Senate Finance reviews H710 proposing narrower "plant" definition and a state decommissioning fund

The Senate Finance Committee on Friday reviewed H710, a bill that would add a statutory definition of "electricity generating facility" for Vermont's renewable energy programs and authorize the Public Utility Commission (PUC) to pursue a state-managed decommissioning fund.

PUC General Counsel Steph Hoffman told the committee the definition in H710 reflects a November PUC report produced after stakeholder meetings required by last year’s Act 38. "We convened proceedings at the commission… and we engaged interested parties," Hoffman said, adding the recommendation pairs changes to the "plant" definition with a decommissioning proposal the PUC developed during that proceeding.

Under the bill’s baseline standard, multiple electricity-generating facilities that use the same technology and are located on the same parcel or contiguous parcels would be treated as a single "plant." That baseline is intended as a screening test for program eligibility and is meant to prevent parties from splitting a single development across parcels to exceed statutory capacity caps for programs such as residential net metering (500 kW), the standard-offer program (about 2.2 MW cap), and REST Tier 2 (up to 5 MW in some cases).

PUC staff said H710 also includes three exceptions to that baseline: individual residential net metering systems, multi-owner residential net metering in common-interest communities (for example, condominiums), and collocation where separate points of interconnection ensure program capacity caps are not exceeded. "We developed a new standard that sets as a baseline… parcel and contiguous parcel plus same generating technology," Hoffman explained, adding the exceptions are intended to protect rooftop residential systems and certain community arrangements.

Committee members raised policy tradeoffs. One lawmaker said incentives were critical to build nascent renewable energy industries, but asked "at what point does that industry become mature" and whether subsidies should be reduced. PUC staff emphasized the statutory definition in H710 is a screening mechanism and that separate Section 248 permitting and certificate-of-public-good review would still apply for siting and other permit criteria.

The PUC also described a linked decommissioning proposal aimed at addressing weaknesses in the current financial-assurance system. Staff attorney Wes Skidmore said Rule 5.900 (adopted in 2017 under Section 248) requires developers of privately owned generation or storage installations larger than 500 kW to file decommissioning plans and provide financial assurances, typically via bank instruments. "We require developers to obtain, maintain and update a financial instrument covering the estimate," Skidmore said.

PUC staff told the committee they found significant compliance problems during an audit: roughly 60–65% of facilities required to maintain these instruments were out of compliance with the triennial update or instrument standards. Skidmore said that creates both enforcement and administrative challenges, because the commission cannot directly hold cash and would likely have to litigate to collect on some bank instruments decades after installation.

To address those risks the PUC proposed creating a special decommissioning fund managed in collaboration with the state treasury. Under the model staff described, developers would make upfront or periodic contributions that the fund would invest; the fund’s principal and returns could be drawn for decommissioning in delinquency cases, to pay administrative costs and to cover overruns. "We think there would be an upfront contribution, we think the fund would be managed by the commission with collaboration from state treasury," Skidmore said.

Committee members asked whether the fund would require retroactive payments from existing projects and how contribution amounts would be set. The PUC said it does not expect to force already-built projects to opt in on a single blanket rule and that the fund design—including contribution formulas and whether existing projects would pay a make‑up amount—would be determined through a PUC rulemaking and consultant work. "We don't feel that we have the expertise to… come to you with a dollar. That's why we think we need further process and we need to retain experts," Hoffman said.

Stakeholder testimony later in the session supported H710's approach to the single-plant rule. Peter Sterling, identified as an executive director for a renewable energy organization, argued that clarifying and limiting the single-plant rule would reduce unnecessary road and pole construction on already-disturbed sites and make projects less expensive without harming ratepayers.

The committee did not take final action on H710. Members requested a PUC briefing on REST program tiers and signaled they would continue working the bill and the decommissioning proposal in subsequent meetings.