Vermont Law Sets Rates for Renewable Energy

A new Vermont law sets minimum rates for electricity from small-scale solar, wind, hydro and methane energy sources.

That, in itself, is not news. What's news is that the rates are up to 6 times higher than current energy rates. Higher, in fact, than Vermont utilities pay for renewable energy in the open market.

Prices are fixed as high as 30 cents per kWh for solar, 20 cents for wind and 12 cents for farm methane.

But one of the bill's clauses offers some hope of relief from the sky-high prices. It requires the Public Service Board to determine if those prices are reasonable or "inadequate or excessive" and establish new ones if necessary.

The Board has until Sep. 15, 2009, to do so. And by Jan. 15, 2010, the Board must look at prices again in relation to all incentives from state, federal and other funds, and reset the prices.

So rates may come down.

The bill's main benefit, however, is that it will help renewable energy sources get the revenues they need to improve their technology and grow to a point where they start seeing economies of scale.

Then renewable energy will be cheaper not because of tariffs set by a public utility board, but because markets and technology drive rates down.