Vermont Sets Renewable Energy Requirement; Iowa Expands Tax Credits

June 22, 2005

Vermont and Iowa have both advanced legislation that will encourage greater use of renewable energy within their states.

In Vermont, Governor Jim Douglas signed a bill on June 14th that establishes a renewable energy requirement for electricity sold within the state. Through 2011, every retail provider of electricity in Vermont must meet its growth in electrical demand using new renewable energy resources or must buy renewable energy credits equal to its growth in energy sales. Electricity providers can also use a combination of new renewable energy resources and renewable energy credits. The new law sets a cap at 10 percent of the electricity provider's energy sales in 2005 and provides an incentive for electricity providers to enter into long-term purchase agreements with renewable energy facilities. The law also includes measures to encourage combined heat and power facilities, removes a cost cap for energy efficiency programs, and requires the state's public service board to set interconnection standards for small power generators. See Vermont bill S. 52.

In Iowa, Governor Tom Vilsack signed a bill on June 15th that extends wind energy production tax credits to producers of energy products from biomass or solar energy. To earn the tax credit, the producers must have a signed agreement for the purchase of their energy product, which can be in the form of electricity, biogas, hydrogen, or heat for a commercial purpose. The bill, Senate File 390, applies to facilities placed in service after July 1st of this year and before 2011. The renewable energy facilities can earn tax credits for up to 10 years. See the text and status of the bill on the Iowa General Assembly Web site.