“This is a landmark moment for energy in the US as it is the first time a community scale local energy market has been developed, regulated and commercially operated,” said Lawrence Orsini, CEO of LO3 Energy, a software company based in Brooklyn, New York.
As described by the two companies, the process is market driven, app-based and simple for participants. The transactions occur between businesses that want more renewable energy and homeowners with solar panels that are willing to sell their output.
The test program begins December 2 and will be open initially to 200 customers — fifty businesses and 150 households. The participants will trade a kind of local renewable energy credit (REC) that the utility is calling Vermont Green Attributes.
How it works
Via an auction platform created by LO3 Energy, the business indicates the maximum amount it’s willing to pay for the solar energy. The platform conducts the auction, settled once per day for renewable attributes created the previous day. The trades are transparent to the participants.
Green Mountain Power handles the billing and compenates the households. The utility also creates and hosts the marketplace and covers its costs by way of a 5% transaction fee assessed on the seller. The program costs are “modest” and in the first year are about $41,001, largely related to the expense of software development. After that, the costs mostly come from hosting the market, according to the filing.
The program is expected to result in about 500 MWh in trades per year. If the households can not provide enough renewable energy for the businesses, the utility will make up the difference from its wind and ‘Cow Power’ assets.
Vermont electric customers already get a lot of their power from green sources — about 60%. So the pilot is geared toward companies trying to move toward 100% renewable energy and helps them do so without the complexity of power purchase agreement.