Editorial: Solar project shows need for revised state regulations

New Haven’s planning commission is asking good questions and hedging bets on an uncertain energy future by asking the developers of a proposed 40-acre, 178-panel solar installation — which would be one of the state’s largest — to provide guarantees of its good intentions.

With British Petroleum’s Gulf of Mexico fiasco (and Vermont Yankee) in mind, the planning commission is rightly concerned that Cross Pollination LLC, owners of the proposed solar project, would actually have the financial means to follow through on what they say they want to do. In particular, those issues include developing an organic farm on the remaining 140 acres of the site that would be used for raising beef cattle, sheep and small vegetables.

The commission is also right to push for guarantees from the company (or Public Service Board) to set aside a decommissioning fund to be used at the end of the project’s life span; reduce the glare from the panels; and create a fund to compensate neighbors for any devaluation of property (modeled on the Good Neighbor Fund by GMP) to “make whole” those parties adversely affected. The commission is also wise to reserve the right to comment on a proposed upgrade of Green Mountain Power’s power lines, whose plans have yet to be discussed with town officials.

While the Planning Commission was cautious in its effort to cover all potential liabilities, it also sent a message that the project — in concept — seemed to fit within the town’s plan and, in fact, could provide a viable model for what rural, mixed use agriculture could look like in the not-so-distant future.

“I think we have to look forward, and not back,” said planning commission member Francie Caccavo. “If we think about farms in the future, what are they going to look like? How are they going to maintain themselves … I think there is some responsibility on the part of the public to address renewable energy. It’s got to be somewhere.”

Fair enough.

But tough questions also have to be asked as the state begins to adopt a new energy future: one in which smaller projects are going to take the place of a few unseen, major players like Hydro-Quebec, Vermont Yankee (most of us rarely see the plant or experience its environmental impact), and the coal- and gas-fired plants of elsewhere in New England that provide the other third of the state’s energy mix.

In fact, the state should have been having such discussions over the past several years before alternative energy projects were knocking on the door.

As it is, the Legislature has adopted subsidies to fuel alternative energy growth, but have not provided ways by which towns, in particular, would be given incentives to accept the risks or safeguards by which to mitigate those risks. One issue in New Haven, for example, is the question of assessed value for property taxes: Would it be on the value of the power produced, or the $7 million to $9 million cost of the solar project, or some other valuation; and how quickly would it be depreciated?

Whether there is a need to establish a decommission fund is another example of a question that, as yet, has no answer but is crucial to determine because no one can know if this — or any — proposed solar project will remain profitable once state subsidies are phased out.

As importantly, the Legislature needs to revisit the process by which it awards bids. Currently, the bids are chosen by lottery — which removes any allegations of favoritism, but promotes mediocre projects. That’s so because establishing a site, getting ownership rights and filing an energy plan is a time-consuming and expensive process that has a high risk (about one in 10) of failure simply because the state picked someone else’s number. Why do the best job possible to pick a site, negotiate with the land owner and develop a plan, in other words, if it all comes down to a lucky draw?

A process by which the PSB, for instance, reviewed all 180 potential projects and selected the top 25 percent based on merit would put an emphasis on developers choosing the best location, with the least impact on the environment and the best economic gain for the respective towns and state ratepayers. Of those 25 percent, then, the state could set a lottery to award however many projects were within its budget. (As it is, if a developer is awarded a bid, then learns of one, two, three or more sites that are far better, the developer doesn’t have the freedom to make that adjustment. As a process, that’s dumb and certainly doesn’t promote the best thinking or best outcomes for the state.)

What’s important to consider is that Vermont is at the beginning of a new era in energy production — by subsidizing alternative energy sources — but has yet to adequately modify its regulatory process to meet those changing needs. The next governor, lieutenant governor and legislative leaders ought to start thinking about those needs now, so they can address the issues early on in the next session.

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