New Hampshire Senate moves to allow larger net-metered projects
The New Hampshire Senate has passed a proposal for larger electric generators to be compensated for the excess power they feed into the regional electric grid above what the owners use.
Under the current law, generators of up to 1 megawatt are eligible for net metering. The Senate proposal would raise the cap to allow projects of up to 5 megawatts.
While net metering legislation often focuses on homeowners’ rooftop solar installations, this bill is intended to provide an incentive for developers to install bigger systems, projects that could serve communities and large companies. It also would encompass some small-scale hydropower projects that already exist in the state.
“It opens up a lot of opportunity for more projects, particularly for larger businesses and municipalities,” said Kate Epsen, executive director of the New Hampshire Sustainable Energy Association.
The current 1 megawatt limit, she said, discourages investment. “It’s a barrier to increased local generation.”
Increasing the size limit will provide more local autonomy in energy production and will open the door for better clean energy policy and lower costs, Epsen said.
The bill, sponsored by Sen. Kevin Avard (R-Nashua) will go to the House of Representatives for consideration.
“It will be a lot of work in the House to get it passed but I think it’s definitely possible,” Epsen said. “There’s going to be a lot of debate.”
The bill also would establish a process by which the New Hampshire Public Utility Commission determines the rates customer-generators are compensated.
The measure is the latest step in efforts to loosen restrictions around net metering in New Hampshire. Last year, state regulators eliminated a 100-megawatt limit on the total amount of net-metered generation that was allowed statewide.
Avard’s proposal emerged from a legislative study committee in the fall that examined ways to lower electricity costs in New Hampshire.
Bob King, co-president of the Granite State Hydropower Association, told the study committee that some of the 64 small hydropower producers he represents are struggling because the wholesale prices they’ve been paid through ISO New England have been low, only about 2.5 cents per kilowatt hour. By comparison, the default service rate from utilities range from 6 cents to 11 cents per kilowatt hour. King said higher rates paid for hydropower, closer to default rates, could help keep some hydro facilities financially viable.
The legislative study found that New Hampshire customers pay among the highest electricity rates in the nation, with an average total monthly bill of $131, higher than the national average of $120.
In 2017, New Hampshire’s industrial electric rates were ranked seventh highest in the nation, down from third in 2005. Similarly, residential rates were fourth highest in 2005, declining to seventh highest last year.
The power generation portion of customers’ monthly bills in New Hampshire hit a 15-year low in 2015, largely because of plentiful natural gas-fired generation. But the average cost of generation at $71 still was above the New England average of $68 and the national average of $55.
The study also found that the reduction in generation costs – which represents more than half of the customer’s bill – have been surpassed by rising costs for transmission and distribution during the past decade or more.
Electric utility Eversource serves about 70 percent of the state’s customers.
While the energy portion of an Eversource industrial customer’s bill decreased by 46 percent from 2005 to 2017, their overall bill decreased only 18 percent. Their transmission and distribution costs increased by 555 percent and 67 percent respectively, according to testimony from the New Hampshire Public Utility Commission in the legislative study.
Residential customers had a similar experience. The energy component of the monthly bill barely changed while the transmission and distribution portions increase by 515 percent and 72 percent respectively, leading to a 36 percent increase in the overall bill.
About $8.4 billion was invested in transmission reliability projects throughout the region from 2003 to 2015 and another $4 billion is expected through 2025. Data from the regional transmission operator show that New England customers pay more than twice the transmission rate charged to customers in PJM, which is the next most-costly region.
Donna Gamache, director of Government Affairs for Eversource, told the committee that while the region was focusing on deregulation during the 1990s, little was invested in the transmission system.
As a result, the infrastructure was more than 30 years old and was designed for an earlier regulated era. By 2005 transmission constraints existed across the region, which drove up energy costs, she said. Transmission congestion costs added $600 million annually to the energy supply side of the bill.
As a result of more-recent investments in transmission, however, generation costs have been reduced by 79 percent, Gamache said.
