Maine legislators get set for net metering vote that could impact PUC ruling

Published on June 20, 2017 by Kim Riley

The Maine Legislature is considering a bill that would overturn the Maine Public Utilities Commission’s (PUC) changes to state net metering rules.

Specifically, the PUC Jan. 31 approved revisions to Chapter 313, the Customer Net Energy Billing (NEB) Rule, focusing narrowly on residential rooftop solar and grandfathering existing customers for 15 years; locking in the phase-down level starting in 2018 for new entrants at the year in which they enter for 15 years; and maintaining incentive margins consistent with the declining costs of solar technology.

However, state lawmakers quickly got involved and now are considering An Act to Protect and Expand Access to Solar Power in Maine (Legislative Document 1373), a bipartisan bill sponsored by state Rep. Seth Berry, D-District 55, which would amend existing law and prohibit charges on customers who elect to use NEB, or what is essentially net metering.

Sara J. Burns, president and CEO of Central Maine Power (CMP), the state’s largest electricity transmission and distribution utility, told Daily Energy Insider that LD 1504 would significantly expand an outdated subsidy for private rooftop solar resulting in higher electric bills for all Maine consumers.

“Specifically—at current rates of private solar growth in Maine—over the next 15 years, it could result in those who do not own private rooftop solar paying over $80 million through their electric bills for those who can afford to own private rooftop solar. This isn’t fair,” said Burns, who oversees a utility serving 619,000 Maine homes and businesses.

Additionally, the bill proposes a “very expensive way” to pay for solar energy, she said.

“People who have private rooftop solar get compensated more than $130 per megawatt hour whether the demand—and price—for energy is high or low. This is more than four times what all other generators in the market are getting,” Burns said.

“We think the Public Utilities Commission’s new rules were a reasonable compromise, and they ought to be left to work. They protected those customers who already own solar with a 15-year grandfathering, and the rules would phase out the inequities over 10 years,” she added.

Burns also said that utility ratemaking is a complex process that she thinks is best handled by the PUC, which has “the expertise and resources to do it thoughtfully.”

“Ratemaking by legislation is prone to abuse, and in this case, the solar lobby is trying to lock in a 15-year subsidy by statute,” she said.

Other provisions in LD 1373 would ensure that:

– Customers using NEB receive credits netted against delivery and supply charges on a 1:1 basis;

– Unused bill credits accumulate on a 12-month rolling basis;

– The installed capacity of an eligible solar facility would be limited to 2 megawatts in the territory of an investor-owned utility, and to 100 kilowatts in the territory of a consumer-owned utility (except that the latter may elect to allow an eligible facility with installed capacity up to 2MW);

– An eligible solar facility with shared ownership or third-party ownership would be eligible for NEB and the PUC would not be allowed to limit the number of participants in the project, although the PUC could set a minimum share size;

– A comprehensive review of ratepayer benefits and costs from NEB would be conducted when any investor-owned utility in the state entered NEB agreements for a total generating capacity equal to 5 percent of the annual peak demand and again for every additional 3 percent of the utility’s annual peak demand thereafter; and

– A solar energy rebate program would be established and administered by the Efficiency Maine Trust that would be funded through assessments collected by the PUC from utilities.

Let it go

When it comes to net metering, anyone who advocates for its extension or grandfathering for some period of time “are the ones who are clinging to the past,” said John Carroll, director of corporate communications for Avangrid Inc.

“They would squander the opportunity to take full advantage of the advances in solar technology, the energy markets, and utility infrastructure to maximize the social benefits of cost and environmental progress,” Carroll said.

“If for example, we see continued growth at recent rates, by 2020 we could easily have 10,000 to 12,000 net metered customers with 15-year grandfathered net metering agreements that might run to 2035,” Carroll said. “That would be a costly legacy from the 1990s and a sad missed opportunity for Maine.”

CMP is a subsidiary of Avangrid, a diversified energy and utility company with more than $31 billion in assets and operations in 27 states. Carroll noted that CMP has invested nearly $200 million to install smart meters and is in the final phase of installing a $52 million modernized billing and customer relationship management system.

“With this technology, Maine is positioned to transition to a much more dynamic energy market for users and producers,” Carroll said.

The new billing and customer care system, he said, “creates the conditions” for sending real-time market signals to private solar owners so they can orient their solar panels to take advantage of real-time market prices. This essentially would reward customers who install solar with opportunities “to earn more through more timely conservation to maximize their exports during the highest prices,” Carroll said.

It’s these types of advanced technologies that utilities should be encouraged to invest in and use so that the efficiency and price of solar is subsequently improved, Ashley Brown, executive director of the Harvard Electricity Policy Group based at Harvard’s Kennedy School of Government, told Daily Energy Insider.

Brown said when net metering came along, costs were 100 times lower than they are today.

“If you look at making solar economically viable, then net metering does the exact opposite because it takes away the incentives that make it more competitive,” he said.

Brown added that lawmakers and regulators should ask themselves: As the cost of solar power keeps dropping, “why should we keep a billing system in place that requires customers to pay retail prices for what’s really a wholesale product?”

Brown suggested they replace net metering with a price structure that reflects electricity’s fluctuating market value.

Public input

LD 1373 in April was referred by both of Maine’s legislative chambers to the Energy, Utilities and Technology Committee, which in turn held a public hearing on it. Maine voters, in fact, overwhelmingly favor solar energy, but they do have some concerns, according to a poll conducted by the Consumer Energy Alliance (CEA).

“CEA is glad to see that Maine lawmakers are earnestly working on energy policy, but we are concerned that LD 1504 does not benefit families and small businesses due to its unbalanced treatment of low-income households, and the cost-shifting burden it creates for those without solar panels on their property,” said James Voyles, senior director and policy counsel for CEA.

The poll results that were released June 13 show that Maine citizens want solar energy to become more affordable through large-scale projects, Voyles said, “however, LD 1504 works to expand more expensive rooftop projects, which is inconsistent with this poll’s results.”

The Maine Legislature also is considering An Act Regarding Solar Power for Farms and Businesses (LD 1504), which would repeal the PUC’s NEB decision and make it law that the PUC could not limit the number of customers participating in any shared-ownership or community NEB project, nor adopt or amend any NEB rules. The state House referred the bill to the Energy, Utilities and Technology Committee and as of Monday, the status of the bill was listed as “unfinished business” for the state Senate. It is sponsored by state Sen. Thomas Saviello, R-District 17.