Governor Phil Scott Signs VPPSA Rate Flexibility Bill

FOR IMMEDIATE RELEASE
April 30, 2021
For more information: Julia Leopold
jleopold@vppsa.com  (802) 884-4488

Waterbury Center, VT (April 30, 2021) – Earlier this week, Vermont Governor Phil Scott signed bill S.60 into law. The new law provides cooperative and community-owned public power utilities with the ability to make minor adjustments to electric rates and provide customers with new, innovative services. The legislation, sponsored by Senator Ann Cummings, is the result of collaboration among electric utilities, state utility regulators, and Vermont legislators.

Prior to the passage of S.60, all electric utility rate adjustments and pilot programs were subject to formal reviews by state utility regulators. Often lengthy and expensive, this review process also presents a hurdle to utility innovation. The new law gives public power utilities the authority to implement rate changes up to 2% each year without undergoing the traditional reviews. It also allows utilities to pilot new services that advance Vermont’s climate requirements without being subject to a formal tariff review.

“The energy landscape is evolving faster than ever before,” said Melissa Bailey, VPPSA Manager of Government and Member Relations. “Each traditional electric rate review can cost utility customers over $45,000 and take many months to implement. This new law could significantly reduce the time and cost of deploying new, innovative electric rates.”

Utility regulators will maintain oversight under the new flexible ratemaking structure. Utilities must provide written notice to the Vermont Department of Public Service and Public Utility Commission 45 days prior to implementing a new rate or pilot offering. The rate or pilot will only proceed if regulators do not raise an objection. A full, traditional review of utility rates will be triggered for individual rate increases over 2% or after a utility’s cumulative rate increases reach 10% since the last state review or if a decade has passed since the last state review. Regulators also have the authority to implement the full review process any time an objection is raised against a utility proposal.

“Regulators will still have all the same levers in place that we’ve always had,” said Riley Allen, Deputy Commissioner of the Vermont Department of Public Service. “Our role is to help utilities deliver safe, reliable, affordable, and environmentally sound energy. Electricity consumer requirements are changing and presenting new challenges for our utilities. The regulatory environment is also ready for some change. We believe this legislation strikes the right balance between valued traditional regulatory protections when compared with ratepayer interests in lower administrative costs, more flexible and responsive local oversight, and opportunities for greater innovation.”

The municipal and cooperative rate flexibility law goes into effect July 1, 2021.

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VPPSA provides municipal electric utility members with a broad spectrum of services and solutions, including regulatory assistance, financial planning, and power supply. VPPSA members include Barton Village, Village of Enosburg Falls, Hardwick Electric Department, Village of Jacksonville Electric Company, Village of Johnson Electric Department, Ludlow Electric Light Department, Lyndonville Electric Department, Morrisville Water & Light Department, Town of Northfield Electric Department, Village of Orleans, and Swanton Village Electric Department.