House panel hears 1-year extension request for Ryegate biomass plant; state agency details costs and REC revenue

The House Energy and Digital Infrastructure Committee on May 22 took testimony on a one-year extension request for the Ryegate biomass generating station’s efficiency-upgrade schedule, with the Vermont Department of Public Service describing the plant’s output, contract price and how renewable energy credits (RECs) factor into utility bills.

Department Director of Regulated Utility Planning TJ Ford told the committee the Ryegate plant provides about 20 megawatts of baseload capacity, typically running in most hours of the year with a capacity factor he described as “about 88 to 95%” in most years. “The price will not change. It will be extended for another year, that price, so in the context of this extension,” Ford said, referring to the roughly 10¢ per kilowatt-hour contract that utilities pay under the standard-offer arrangement.

Why it matters: the contract buys energy, capacity and RECs; the state testimony said the fixed-price contract acts as a hedge against volatile market prices but has shifted costs upward in some years. Ford told the panel that Department analysis showed the contract cost ratepayers roughly $5 million more in many years compared with open-market purchases, with updated figures putting the difference at about $4 million in 2024, about $6 million in 2023 and about $1 million lower in 2022, a year of unusually high market prices.

Ford described how the contract and REC treatment work under existing orders and the standard-offer program established in 2013. He said the contract price was set by the Public Utility Commission’s orders that took effect in early 2013 and that, under the extension as proposed, the dollar-per-kilowatt-hour price would remain in place until milestones tied to the plant’s efficiency upgrades are met; after those milestones the PUC is directed to reevaluate the price. Ford said utilities — with the exception of Burlington Electric Department, which is exempt from this contract — are required to take the power through the standard-offer program.

On RECs and out-of-state sales, Ford and other witnesses explained that the plant’s biomass attribute is sold in regional markets. Ford said Connecticut’s renewable portfolio standard currently assigns the highest value to biomass RECs (he cited roughly $30–$35 per megawatt-hour), though Connecticut’s biomass requirement is scheduled to phase down beginning around 2030, which would reduce that market value. Ford said utilities receive 90% of the REC value and the plant retains about 10% to cover operation and maintenance tied to the emissions-control equipment that qualified the resource for higher-value RECs.

Committee members pressed for clarifications about timing and scope. Members asked whether the one-year extension changes the contract’s end date; Ford said the price and the extension of the milestone schedule are the subject of the one-year request and that the contract’s current end date, as stated in testimony, remains 2032. He said the earlier legislative extensions had moved interim dates (members discussed references to 2027 and 2028 during the hearing), and that the committee should expect the PUC to reassess price after the efficiency milestones are reached.

Ford also noted the department has been reviewing reports the plant files with the legislature showing its supplier payment performance. He said those reports for late 2024 and the first quarter of 2025, certified by an auditor, indicate the plant has greatly improved supplier payment timeliness compared with several years ago.

Witnesses and staff provided additional figures and context: the department estimated yearly REC revenue available to utilities in the current market, various speakers discussed how RECs are tracked through the regional tracking system (NEPOOL GIS) and ISO New England’s accounting, and committee staff said the PUC or contract manager (as described during the hearing) administers contract obligations and REC transfers on behalf of utilities.

No committee vote occurred during the session; members scheduled a straw poll for the following morning and indicated they would use the department’s testimony and the company’s milestone schedule in deciding whether to grant the one-year extension. Ford said he would follow up to confirm certain REC-accounting details raised by members.

Ending — next steps: the committee closed the hearing with a reminder of its straw poll on the extension the next morning and indicated staff would circulate written materials and any outstanding company reports before the panel’s next action.