The program was a stalled by its own success last year, net metering supporters say; several utilities maxed out their statutory limit on the amount of power they can receive from net metering installations, forcing them to deny applications from homeowners and businesses poised to generate their own electricity.
The bill lifts this cap from 4 to 15 percent the utility's capacity at peak demand. This allows the program to continue nearly unchanged for the next few years.
The bill, H.702, passed the House, received the Shumlin administration's support, and will now head to the House for a final vote.
The state's net metering law applies to backyard and rooftop energy projects smaller than 500 kilowatts in size - projects that have been largely small-scale solar installations. However, several Senate lawmakers used the bill Friday as a platform to resurface a debate on industrial-scale energy generation.
Members of the Senate Finance Committee proposed several amendments, including what some say was a moratorium on wind - a debate that began after Green Mountain Power constructed a 21-turbine wind project in Lowell, which the town supports.
Some lawmakers say it is not fair for local communities to host a project that benefits other states that share the region's electrical grid.
"We should not be destroying our ridgelines and dividing our communities for and economic development program that the surrounding communities don't want," said Sen. Peter Galbraith, D-Windham, who supported a three-year wind moratorium last year.
Galbraith put forth an amendment to prevent utilities from selling renewable energy credits (RECs) to other states while also counting the credits toward the state's renewable energy portfolio - the process of "double dipping," as many describe it.
The state operates under what is called the SPEED program, which is designed to move the state toward generating 20 percent of its power from renewable energy by 2017 by providing developers incentives for their projects. Under the program, utilities can generate their own renewable power, sell RECs to other states, and also count the RECs towards the state's renewable energy goals.
Galbraith's amendment, which was shot down on the Senate floor, would have prevented utilities from cashing out on RECs for projects larger than 35 megawatts in size starting July 1, 2014.
"Most immediately, it might apply to electricity from several large scale wind projects that are in the discussion phase," he said, referencing a proposed project in Windham Country and Seneca Mountain Wind project in the Northeast Kingdom.
Iberdrola Renewables, a company headquartered in Spain, has placed three meteorological (MET) towers - two in Windham and one in Grafton - on land owned by the New Hampshire forestry company Meadowsend Timberlands. If the site is used for a wind project, it would be Windham County's first utility-scale wind project.
A representative for Green Mountain Power said Thursday the utility opposed the amendment, calling it a moratorium on wind development.
The Department of Public Service said Friday it is unclear what effect it would have to only impose new conditions on certain projects.
Darren Springer, deputy commissioner of the department, said the amendment "puts an arbitrary line in place and says that for the current program that is going to run through 2017, you can no longer sell credits to benefit ratepayers from large projects."
Springer said it could have an adverse impact on ratepayers if enacted.
Finance Committee member Sen. Chris Bray, D-Addison, offered an amendment that would authorize the department to study the impacts of moving the state from its current SPEED program to a renewable portfolio standard (RPS), a model shared by other states using the ISO New England regional transmission grid.
The amendment passed the senate by 27-1. The department supports the amendment.
Bob Hartwell, D-Bennington, chair of the Natural Resources and Energy Committee, proposed an amendment to request the department to represent the state in the situation that Vermont is required to subsidize an electrical transmission project to bring power from northern to southern states - a concern sparked by the so-called FERC Order 1000.
The ruling handed down by the Federal Energy Regulatory Commission would allow the region to subsidize the cost of transmission infrastructure for the purpose of bringing renewable power generated in the North to southern states in short supply of renewable energy, lawmakers warn.
The department supports the amendment. "Our advocacy at the regional level is focused on how to we keep transmission costs as low as possible and how do we keep our share of that as fair as possible," Springer said.
The amendment passed the Senate by a voice vote.
Sen. Kevin Mullin, R-Rutland, pitched an amendment that would allow utilities to construct one net-metered solar project no larger than 5 megawatts in size. The department supports this amendment if limits are applied on the number of projects. The projects will not count toward utilities' net metering capacity limits.
The proposal is also supported by IBM, which has been speaking with Green Mountain Power to construct a solar array on their campus, a company spokeswoman said Thursday to the Senate Finance Committee.
Mullin also proposed expanding the size of a program designed to make it financially possible to construct a solar array on closed landfills. The amendment allows the construction of a 5-megawatt solar project (previously 2.2 megawatts) on landfills, a size that is necessary given the added cost of constructing a project on a closed landfill.
Both amendments passed by a voice vote.