar project would incur $2640/year over the 25 year life of the contract. While this is a relatively minor cost, Standard Offer developers are always watching their financial pro formas closely, particularly as federal and state tax incentives become less available or certain.