 267, which was in this committee back in January. We referred it down to fall to finance where amendments were made. We received the bill back and did a walk-through with council on Tuesday, late Tuesdays, and talked to a member of finance. So we've had a look at the bill now. We're checking back in with all of you, most of you we spoke with in the last two months, but because the bill has evolved, we wanted to, in order from our due diligence side, check back in with folks again to get responses to the bill as voted out of finance. So with that, I'm gonna be asking people to read briefs, roughly five minutes or so. Most people are, that'll work out. Really ask everyone the same read questions. You can add other things here, but the two basic questions are, what are the financial and engineering implications of proposals in S.267 as amended down the hall, particularly in terms of implementing tier one and tier two. So I think because we're talking about regular monopolies and any kind of price implications that flow out of the bill, we're able to flow through to your rate papers. So it's from up. We share a responsibility point of view. We wanna make sure we know what would happen next. So we're gonna have one morning to discuss a bill that could cost many tens of millions of dollars rate payers in this committee? I think we're gonna have enough time. We'll see, if we don't, we'll check back in. Interesting. We did ask for the bill about a month ago. Yeah. So even that's the way things happen sometimes in the state, so I'd like them to jump right in and invite Mr. Kastigai to join us at the table. Thank you. I have a couple slides. Those who jump into the questions. To join us. This is where I'm sorry. All right, I didn't get that. I'll go ahead and do the next one. Good morning. He's sick, right? They are. Thank you. Senator McDonald is sick. He won't be joining us. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. I don't know. Okay. Thank you for committing, Chairman. My name is Josh Kastigai with three month power. Vice President, Chief Innovation Officer at GNP. We're city engineering, power supply function and innovation work at GNP. So I'll quickly step through this and then we can jump right into the questions. But basically, the quality of the formatting is in kind of a flip chart mode here. So again, I think folks know in terms of the 100%, we've committed to 100% by 2030. That component is the bill that's here. One is GNP supports that, which supports that. It's been our plan to move in that direction. Tier two, so as we've talked about supportive of doubling, tier two, supportive of doubling new renewable energy in a way that the original intent of tier two, there's some language in here, but basically it was around limiting cost impact for electric customers, portable reliability, contributing to avoiding or deferring improvements on the T and D system, and also diversifying the size and types of resources. So figuring out a way to get back to that form of thinking. We put some ideas out there that basically how to diversify. We'll talk about solar in just a second, but how to diversify the types of technologies and new renewable energy and do it in a way that doesn't have significant impacts of the transmission distribution system, which we'll talk about as well. Jumping forward, so as tier two has been laid out, even though tier two hasn't been a never dictated, it was solar only, that's how it's worked. And that's great, it's been fine. Solar, as it started, had a tremendous impact on the peaks in Vermont. It was now shifted to later in the day and at night. And so the value has been changing. We still think, and we'll show here in a second, that solar, in the first 10% of tier two, there's still a lot of solar to go, to be needed there. As we look on to page four and five, this is GMP's data, which again, we represent roughly just shy of 80% of the state of Vermont, customers in Vermont. So we show here both the installations of solar and applications of solar to just show both. So you can see in 2019 how many megawatts of solar was installed across our system. This is both net metering, as well as with a non-net metering solar, which could be standard offer in larger projects. And secondly, we look at actual applications. So in 2019, we had more applications for megawatts of solar than we did in 2018. And just another point to make the 2020 is starting out pretty strong as well. So the first two months of 2020 applications are quite a bit higher than the first two months were of 2019. So again, just to our point of view, in terms of solar continue to be strong in Vermont. And those are net metering apps. That's everything. So if you look on the applications page, the first three colors, the blue, the orange, gray on the bar chart is all the net metering. And then the yellow is, it can be a standard offer project, other types of projects. So the chart in six just shows our tier two obligations. The green is the current 10% obligation. So as of 2019, we're at about 2.2% of the total obligation for community tier two. So there's still a considerable amount of solar that's gonna be built to meet tier two. Or other resources, again, it's predominantly solar and probably will continue to be. For GMP, it's about another, it's over 250 megawatts of additional solar just in the 10% that exists today. The blue is just showing you a doubling tier two and how much more energy we'll need to achieve there. So when we think about it, the big piece is how to do it in a way that diversifies the resource that benefits from a great perspective, from a cost perspective, from a carbon perspective. We get, you know, the winter time is a heavy, carbon intense time of year. And so having resources that can meet those times is important as well. When we break down the cost, we look at it in sort of two buckets. We have, what is, you know, if tier two is double as is, what would it cost GMP in a range to fulfill it as we do today? And it's essentially 15, if you jump ahead, you get to the point where okay, we've met the tier two, double tier two. It's an additional 15 to 25 million in that year. So over 10 years, it's 150 to 250 million. And that range is basically, and this is before I'll get into the transmission upgrades. This is before any transmission upgrades. And that range is basically on the high end, that would be if you met a lot of it with net metering. The lower end is if it's less net metering, maybe a more larger, you know, two or five megawatt projects. So that's sort of the range there. So the transmission is the other aspect. If we're per the Veliko long range plan, if it were built out across the state as it has been currently going, you'd have anywhere from 150 to 500 million dollars of transmission investments or upgrades. That reflects through to GMP and to the other DU because that would all be born by the state of Vermont customers in one form or another. So for GMP, that results in an additional, it ends up being about 10% of the investment, the figure of if you spend 150 million dollars on a transmission upgrade, it's gonna cost GMP customers an extra 15 million a year, or 150 million over 10 years, up to obviously 500 million is gonna be much higher. So that's just highlighting the two buckets you would actually add those together. So there'd be the additional cost of procuring of the renewables and the additional cost of the transmission system added together. It's a big range because there's a lot of unknowns, location, all of those things are really important, but the last point I'll make is just, just doubling tier two as it is today, like you're talking about, you know, in excess of 1200 megawatts of solar in Vermont or the system peak is 900. GMP's daily average load, you can figure it's around 450. So it's a considerable amount of just one resource, which is some of the things that drive transmission upgrade needs and that sort of thing. Could you explain the last bullet there, says for example estimated 400 million due to net metering over the next 10 years? What do you mean there? Yeah, so what we're saying there is that there are other costs that exist today, and every year is one of them. So that is sort of like, that's happening. So that is, That's the total cost of net metering or the cost shift to other rate payers? Just the cost shift. So it's the above market component. Above market, yeah. These are all the above the 150 to 250, that's the above market, that's the actual, what customers would have said. And that's just for your customers. That's correct, that's correct. So am I reading it right then? On an end of existence, 15 to 25 plus one tenth of that 150 to 500. So you're on the low end, it's 15 plus, 15 plus 30. And then how does 30 million increase costs flow through to someone's electric bill? I don't know if it works. How many million equals how many on the rate for 10 on the rate? So for rate increases for GMP, it's roughly $6 million is a percent of rate increase. The thing to keep in mind is that once you have a 1% rate increase, that's now locked in. And that's why we talk about it in terms of multiple years because there's this notion that oh, it's only a one or a 2% rate increase. That's not that bad, but actually that's now you've bumped up and that's permanent unless something else changes or you've got other drivers, obviously, but so for GMP, that's above the local ballpark and then that becomes made into your cost. So if I'm using the low end on both those figures, 15, 15, 30 at 6 million each, that's a 5% rate increase for a year. That would happen 10 years in a row. Well, it would be more than 10 years. Essentially what happens is once you increase rates, unless something else changes, it's indefinite. But I mean like five the first year and another five and another five, that's what I meant by it. It's more, so it depends on what happens after this, but if you just, let's just say you meet double tier two and you've stopped and there's no new renewables and it would stay there. So you would add 30 to whatever the other end of the range is in that year and you'd continue to pay that every year. You wouldn't then keep stacking on it unless other things were happening. You know, there's like going to 30% or something else, but it's 30 million more customers are paying each year than they would have paid before. Great. Thank you very much. Any, any questions? Thanks for jumping right in. Yep, thank you. Please, like and like next to join us, Ms. Cohen. With your permission, Craig Keaney was able to join us today and he's our expert on this. So if he does most of the talking, I think we'll get a lot out of that. And Lisa Morris is here with us as well in case we need her to jump in. So, the expert is here today. All right, thank you. And I don't know if he's across, but I'll answer your question. Basically, looking at what are the financial and engineering communications? We're on two markets, final. Any questions? And he'll state, she gave his testimony. Okay, thank you. So let me pass this out. This is a testimony from last time we were here. Did you have both of them? Yeah, everything's in their packet. And also, there's a letter we had sent to finance, which I don't think you saw, which was kind of high level. So we have two things. One is a letter that Andrea sent to my testimony from last time we were here. And I apologize if we're going to ask people to leave, but one word is, there was a high-speed tour of back of each facility that said, yeah, he's going to be proud of these changes. First time. And I'll get the highlights. Thank you. So again, my name's Craig Keeney. I'm a co-op manager at Alspot. Thank you for having me here today. And you were tall, I was here earlier, and our position has not changed, even with the re-raised bill. The numbers that I presented for last time are still the same. And our concern is the rioting cost because we have many numbers we serve or don't. So we're still in that position. With respect to the specific wording in the bill, you turn to page three of the bill, there's a section C2 talk about storage over the Senate, so you'll start now on 17th. This distributed renewable generation shall use technologies, including storage to maximize regular buildings. It should be located in a manner that maximizes grid efficiency. Our concern with that wording is that it's convenient. Does he have a different copy than we do? Set number seven at the top. Oh yeah, we might have to hold it for a while. Yeah, you don't have to have one at the top. I don't think I should hold it at the top, but... We're going to get some time step on it. I said there's a three, nine, 20, a 12, 31. Yeah. I think you read it correctly. Yeah, page three of the sevens. The bottom here on 17th. Okay, there's numbers. It's just the numbers are different. Okay, so starting on line 15. Yeah, on page three. Yeah. Sorry about that. Sorry. That's all right. So our concern with that ambiguity is where are we talking about storage here? Is the storage that is paired with a renewable project? Is it just storage that can be filled from the grid? Is it storage that is phoned by and paid for just by the end-use customer? Or is it storage that is subsidized by other members? And are there utility customers? The concern there is that although storage has many benefits, if it's used at the wrong time, it can actually increase cost to the utility. And if it's subsidized by all the members, we have a concern with that because it can drive up cost. So we like that ambiguity cleared up. Turning to page seven, section two. Interconnection matters. Or page five of section two. Interconnection matters. We appreciate the intent of that wording that tries to steer development to places not congested. But as worded, it has no teeth. It is just a suggestion. There's nothing that makes the developer not be able to build an area. Sorry. Not in here, but something that we did suggest to Senate Finance. And as we talked about in our letter, is minimizing lowering the threshold for net metering from 500 kilowatts to 150 kW. And we think that the purpose of that is net metering is the most expensive way for us to meet the risk. And our goal is to meet the risk in the least cost possible. We understand that some people argue that the 500 kW projects allow people who can't put solar on the roof to participate. But what we're seeing is that in the 500 kW projects that we have, the number of customers that are buying from those averages approximately two. And when I say approximately that, I'm rounding up. Sorry, I couldn't quite hear the first half of what you said. When you... I didn't hear the last half. If you look at the 500 kW projects in our service territory. Okay. The average number of customers buying from those is two or two. So not serving that purpose. That's not necessarily serving a household as a way for households to access it. Okay. Thank you. Have you looked at the bill that's currently written from finance and done with that on what will mean to your rain payers? In a sense of higher level is what the impact will be. Yes. The wording in this bill does not change the analysis that I did when I came in and spoke in order. Okay. That's in your package. And we're looking at a rate increase from between 4% and 11% by 2022. So it will gradually get to that by 2022. Yes. So it will gradually get there and then stop? By 2032? Yes. So it's important to talk about other factors 12 years away but on top of other factors in addition to... I mean that's some of the things that we talked about in finance. It's on top of already meeting the current and along with any other market fluctuations to work. I was in finance and Craig wasn't so the conversation there I just want to be clear the cost impacts are going to come every year. You can see on this chart it breaks it down year by year. We don't go for a rate increase every year. So we try to absorb those costs or do different things but we've kind of pulled all those rabbits out of the hat already. And do you know what this 4% to 11% rate was so owned by 2032? Are you saying year one you might have a 4% bump and then it would ramp until over that period of time you would have seen 11% increase in rates just this new require? No, 4% is if I use the low end of meeting our res which is 9 cents per kilowatt hour for a solar project and there's no transmission upgrades required. The high end is 11% and that's if we use net hearing and there are transmission upgrades required which Velko talked about earlier. So did that answer your question? Yes and I'm just trying to get it in my head down what does it mean to sell this bill? So if we pick a figure in the middle an 8% increase I don't know if an average bill is $80 in your region $100 in your region Yeah it's probably it's in the ballpark at 20 hours I don't know the exact average bill but at 600 kilowatt hours a month it's probably in the neighborhood So an increase? Yes Okay Any questions? Thank you for helping in I know it's very clear we're asked but perfect Next invite up Louise Bailey I'll just give you one minute to get your card copies for the carry-on and I'll put that right in Thank you for having me Melissa Bailey Manager of Government and Member Relations She's been previously testified to this committee on S-267 there have been changes so I plan to focus my testimony on the new language 11 municipal elective utilities that all operate on a non-profit basis all of the costs our members incur are passed directly on to great payers any value we are able to generate is also passed on to our community member and customers Sorry, am I controlling? Yes So we have just positioned on S-267 we're supportive of the tier one requirement as a reminder we spent a pretty deal of time in this committee discussing efficiency Vermont's potential to spend over several years on climate on combating greenhouse gas emissions and climate change this bill imposes costs that are magnitudes larger than that so we do have significant concerns about the magnitude of costs when they're this seems to be setting a state on one path for achieving some climate benefit and it's an extremely expensive path so again as a reminder the electric sector is extremely low so we're looking at getting the most bang for our buck so it supports other potential methods such as increasing funding for weatherization and other sectors of the energy economy there has been a good deal of testimony on supporting jobs and again we think that's an important goal but again in inventing policy we think that other alternatives should be on the table and should be explored so our primary concern with the bill as drafted as pass out of finance is this tier two dot little two the solar and storage mandate as drafted the bill says that distributing generations shall use technology including storage we read that as a definitive requirement for utilities to not only deploy not only double the tier two requirement which has effectively been solar but also attach it to storage utilities are already deploying storage and are already considering how to best site storage and best size storage to maximize grid benefits the best members are considering large scale storage at the substation level we see that as more cost effective and more beneficial to the grid than individual storage in residential units and so we're concerned about this this mandate that would essentially dictate where the storage could be located as well as effectively dictate the size because if you're there's a cap on the project size for your resources which is five megawatts so the storage accompanying that would most likely be small and again we do have the same concerns that Mr. Keeney highlighted around this language about maximizing resilience and maximizing the resilience that seems a little bit nebulous and be concerned about who makes that determination it mentioned the bill implies that storage smaller than five megawatts is more effective and that's not necessarily the case also requiring that storage be cited adjacent to generation does not necessarily result in the best grid location or areas of the grid that could accommodate more generation even out of the storage we have areas of the distribution grid that have capacity and we could add additional storage and there's not essentially a need for storage at those locations there are other in strange areas that could use storage even absent the addition of generation so we don't see a natural coupling between those two necessarily for grid benefit just another note that storage is already included as a tier three measure under renewable energy standards we do have some concerns about the duplication or overlap there I'm not sure what the utilities would be essentially explaining tier two and tier three credit for the same measures and with the expansion of the tier two mandate as written even absent storage citing these projects has become increasingly difficult that says in the process of deploying about 10 megawatts of solar finding locations that pass muster with the agency of natural resources where permitting is possible has become increasingly difficult and we're seeing projects commissioned through the standard offer program taking three years to commission to come online so we do have concern about even though the effective date I think of that the tier two expansion was 2023 we still think and that several years out we still think there could be some issues with timing and getting projects online and getting generation in time the chair's question we're in the range of 7 to 12 million and this is excluding our share of any VELCO grid-related costs which I believe DMP made reference to and you may hear more from VELCO on those but any of those costs that got passed on would get passed on to the VEPS members are not included in this estimate and this does not include the storage requirement which I think that language changed just a couple of days ago the transmission portion from VELCO on this estimate appropriated by a percent of load in the state and utility by utility yes that's exactly right I think they have a few different allocations but that's roughly correct and VEPS is about 6 to 70% of the state's load some of those costs I think are peak related versus energy related but yes, roughly proportional and I just want to mention that the cost-sinkered impacts for VEPS members would be partially mitigated by the hydro provision in the bill which would allow existing hydro facilities that are smaller than 5 megawatts that have acquired a new water quality to get from the state to be eligible as peer-to-resources the support of that provision we suggested that provision just as a reminder existing hydro is extremely important resource for the VEPS members we want to see those hydros remain financially viable moving forward to work with the REX those the higher value REX here a little high gross so currently those are low value REX those would just be tier one and what this bill would do is make them eligible for tier two once they've met essentially the modern water quality standards so that is a big differential between you know tier one REX or low VEP dollar so currently currently 30 or 35 for tier two the expanded tier two requirement we will see cost pressure on those the ACP is $61 for tier two essentially we think the effect of this new requirement will be pushing costs up against the ACP which is the maximum as written that's what the bill would be I have a quick question about the earlier slide in terms of what this will do to raise were you saying that you were mentioning that energy efficiency modernization will be doing here earlier this session so at least because that's trying to make it possible to fuel switch basically if that fuel switch becomes less and less financially viable what are you saying the cost purposes to that proposal yes we're looking at essentially costs in the electric sector this would be a big cost driver we're thinking 4-5% again based on the 7-12 million estimate that didn't include three costs so that's on the low end 4-5% increase in rates over the over the requirement period under one's electrification efforts and it's a cumulative effect I just asked I'm going to bring you my notes some of these budgetary shifts could be made in other areas as well you could make other changes that would lessen a great increase or maybe not even cause an increase I'm not sure what those changes I'm not sure you're talking about operational efficiencies I don't know I'm looking at things for some folks salaries those kinds of things salary increases that sort of thing I'm just going through these notes and I think we'll start doing that as a state we can ask other people to do that but we always deal any company is going to be here I would say that the municipal is not pretty low salaries there was not a lot of skin I don't know I'm not familiar with all our local government but I'd say those salaries are fairly low and then also if I may also just going through some of these notes tell me a little bit about whether or not you think this would make for a stronger more resilient grid this bill I mean that's another reason I think we really you know the committee really felt like this was a good direction I think the short answer no of prescriptiveness that's embedded in the bill really actually hinders the utilities ability to build resilience by having flexibility as I said to site storage where it's needed not where solar developers decide to put a solar project so unfortunately I fully sympathize with the desire to have a more resilient grid and our utility members have every interest in doing that they want to serve the customers in the best possible way but the level of you know I'm not going to have it I'm just going through these notes I want to make sure we can kind of have this full conversation that everybody hears that we also talked about in finance we fully support deploying storage I think it has a key role in improving the resilience we feel as though this would tie our hands on how it gets done resilience has got yourself a generator then you don't have to worry about when the power goes out let's have a good conversation it is a smart conversation to be prepared for all eventualities but I think what Miss Bailey is pointing out by the cost estimates that all the utilities and the department are putting out there in the millions possibly hundreds of millions statewide if we implemented some other tax or fee on Vermonters invested that same money in thermal efficiency that we would dramatically improve how we are addressing carbon emissions they're already low carbon we're going to add millions of dollars to rate payers for not that much benefit if we're chasing carbon especially at a time where people are looking at switch to electric vehicles and just to reduce the cost of electric vehicles that might just help is that close when you say this isn't the best way to address carbon attack in the electric rate payer yes I would agree with that and I think that Vepce's core position on this is that we should be looking at the most cost effective alternative if we're talking about spending millions of dollars hundreds of millions of dollars close by saying we have concerns about the process I think a previous version of this bill included a comprehensive study that could be completed over the coming months prior to the next legislative session and we would fully support that we could bet some of these cost and benefit estimates there could be greater transparency around the financial implications and so we would be supportive of that process before making such a sweeping change on the improvement from zero to two to twelve where where are your members pardon behind my question is is there urgency like where are we on that timeline I would say there's not urgency I believe most of the utilities I know that some members are in the process of deploying 10 megawatts of solar one of the projects has come online this fall and essentially in order to achieve economies of scale utilities built projects that would satisfy the need right we can build for the 1% requirement in the first year we've built for the projected 10% requirement in the out year which has resulted in a small excess of generation in the early years of REZ compliance and then there will be a gap at least for VAPSA coming in the late twenty twenties we will not have completely satisfied our needs so in terms of urgency I would like to make the current REZ requirement obviously net metering is a big variable there and I would say that the outcome of this bill as drafted would result if the hydro provision remains intact and the storage plus solar mandate is included essentially all new tier two resources need to be accompanied by solar the result of the VAPSA systems would be selling the REZ from the solar projects that we already have deployed because they don't have storage with them and then starting again from scratch building projects with storage so the benefit the environmental attributes of the existing projects that we just spent the past three to four years building would be exported and we would start again deploying projects that came with storage Any other questions? Thank you very much, James I'd like to invite I don't know where that would go I don't know I'll take that seat Is this a twister? It's a twister We use it on chairs That's how we want it to be Hopefully it's a game operation Okay We're open to amendments We're just talking about the issues That's a good idea Thank you We're on a double time Yep, I'll be quick Ed McMurray, director of planning for the Department of Public Service Quick overview the department strongly supports 100% renewable energy standard including a requirement for new generation We think it can be done in a way that actually promotes public policy Policy should be informed by analysis What's happening with this bill? It's changing pretty much non-stop There's been no actual cost analysis except for things that have been done on the fly Additionally, repair costs should further clinicals rather than benefit for profit corporations The way that this 100% design essentially takes what you've heard tends to hundreds of millions of dollars from repairs to other developers with minimal benefit for the public 100% renewable energy standard Lots of different ways to achieve this Other states have done 100% It's definitely possible Things that you need to look at existing versus new basically tier one versus tier two Regional versus in-state And noting that the cost of design options can vary significantly because of getting up to 1200 megawatts of solar So far what we've heard Every version of this bill the tier two requirement doesn't really increase for a couple years So it's actually plenty of time to study It just appears to not be a desire to actually understand the costs And from the department's view it's better to make an informed decision first instead of hoping that someone else fixes problems later down the road So the department proposal that we put forward in the Senate of Finance would commit 200% renewable energy standard and allow time for an actual informed decision The department would conduct a study look at design options and provide a report on costs and benefits by December 1, 2020 It's actually a pretty heavy lift but we can commit to doing that We think it's important for the public for ratepayers to understand what the costs are and allow time for the development of the bill and thoughtful consideration and discussion Also it would allow the legislature to be transparent about the costs they are imposing on electricity So what we would consider studying or what we would propose to study the costs and benefits of alternative design options again existing versus new regional versus in-state Also try to understand there's been a lot of discussion and provides all these benefits and try to understand that Vermont does not make solar panels or inverters, which is a significant portion of the capital costs of any solar project so that's money automatically going out of state Obviously there's tax benefits and other benefits of in-state generation but try to actually quantify what those are Also understand there's a connection between electric rates and electrification The electric sector accounts for roughly 2% in 2018 of carbon emissions So thermal and transportation use over three quarters of the carbon emissions We need to electrify We need to do electric vehicles We need to do heat pumps If you increase rates by 5% every year for years, you're not going to do that It's pretty simple Some customers will choose to electrify based on climate concerns Most people cannot afford that We're going to have to actually look at the cost effect It's also important to understand what we've heard about the connections between net metering and tier 2 the standard offer programs When something else that hasn't come up yet is there's three utilities for Lincoln Electric, Washington Electric and Swam that are currently exempt because they're 100% renewable There are many of these tier 2 costs that we've been talking about Going forward, we should look at if all utilities are going to be 100% renewable should that exemption remain So, impact of doubling down on solar When you do a carve out for a specific resource type it's basically saying resource can't compete on its own when it's saying great hairs you're going to air the risks of those competitions that are for profit entities So that's essentially what we're getting here We've heard a lot about the significant cost associated with power supply and transmission and distribution costs And also as Bailey mentioned the storage department In the department's view that's essentially acknowledging that you're mandating a problem and then mandating further costs to then fix the problem by requiring storage These mandating the problem would that mean that they're transiting over the option so you're going to store Exactly That to accommodate that much storage on the grid you can either completely over build the grid for that for hours of the year or you can install storage So the power supply costs Mr. Castingay touched on this a little bit and Ms. Bailey as well Once you actually have state policy is basically mandated kingdom community when long term contracts with a lot of renewable resources What happens when these utilities have to take all the solar they have to sell that power because they have to take the solar So they're selling all that other renewable power and they're selling it at a time when the wholesale market is at the lowest and then when solar is not producing in the winter they're at the highest time or you're basically telling utilities to sell low by high Also net metering Net metering is a component of this the PUC in looking at net metering rates has said net metering is a component of tier two So if you double tier two you're essentially sending the signal that PUC increased the amount of net metering In 2018 this is just GMP alone the above market costs and this is above market for new renewable was 35 million dollars just three net meter that's one year that's just the cost shift and that's the cost shift just the additional and necessary cost for net metering transmission cost you've gone through a lot of this VELCO gave an estimate of 900 million dollars for battery costs transmission costs up to half a billion dollars and at least VELCO was saying that you can have the minimal 250 million dollars in transmission costs if you site appropriately but the bill as it is now does not provide the PUC with any tools so if you look this I swiped this from the VELCO Lumberage Transmission Plan and the presentation they gave I believe here a couple weeks ago this is showing the red areas northern Vermont basically don't put any more solar if you're serious about well-sated solar then you need to give the PUC tools including saying don't put any more net metering northern Vermont so somebody's been saying that for several years now so there's a question about about resilience and this bill does not actually do anything for resilience so generation imagine I should have actually made sure I could pronounce it basically by mandating a monocrop of solar all over the place you're actually reducing resilience if you think of my background was actually ecology before I started doing energy so what you learn is the larger of an area a natural area the more diverse the more species within that area or sorry the more resilient that area is if you basically have a backyard with an apple tree and a rose bush next to it it's not particularly diverse so by saying let's just have lots of solar and storage you're not actually increasing any diversity there is resilience for the people who can afford to put in the Tesla power walls and if you actually do have a well-planned micro grid well-planned being you'll get what's a warmer area in Vermont so if power goes out in the wintertime people can stay warm you look at emergency services making sure that when we have electric ambulances they can actually charge you identify specifically where these microgrids and where the resilient storage needs to be I guess my point in that was a little bit correct me if I'm not being powers going out of the out of the state like we're getting from other areas isn't it isn't in a way more resilient to sort of keep it here dollars here that kind of thing economic resilience and also keeping sort of our own power local so that's what I was kind of so you're not talking about technical resilience well also technical resilience or at least I mean so one of the things we were talking about in finance is how can we keep stuff you would think that if it's local we're going to be able to fix it we're going to be able to deal with it if it's sort of losing something if we're relying on another state or another country for it that's kind of what I was getting at sorry it's just another suspecting those kind of sorry no I don't understand your I don't understand the look or the help me out I'll talk offline on that so first that's majority of outages on the transmission level there's federal reliability standards so if you look when you're driving down the road when you see a bell go right away 150 feet of clearing around those lines when you drive down the road there's barely anything I mean that's a policy choice you don't want to have massive tree clearing costs and people don't want to live all the trees in the front yard so because of federal reliability standards you've got massive redundancy in the generation and transmission system operational level so you're actually relying on a regional level which we've done for decades does not is not less resilient in trying to produce everything through one resource and storage in state so the most recent bill sort of seizes on an existing repair select safety valve and basically what that says is once you get to the maximum possible cost of renewable energy standard then you can actually look at potential ways to mitigate those costs it's also a little bit confusing because the way the bill is written it has two tier twos with two different safety valves and it's not entirely clear when a project is under which one so that creates I think some confusion at least from a regulatory perspective safety valve is essentially if you reach the ACP and the costs are greater than the PERPA costs then you can potentially you can petition the PUC and say for the next year let me instead give generation from and this part gets really today I have not yet understood how this actually works and it's a little concerning because I'm not the brightest but usually get what's in the bills and I don't understand how this works it looks like it's actually saying if you get to the maximum cost in terms of the ACP and alternative costs for building a base base solar project then you can instead get the power from a larger in the state and that's still too expensive from a larger regional at least that's how it was described in the set of finance I don't read it that way in Brazil and the fact that the bill is the only safety valve for costs is extremely unclear overall it seems to be that the next one just before we go on it's a great protection at the very top and that always gives me a concern we've not really heard from any low income advocate or anybody that the proposed rates are going to affect is it my understanding that the department is actually the only real defender of rate payers in the state right now we have no rate near advocates but that's part of the departments the department's role is both planning which is my function and rate so we're housed within the same agency we do represent and to be clear when we represent rate interest we're not saying lowest possible cost no matter what we are saying lowest cost to meet the goals set by the legislature in this case that includes climate goals, carbon reduction renewable goals we want to do that we want to meet it at a lower cost than this bill provides also should note that every utility argued against this bill and the way that the law is structured is utilities are allowed to simply pass through the renewable energy standard costs so they're held harmless by this so they're actually coming in here they're not personally affected by this their rate payers are affected so they're coming in in this case to represent their rate payers is the bill consistent with 218C cost? not at all not in the least so overall it seems the way the bill is structured now is an expectation that there are significant costs and some problems that can be fixed after the fact and instead of actually coming up with an informed and thoughtful decision with full information as to the costs and benefits instead pushing something through hoping that the future legislature fixes any problems and the final question is once you actually put a subsidy in place how often does it get withdrawn so that's the department's concern about pushing something forward now and then hoping that maybe we can fix it later a case of that going on right now I'll call this the writing question and I just know that committee knows I asked if he and the department could put us together a list of power producers and the cost because you know center mcdonnell has continued to rail on the ride gate power plant which is by far not the most expensive power or the most heavily subsidized power in the state and provides multiple other benefits that other power producers don't produces a market for low-paid wood but I think center mcdonnell has continued to mislead people about how expensive and subsidized the ride gate power plant is so I'd like this committee to actually understand it it's not a tax member so they're not here I would do it if he was there I don't know that way so if I ever mention the power right any other questions thank you thank you I can't I can't thank you and you know I've been saying to folks if you come with someone and you want to have you know excuse me this is moving on I'm not touching that do you see that is there a mouse over here it was trying to open two computers is the future we're glad to sell there's nothing to be long I don't know just you don't have a power plant no, what I feel helpful is I did send you one chart that said current power let's see electricity by type is that it? nice job chief fabulous can I just also say doing an incredible job all of us getting thrown at her thank you so much for the record my name is Olivia Campbell Anderson I'm executive director of renewable energy Vermont first I want to share with you a business letter support from more than 170 businesses across the state supporting this legislation and increase local renewable electricity and increase resilience I want to talk about the cost from having a non-resilient grid cost controls in the current law that you all have worked on tools to optimize the grid that are in the bill and important language of what the bill actually says so I here is a here is a fact sheet about the bill and as I let's see Synapse Economics I think many people in this committee are very familiar with Lisa Hens who previously who drafted the comprehensive energy plan that the state has and previously led planning at the Vermont Department of Public Service Synapse has done some analysis related to the cost of having a non-resilient grid and what's going on on the system right now Green Mountain Power customers are paying every single year $25 to $70 to just deal with responding to major storms over the last five years between 2015 and 2019 GMP customers experience costs of $300 million due to power outages of this about $50 million of that was due to major storms that we've experienced and $250 million is due to minor storms we have a as climate change is here we are already experiencing these impacts with more frequent storms and more intense storms some of which are sort of even micro episodes of weather which we are thankful that Green Mountain Power has taken significant leadership in trying to move ahead with creating a more resilient grid with local storage on the distribution circuit side when you put these direct storm costs in combination with customer interruptions and how that's affecting local businesses storms and outages are costing GMP rate payers $307 million over the last four years for an average of $75 million per year that's more than 11% of Green Mountain Power's total revenue requirement annually today it's at least three times as much as the Department of Public Service estimate of the statewide cost of tier two and it's about a quarter of the state's transportation budget just to put these numbers that you're hearing into some perspective I will share the details of this analysis and if you have any questions we'd be happy Mr. Hawkins is certainly available given that he crafted the original law with you and has done significant analysis to participate by phone I am actually now going to share this is a fact sheet that has information of citing the existing laws that you all have worked so hard on to control costs ensure appropriate utility planning at the least cost integrated plan and also the Public Utility Commission currently has its disposal which it is utilizing to maximize the grid optimization and discourage projects in areas where it's not economical to do so meaning there's been a lot of numbers thrown out and a lot of scenarios there are existing laws on the books which you have detailed in this fact sheet where the PUC actually is using those laws now to say to projects that are not in the rate payer interest and not in the public benefit because of economics to stop those and so there are interconnection rules and I just want to be very clear there's a lot of numbers being thrown out and a lot of questions about who pays for what every time a new generation project comes onto the grid the person who is applying for that project pays all of the costs for interconnection this is current state law it is a requirement can I interrupt you one second you're shaking your head is that not accurate interconnection not all the costs I'm confused by that so let me clarify so the public utility commission rule 5.100 governance interconnection to the grid in the state as you can see which I have quoted in detail for you including the citations in this handout what's being said isn't that they're not paying I don't think it's that they're paying for interconnection interconnection is a small part of the overall cost so projects this rule requires the installer of the projects to pay for all upgrade costs identified by the utilities in the utility studies rate payers do not pay these costs I would be happy to but there are still there are still other costs if a solar developer proposes a development and it goes through the PUC and it gets denied there are still costs incurred by the rate payers of the state of the moment so what I am trying to address is the question related to who pays for grid upgrades for every single generation project in the state and that is not the rate payers unless that project is owned by the utility so the interconnection process requires the applicant pay the utility for the utility to study the grid the impacts at the distribution level and the impacts at the transmission level then the utility identifies any necessary upgrades if any that are required and presents as part of that report an estimated cost at the time of the process that sheet goes to the project applicant and it is the responsibility of the project applicant to pay those costs as well as to pay for the cost of the studies should the project go forward and as part of the CPG process which is the next phase all of this is reviewed by the public utility commission and the public utility commission I have cited here current law that you have written does not allow the PUC to approve a project if it will result in an undue adverse impact to the electric grid it also requires that any new project be served economically these are quotes from the existing law that you have written economically by existing or planned transmission facilities without undue adverse effect on Vermont utilities or customers so this is the existing law for the processes that every single project in the state is required to go through and who pays for it so you have these these are statutory references and I'm sure that the public utility commission could speak to the cases which I know Senator Rogers you're quite familiar with where they have rejected projects and as a result in the SHI territory there have been no projects approved for the last two years so we have a lot of existing there are a lot of people around the table shaking their heads on some of this stuff so it's very concerning it's very concerning so these are just facts and I encourage you to defer to your legislative council regarding what the existing law says so it's important I just want to wrap up here and say related to a lot of the testimony that was heard by the senate finance committee has was represented to you again today there was not a lot of a change in the bill was related to energy storage we haven't had time to talk about energy storage in this committee can I be happy to have anyone come and talk with you about that here's a fact sheet for you listen do you want me to pass it this way I don't want any more of these facts at this point thank you sorry so related to energy storage I would you know I do concur with some of the testimony from Mrs. Bailey at VIPSA is that as part of addressing some of these issues about having a more localized and more resilient distribution grid I would recommend that the committee look at the language and change the shell in the storage to a May because making that small change and the existing bill would address many of the concerns that you have heard around requiring storage with every project I believe that that was unintentional looking to send a campaign but I think that small change could address these concerns again it's very important to look at what the language of the bill says versus what many people are testifying with what the bill actually says so if you have any questions happy to answer those and also again happy for Mr. Hopkins to testify and talk with you if you have any questions thank you very much with that would you move on to Mr. Nell from the POC thank you Elizabeth Schilling let Elizabeth take the chair you've got that chair absolutely a little puzzle we're moving one tile at a time good morning again good morning again position for the matters I'm a staff attorney with the Vermont Public Utilities Commission this morning is Tom our policy director I'll keep the camera from the marks very brief basically the commission has significant concerns about potential rate impacts requiring utilities to satisfy renewable energy standards with an additional 10% of in-state distributed renewable generation and it's the commission's belief that the state's renewable energy goals can be mapped through other expensive means looking at the bill itself the commission just has some concerns about some of the structure and clarity of various provisions in the bill including the sentence that's been testified to quite a bit already I believe it's on page 3 I think it will be on line 15 of your version of the bill and states this distributed renewable generation shall use technologies including storage that maximizes grid resilience and shall be located in a manner that maximizes grid efficiency this provision is in the compliance component of the REZ this is not one we're looking at in approving projects at the beginning of the process so utilities have to comply with this after projects have already been approved utilities have to take net metering projects this provision doesn't guarantee that those net metering projects are located in an efficient way or that they include out of storage I think there's just a concern about whether this requirement is placed in the statute so those are my comments Tom I have a few notes from a draft in the bill I was given to me mid-morning yesterday so I'm hoping that's the same version that everyone else is working on one observation I had was that the timeline for the tier 1 100% requirement concludes in 2030 but the DG portion of the bill continued to conclude in 2032 I wasn't sure if that was the intent or whether there just needs to be some consistency added to the editing or review of the bill it might cause some other moments for utilities who have to be 100% into maturity but won't continue to add this period of generation in subsequent years there's a section pertaining to interconnection maps and I will defer to the utilities to to their concerns but I just want to make sure that the provision of interconnection maps wouldn't require utilities to disclose anything that would be CEII subject to what that means, good energy structure and information and then there's also a section 3D that would have the PUC conduct a report I just wanted to note a couple things first the interconnection rule is currently being looked at by some of our staff so it's already under review I don't know if an additional report to the legislature would change the outcome there or whether we've added more information certainly Alcarna will be seeing that rule at some point and then the other note is with respect to how to improve the section 248 process I don't see how section 248 is related to helping developers identify the locations on the grid that are most beneficial or minimize costs it would seem to be that the developers would want that information prior to engaging in or going down the road of section 248 so the mention of section 248 seems to be placed to me certainly and probably everyone in the room would like to see the generation placed in the best spots I don't think that information goes forward in the most productive way in section 248 and then I just echo others who would recommend that as you're carrying this policy that you really analyze what are the costs, what are the benefits and what are the goals if the goals are climate carbon reductions I'm certain that there are multiple ways to achieve those goals if the goal is jobs creation again what we get but it's the best way to achieve that I don't think that's general information so I can't really weigh in on that right now I know that as a prior witness I had some mentions of what the PUC is doing I may be willing to answer any questions that you have but I may not because I wasn't preparing to answer those questions my sense is when we did act 174 the goal was to have well-cited generation and well-cited we had two components one was around aesthetics and planning and that plan also the goal was also from an engineering perspective low generation minimizing infrastructure investment upgrades that would be required to add more distributed generation for instance I'm not sure that the process would go forward achieve that engineering piece as well as if we looked at pricing related to preferred locations and that's from a town perspective I'm seeing in retrospect that it seems as though the towns are more interested in aesthetics rather than engineering I would to participate but in general I think I would agree with your summary well yeah I think developers are attracted to a cheap land where they can develop PC and not attracted to places where there should be sightings and that's part of the problem and I believe when the previous witness said there have been no developments in the Shiai people from the department were shaken their head which I think means that that was possibly inaccurate and it's been my feeling for several years as the committee knows that we should have done something about that and we should not allow further pressure in areas where renewable resources are being shut down every time the sun comes out because there's too much solar energy there because there's cheap land there's still people trying to develop there so anything more Mr. Nour okay I would add I know that there was at least one case a large case that was denied in the Shiai region my understanding and I haven't done the homework I wasn't prepared to answer this question but my understanding is that the utilities are objecting to larger projects that are created in 150 kilowatts but they have been projects on 150 kilowatts below that have improved their access well and I think it puts the utility in a top position trying to fight everything but I think it's clear that at this point that area doesn't need any more 150s either thank you very much so we're pressing along we're going to run over I'll ask our final witnesses to keep up the pace like everybody Mr. Walsh I'd like to join thank you Ben and Julie Walsh with Veper for the record so thank you for taking a moment here from representative of the environmental community this morning I recognize that time is brief in this committee checked with several of my colleagues and Vermont Conservation Donors Natural Resources Council Conservation Fundation and Vermont Social Responsibility all said that I could to a degree speak on their behalf which I certainly appreciate so I just want to start by saying that Veper and those organizations are strongly in support of and additional components of in-state generation to complement and move to 100% renewable electricity our feeling is that if we are using energy we have a responsibility more of it here I would argue as much as we can I don't think this bill goes nearly there but it's a step in that direction and that if we are moving to 100% renewable electricity some of that should be coming from more renewables being built here in Vermont I'm not going to belabor the points that have been made on good resilience economic development except to say that switching one imported energy source fossil fuels for another one is not actually keeping more money in Vermont and certainly I would argue that that should be a goal, not the goal this is primarily a climate bill but having 10% additional in-state is consistent with economic development goals the state has and actually I'll get to this in a second and I will be brief but if done carefully I agree it was not done carefully this is not going to be achieved but if done carefully and thoughtfully this sort of build out of in-state renewables should and can increase the resilience of our communities or state and our electrical grid can I ask a question on that before we go on because Olivia also mentioned that but yet the department and utilities totally disagree and I don't know if solar development is going to get power to a house if the line is down that's a great point so a couple of things I would say to that so one having some additional generation of any kind in Vermont would all other things being equal make it more likely that power would be available here rather than being able to lie in on imports just all things being equal and there were many cases where there were not features why just so many other folks in the business disagree with so I actually agree with a lot of the comments that were made about the way this really is at the moment drafted as it relates to energy storage and grid resilience doesn't actually get there and doesn't achieve that goal so one the Shell that's in the Tier 2B section on energy storage I agree that it's descriptive and I agree with Miss Bailey from DPSA that in many cases that's not actually where you want in some cases it is in some cases it isn't and the point that was made around microgrid being designed around energy storage in DG it's also very relevant to this conversation it's not achieved simply by saying Shell everything has to do this so some way that Miss Campbell Henderson raised it could be something else but speaking of that and then I'd also say the study at the end the recommendations rather at the end that are specific and exclusive I believe exclusive to section 248 I agree with the PEC's testimony that that can and should be broadened to look at other tools that could direct where DG and storage are actually placed and that there might be some opportunity to expand and strengthen that language to look at this picture more holistically rather than looking at that one tool in isolation a nice quick question is there a process underway and where do you know of that or other tools I am unaware of any that doesn't mean they're not happening to people and I've been very focused on this building not so much across the street for the last number of months so apologies for not being able to bring that information a couple of other points I want to make and then one particular thing just took one of the pieces of PUC brought so one this question of resource diversity is this solar requirement it obviously is not it may functionally become one I understand that however that is in significant part of the result of other decisions that the state has made about other resources in the past so we can revisit those decisions and look at other resources but I don't think it makes sense to sort of shoot the messenger like we are stuck with solar as the tier 2 resource because of the policy decisions the state's made so Miss Anderson was on VPR and said that the cost of solar is going down so because the cost is going down all of your groups are going to support the PUC in lowering the cost of net metering because that's where it's not a solar per se if solar is done through a power purchase agreement it can be very reasonable but we all know that solar net metering is a power that we're putting onto the grid right now so I'm just wondering if all the environmental groups are going to support the PUC lowering what we're allowing the subsidy the cost shift to be on the net metering that's a great question I'll say three quick things to it one, I were very supportive of Act 99 of 2014 that set the process in place that allows the PUC to lower rates or raise them or do whatever they think is appropriate to the criteria of that law two, we have been supportive of a cautious ratcheting down of those rates over time and the question really is about the pace if the pace is so dramatic that we are now excluding from honors who can't build 5 megawatt projects themselves from taking part in this then that is concerning to us that there needs to be some sort of a venue where individual from honors businesses can actually go and be part of this revolution on energy themselves, so yes we're supportive of reductions that can't be a particular future reduction that they may propose the last thing I'll say on that is we also were one of the first organizations along with some of the other organizations I mentioned earlier that brought forward the preferred locations concept in the proceedings of the PUC and in this committee and another bill we felt like that was important because we were hearing concerns at the time about citing and about this being moved towards clean energy overly reliant on fields that farmers were leasing and so but a side effect of that has been that larger projects basically above residential sites have largely been driven to those preferred locations Brownfields, Gravelpits, Williamsville, Spartanles, almost all of which are more expensive to build and so if we're looking at you know we really want to pull down the costs then there are a few dollars you can turn you can open up some version of easier to build, cheaper to build projects in some green fields you can reduce permanent costs which have been increasing over the last number of years or you can allow larger projects. So your groups though don't take into consideration the cost shift to rate payers I would disagree with that characterization I think it's one of the variables that we have to consider when we're looking at whether or not to support anything in the energy space in the electric space. I'd like to just say I know your time is short I don't want to cut this conversation over so you can close on 267. Yes the last thing that I wanted to say is the point that was raised around CEII or other federal regulations around information that can be shared on the grid. There's actually a language in Act 170 of 2012 around the standard offer that very specifically laid out that that shall not run out of any of those kinds of requirements so that could probably be lifted and applied to this study as well. So that's like a data security provision Essentially I'm not deep on that but there are reasonable restrictions at the federal level from a terrorism standpoint, a security standpoint. We don't want to share too much about our grid and where it might be Thank you very much I'd like to invite Ms. Motel Here you are Thank you Thank you for having me I don't know if you were here when we started She was Good morning Question number one My name is Shayna Luzel I work for Vermont Electric Power Company I was part of the Velco team that coordinated the 2012-2015 and 2018 for the Long Range Transition Plan We're currently in the process of developing the 2021 Long Range Transition Plan My colleague, Collin's Presumé was here on February 14th giving an overview of Velco's grid particularly around the requirements that would be necessary to secure significant amounts of additional in-state renewable generation So Velco has been providing information about the optimal location for siting renewable generation since 2012 to the first time that we began to see an area in the northern part of the state that we had reached its transmission capacity And our message then was that location matters New generation can aggravate reliability concern if it's installed in the wrong location So just jumping straight to the point that we're low on time among the strategies to have the greatest effect to lower costs is to have generation in places that can cause the least harm to the transmission plan In 2018 well since that time of 2012 when we originally released the location matters map we've been working with to the extent possible the large renewable developers and provide guidance system strengths and weaknesses and identify problematic areas such as the Shi'i area and we haven't been entirely successful I mean to be blunt, generation goes where it wants regardless of grid impacts And in 2008 in the most recent we saw to directly inform policy makers about what the grid needs to look like for the policies that are being contemplated to be put into effect In building off that work and updated to reflect this bill we developed pre-transmission cost scenarios a high medium low it's the low end of $150 million in transmission upgrades and the high end being $500 with a mid scenario $300 million to accommodate an increase in in-state renewable generation so this high cost scenario to low cost scenario there are a lot of assumptions that go into that we started working with our consultant that we developed Vermont's long range forecast for all of those long range plans we started working with them to start doing some preliminary analysis of what the 20% additional generation on a grid would look like and to see where those upgrades and costs associated with those would be Largely speaking geographic solar PV siting if left unregulated in large quantities of solar installations continue to take place in the northern northwestern part of Vermont this would lead to high cost scenarios there are also some assumptions about battery storage does and particularly around the larger ISO New England projects with large merchant generation being cited in Vermont on the low scale about $150 million geographic solar PV siting is regulated with large incentives and penalties and large quantities of solar installations would take place in southern Vermont as depicted in the map and so Matt Amara has shown his slide presentation we discussed last month in the New York area from a transmission system reliability and cost perspective there's three real cost drivers for us as we develop these scenarios the first being a stronger requirement for generation to provide transmission and or distribution upgrades to provide grid benefits not burdens to the system and density of storage and specific purpose for which it's being used and lastly the dependence on the need for additional transmission upgrades and that just remains to be seen and I think it's important to note that in any scenario we will have to do additional transmission work because these are the variables in terms of what drives the cost I think lastly these initial estimates as I said are preliminary we hope to continue to work with EITRON and in coordination with the department and other stakeholders as we continue the analysis for the 2021 long range transmission plan to do a deeper dive into this analysis of the true costs so when you were talking about transmission are we talking about reconducting blinds and does that change substations long way and basically do you have the thing I'm trying to understand is if we're adding hundreds of megawatts of transient power then does that change the nature of what's moving in your system and how much capacity you have to have to move that around to maintain a stable grid I think that is absolutely one part of it blind reconducting could be one upgrade I think that there are other options to upgrades depending on what the project is any other questions for thank you thank you very much alright so thank you to everyone who work promptly through testimony we're going to take a 10 minute break and go to another topic