State regulators have approved a three year incentive regulation plan for Green Mountain Power that caps the company’s spending and gives it more flexibility to invest in new products and services.
The plan should stabilize rates, but the actual increases won’t be known until next month.
Under the plan, GMP is allowed to quickly roll out programs – such as home battery storage systems – that it says will help bring more renewable energy onto the grid while holding down costs at times of peak demand. GMP spokeswoman Kristin Kelly said the goal is to allow the company and its customers to quickly adapt to climate change and a changing energy market.
“GMP is taking on more risk,” she said. “And what that does is… it’s allowing us to be more innovative and flexible for customers to help lower costs.”
The case took about a year to litigate before the Public Utility Commission. James Porter, the department’s public advocate, said the PUC sided with the state on how GMP will adjust rates to reflect changes in power costs and earnings.
The department argued that GMP should bear more of the risk if power costs suddenly spike.
“And the commission, we were pleased, agreed with our position,” he said. “And so we do think it’s ... a fair balance between the ratepayers and Green Mountain Power insofar as the risk goes.”
GMP also agreed to cap spending on new projects at $85 million a year over the next three years. In two weeks, GMP will file the actual rate increases allowed under the plan.