2005 Vermont Code - § 6523. — Vermont clean energy development fund

§ 6523. Vermont clean energy development fund

(a) Creation of fund.

(1) There is established the Vermont clean energy development fund to consist of:

(A) the proceeds due the state under the terms of the memorandum of understanding between the department of public service and Entergy Nuclear VY and Entergy Nuclear Operations, Inc. that was entered under public service board docket 6812; together with the proceeds due the state under the terms of any subsequent memoranda of understanding entered before July 1, 2005 between the department of public service and Entergy Nuclear VY and Entergy Nuclear Operations, Inc.; and

(B) any other monies that may be appropriated to or deposited into the fund.

(2) Balances in the fund shall be held for the benefit of ratepayers, shall be expended solely for the purposes set forth in this subchapter, and shall not be used for the general obligations of government. All balances in the fund at the end of any fiscal year shall be carried forward and remain part of the fund. Interest earned by the fund shall be deposited in the fund. This fund is established in the state treasury pursuant to subchapter 5 of chapter 7 of Title 32.

(b) Definitions. For purposes of this section, the following definitions shall apply:

(1) "Clean energy resources" means electric power supply and demand-side resources that are either "combined heat and power facilities," "cost-effective energy efficiency resources," or "renewable energy" resources.

(2) "Combined heat and power (CHP) facility" means a generator that sequentially produces both electric power and thermal energy from a single source or fuel. In order for a fossil fuel-based CHP system to participate in the clean energy program set out in this section, at least 20 percent of its fuel's total recovered energy must be thermal and at least 13 percent must be electric, the design system efficiency (the sum of full load design thermal output and electric output divided by the heat input) must be at least 65 percent, and it must meet air quality standards established by the agency of natural resources.

(3) "Cost-effective energy efficiency" means those energy efficiency and conservation measures that would qualify as part of a utility's least-cost integrated plan under 30 V.S.A. § 218c or that would be an eligible expenditure under 30 V.S.A. § 209(d).

(4) "Renewable energy" has the meaning established under 30 V.S.A. § 8002(2), and shall include the following: solar photovoltaic and solar thermal energy; wind energy; geothermal heat pumps; farm, landfill, and sewer methane recovery; low emission, advanced biomass power, and combined heat and power technologies using biomass fuels such as wood, agricultural or food wastes, energy crops, and organic refuse-derived waste, but not municipal solid waste; advanced biomass heating technologies and technologies using biomass-derived fluid fuels such as biodiesel, bio-oil, and bio-gas.

(c) Purposes of fund. The purposes of the fund shall be to promote the development and deployment of cost-effective and environmentally sustainable electric power resources, for the long-term benefit of Vermont electric customers, primarily with respect to renewable energy resources, and the use of combined heat and power technologies. The general assembly expects and intends that the public service board, public service department, and the state's power and efficiency utilities will actively implement the authority granted in Title 30 to acquire all reasonably available cost-effective energy efficiency resources for the benefit of Vermont ratepayers and the power system. The fund shall be managed, primarily, to promote:

(1) the increased use of renewably produced electrical and thermal energy and combined heat and power technologies in the state;

(2) the growth of the renewable energy-provider and combined heat and power industries in the state;

(3) the creation of additional employment opportunities and other economic development benefits in the state through the increased use of renewable energy and combined heat and power technologies; and

(4) the stimulation of increased public and private sector investment in renewable energy and combined heat and power and related enterprises, institutions, and projects in the state.

(d) Expenditures authorized.

(1) This fund shall be administered by the department of public service to facilitate the development and implementation of clean energy resources.

(2) The department shall assure an open public process in the administration of the fund for the purposes established in this subchapter.

(3) By January 15 of each year, commencing in 2007, the department of public service shall provide to the house and senate committees on natural resources and energy, the senate committee on finance, and the house committee on commerce a report detailing the revenues collected and the expenditures made under this subchapter, together with recommended principles to be followed in the allocation of funds and a proposed five-year plan for future expenditures from the fund.

(4) Projects for funding may include the following:

(A) projects that will sell power in commercial quantities;

(B) among those projects that will sell power in commercial quantities, funding priority will be given to those projects that commit to sell power to Vermont utilities on favorable terms;

(C) projects to benefit publicly owned or leased buildings;

(D) renewable energy projects on farms, which may include any or all costs incurred to upgrade to a three-phase line to serve a system on a farm;

(E) small scale renewable energy in Vermont residences and businesses;

(F) projects under the agricultural economic development special account established under 6 V.S.A. § 4710(g) to harvest biomass, convert biomass to energy, or produce biofuel;

(G) until December 31, 2008 only, super-efficient buildings; and

(H) effective projects that are not likely to be established in the absence of funding under the program.

(5) If during a particular year, the department determines that there is a lack of high value projects eligible for funding, as identified in the five-year plan, or as otherwise identified, the department may consult with the board, and shall consider transferring funds to the energy efficiency fund established under the provisions of 30 V.S.A. § 209(d). Such a transfer may take place only in response to an opportunity for a particularly cost-effective investment in energy efficiency, and only as a temporary supplement to funds collected under that subsection, not as replacement funding.

(e) Management of fund.

(1)(A) There is created the clean energy development fund advisory committee, which shall consist of the commissioner of public service, or a designee, and the chairs of the house and senate committees on natural resources and energy, or their designees.

(B) There is created the clean energy development fund investment committee, which shall consist of seven persons appointed by the clean energy development fund advisory committee.

(2) The commissioner of public service shall:

(A) by no later than October 30, 2006:

(i) develop a five year strategic plan and an annual program plan, both of which shall be developed with input from a public stakeholder process;

(ii) develop an annual operating budget;

(iii) develop proposed program designs to facilitate clean energy market and project development (including use of financial assistance, investments, competitive solicitations, technical assistance, and other incentive programs and strategies); and

(iv) submit the plans, budget, and program designs to the clean energy development fund advisory committee for review and to the clean energy development fund investment committee for approval;

(B) adopt rules by no later than January 1, 2007 to carry out the program approved under this subdivision;

(C) explore pursuing joint investments in clean energy projects with other state funds and private investors to increase the effectiveness of the clean energy development fund;

(D) acting jointly with the members of the clean energy development fund investment committee, make decisions with respect to specific grants and investments, after the plans, budget, and program designs have been approved by the clean energy development fund investment committee. This subdivision (D) shall be repealed upon the effective date of rules adopted under subdivision (2)(B) of this subsection.

(3) During fiscal years after FY 2006, up to five percent of amounts appropriated to the public service department from the fund may be used for administrative costs related to the clean energy development fund. (Added 2005, No. 74, § 2; amended 2005, No. 208 (Adj. Sess.), § 5; No. 215 (Adj. Sess.), § 280, eff. May 31, 2006.)