Maine PUC approves revisions to net energy billing that impact rooftop solar

Published on January 31, 2017 by Daily Energy Insider Reports


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The Maine Public Utilities Commission (PUC) approved final changes to its net energy billing (NEB) rule on Tuesday that will gradually lower incentives for future residential rooftop solar customers.

Net energy billing, also known as net metering, allows customers with rooftop solar or other renewable generation units to sell the excess power they produce back to the electric grid. The utility then offers credits that are used to offset the customer’s bill for power purchased from the grid.

At Tuesday’s PUC meeting, the commission said all existing customers and new customer solar installations that occur prior to Jan. 1, 2018 will be grandfathered for fifteen years, meaning those customers will receive the current incentives and terms as they exist today.

But as the cost of solar technology decreases, future rooftop solar customers would assume more of the costs.

As new customers sign up over the next 10 years, netting of the transmission and distribution (T&D) portion of the bill will be gradually decreased to reflect reductions in the cost of solar technology. In the first year, NEB customers will receive the full value of the supply portion, and 90 percent of the T&D portion for each year of the fifteen years.

Many states are debating controversial net metering issues, where critics maintain that costs are shifted from solar customers to other electricity customers and utilities. Advocates say that the benefits solar contributes to the grid, utilities and other ratepayers outweigh the costs.

In Maine, the governor’s office has expressed concerns about the structure of the net energy billing system in the past and previously proposed a much shorter grandfather period.

“In my view, the rule we adopt today is narrow and tailored and leaves open future ratemaking decisions that employ technology to reach equitable ratepayer outcomes. I agree with many of the comments that we still have much work to do on rate structures,” Commission Chairman Mark Vannoy said during deliberations.

Maine’s revised rule only addresses residential rooftop solar. The commission decided not to address larger-scaled projects and community projects as part of the NEB rules partly due to the roughly dozen bills concerning solar or net metering that are being considered in the Maine Legislature.

Tuesday’s meeting was the first time the commissioners conveyed their individual thinking on the topic of NEB.

“My hope is that the narrow approach that I intend to take here today for purposes of this rule, can serve as a constructive step forward by this regulatory body to confront this challenging, often emotionally charged and costly set of issues that strike at the core of fundamental principles of ratemaking,” Commissioner Carlisle Mclean said at the meeting.

The commission said the incentives to NEB customers under the new rule should not change the length of time it takes for a residential rooftop solar customer to recoup their investment for a new installation.

For a customer installation signed in the first year, the full incentive for supply and 90 percent of the incentive for T&D is received for fifteen years. As the cost of technology declines, the incentive for T&D also drops for new entrants. In the second year, the cost of the solar panels will have declined but the incentive will also decline to 80 percent for T&D and the full incentive for supply.

The new rule also allows an NEB customer to choose to monetize the value of their solar generation and receive a Renewable Energy Credit for that value.

Vannoy said the amended rule expands net energy billing in Maine in certain ways, such as by increasing the size cap for an eligible solar facility by 50 percent from 660 kilowatts to 1 megawatt.

The commission took on the review of net energy billing after Central Maine Power Company (CMP) filed a letter in January 2016 that said at the end of 2015 the cumulative capacity of the generating facilities for which CMP has net energy billing agreements was 1.04 percent of the company’s annual peak demand.

The commission issued its proposed rule in September 2016 and held a public hearing in October. The proposed changes generated several hundred written comments that were reviewed.