Dive Brief:

• The Vermont Public Utility Commission (PUC) issued an order Monday, providing guidelines for alternative regulation proposals it says are necessary in order to continue advancing the state's energy goals. 
• The proposals must advance the state's energy goals, be open and transparent, enable innovation and benefit the consumer, according to the order.
• Vermont has aggressive renewable energy goals and is considering a range of solutions to achieve them. The PUC's order concludes a workshop process launched by the state's Department of Public Service to review emerging trends in the utility sector.

Dive Insight:

For decades, with some occasional deviations, Vermont has used a "cost-plus" form of ratemaking, involving a rigorous examination of utilities' costs and allowing a reasonable return on its investments. While the state is clearly open to new ideas and has approved them in the past, the PUC's order aims to put alternative utility proposals on equal footing.

"Just as we encourage utilities to propose innovative solutions to achieve those goals, it is imperative that we, as regulators, consider these solutions with open minds," Commissioner Margaret Cheney said in a statement. 

In terms of what the commission is willing to consider, the order says "alternative regulation can best be described as ratemaking approaches that vary from traditional regulation." In other words, anything except cost-plus.

The Vermont PUC has previously approved alternative regulation plans, ranging from comprehensive replacements of traditional regulation to limited plans focused on changes in power and gas costs. In the commission's statement accompanying the order, regulators noted they "took no position on the merits of alternative regulation as compared to traditional regulation but emphasized that it can be an important tool to enable innovation and flexibility in achieving state policy goals."

Vermont is targeting 90% renewable energy by 2050, making it one of the most aggressive states in the nation in terms of reducing emissions. Only Hawaii has so far enacted a 100% green goal, but a few other states and the District of Columbia are considering it.

In May, Vermont Gov. Phil Scott signed legislation to boost energy efficiency standards — in part, aimed at pressing the federal government to take action. Under President Trump, new appliance standards have been delayed.

The Appliance Standards Awareness Project estimates the new Vermont standards could save the state 59 million kWh of electricity annually by 2025, along with generating savings for water, oil, propane and natural gas. The savings could be worth $17 million a year and the equivalent of avoiding 21,000 metric tons of carbon dioxide emissions annually within seven years.