Committee reviews bill to expand standard-offer program and add community solar carve-out

A legislative hearing on S.57 reviewed language to reauthorize Vermont’s standard-offer program, increase the program’s cumulative capacity by 100 megawatts and create a small annual carve‑out for community solar projects, witnesses and legislative counsel said.

Ellen Tarkovsky, Office of Legislative Counsel, told the Natural Resources & Energy committee that “it is reauthorized. It’s adding a new allocation for the standard opera program.” Tarkovsky walked members through draft changes that would increase the program cap from 127.5 megawatts to 227.5 megawatts and raise annual allocation blocks so that, beginning April 1, 2026, 20 megawatts would be released per year for five years (adding approximately 100 megawatts total).

The bill text discussed at the hearing would reserve 2 megawatts of each year’s 20‑megawatt allocation specifically for community solar projects. The draft defines a community solar project as “a solar plant owned by its members or an entity controlled by its members,” and would direct the Public Utility Commission (PUC) to establish a price cap for community solar equal to the price of the highest-cost similarly sized standard-offer project from the preceding 12 months. If the community-solar carve‑out is not fully subscribed, the PUC would reallocate the unsubscribed capacity to other standard-offer projects.

Witnesses explained how the standard-offer program operates and why S.57’s changes were proposed. Tarkovsky described the program’s existing reverse-auction structure, in which developers bid and the lowest bids receive contracts that require the utilities (unless exempted) to purchase the awarded power at the bid price. She noted that the statute contains many detailed administrative provisions not included in the draft excerpt presented at the hearing.

Ben (last name not specified), representing the Vermont Public Interest Research Group, and Genovia Burn, professor of law and interim director of the Energy Clinic at Vermont Law School, both testified in favor of maintaining a standard-offer mechanism. Ben emphasized the program’s role in producing market price data and affordable contracts through competitive bidding. Burn said community-owned or community‑focused projects offer opportunities for towns, schools and nonprofits that lack adjacent net‑metering sites and that standard-offer procurement can expand access for renters and low‑ and moderate‑income residents who cannot site arrays on their own roofs.

Witnesses and counsel identified several substantive points in the draft: - Capacity and annual allocation: the draft raises the cumulative cap to 227.5 megawatts (from 127.5) and sets an annual release that ramps to 20 megawatts beginning 04/01/2026, effectively adding 100 megawatts over five years. - Community solar carve‑out: 2 megawatts per year of the annual allocation would be reserved for projects defined as owned or controlled by their members; the PUC would set a price cap for those projects tied to prior-year bids. - Provider/independent developer blocks removed: the draft deletes a prior requirement that reserved portions of annual allocations for utility‑built projects versus independent developers, allowing all bidders to compete for the same pool. - Grandfathering and virtual net metering: witnesses explained that virtual group net metering was eliminated under recent changes (referred to at the hearing as Act 179), and that grandfathered projects remain subject to earlier rules while new virtual net‑metering arrangements are not being restored by this bill. - Project sizes: the standard-offer program historically used a 2.2‑megawatt threshold for certain distinctions; tiered sizing and the renewable energy standard allow projects up to 5 megawatts under other programs, and witnesses discussed whether the maximums in statute remain appropriate.

Witnesses recommended specific drafting clarifications. Ben and Burn urged clearer definition of “community solar,” recommended careful use of any price cap (Burn and others said a cap may be useful only for the smaller community‑solar tranche because reverse auctions normally set competitive prices), and suggested mechanisms for steering awarded projects to parts of the grid where interconnection is feasible without excessive network upgrades.

Committee members and witnesses also discussed program details that the statute or the PUC typically administers: contract construction deadlines (capacity returned to the pool if developers fail to build within the required time), how the PUC assesses geographic diversity and technology mix, and how unsubscribed capacity would be reallocated.

No committee vote or final action on S.57 was recorded at the hearing; the session collected testimony and line‑by‑line drafting questions. Witnesses recommended further PUC input and more precise statutory language for community solar definitions and price‑cap mechanics before the bill advances.

Next steps: S.57 remained under committee consideration after the hearing, with witnesses and counsel offering to provide written testimony and the PUC identified as an important next source of detailed administration and interconnection information.