By Rob Roper
Green Mountain Power recently announced the need to raise its rates by 5 percent. Why? One growing reason is Vermont’s “Net Metering” program.
The way net metering works is, in a nutshell, electric customers who generate their own electricity, usually through solar panels, can sell any excess power they create back to the electric company. The company is mandated by law to buy it — and here’s the cost driver to the average ratepayer — at 21.8 cents per kilowatt hour. This a significantly higher price than electricity market price for electricity. Hydro Quebec electricity, for example, costs about 6 cents per kilowatt hour.
The Net Metering program was designed to make it more attractive and cost effective for people to install “green” energy technology, so, in that sense it works as intended. The problem is that this rob-Peter-to-pay-Paul scheme makes it less attractive and cost effective for everyone else to power their homes and businesses. Is this fair? We are the ones who are ultimately being forced to buy this wickedly expensive electricity.
As net metering has expanded in Vermont, the amount of overpriced energy in the system has increased. According to 2016 numbers (the latest available), the percentage of net metered energy of all power purchased is 1.73 percent, but the cost of all net metered energy purchased is 6.26 percent of the total cost.
If the Net Metering program is allowed to continue and is encouraged to grow, this math and our electric bills will only get worse.