Nathan’s Notes from the Northeast
Over the last few month, there have been several significant developments for clean energy progress across the Northeast. One major trend we’ve observed in the region – and across the country – is state legislatures asking their electric utility regulators to take a closer look at net metering.
We strongly support these efforts to conduct data-driven cost and benefits analyses of net metering (and, more broadly, solar) for customers, for the grid and for society as a whole. Throughout the grueling and often years-long process of conducting full analyses, we’re committed to bringing the data-based argument for the net benefit of net metering.
Nathan shares his notes from the field and explains what these decisions mean for solar.
Maine’s legislature for the win
In March, the Maine Public Utilities Commission took a huge step backwards for solar in Maine with a very harmful decision. The order set Maine on a path to eliminate net metering, and would allow utilities to actually charge solar customers for the power that they generate on-site.
In issuing the decision, the Commission ignored their own report which showed incredible benefits of solar for everyone in Maine. As a result, the decision is contrary to the best interest of Maine ratepayers.
In response to the Commission, Maine’s legislature passed LD 1504 with overwhelming bipartisan support in the House (105-40) and the Senate (29-6). The bill would reinstate net metering, direct the Commission to conduct another benefit and cost analysis, and report back to the Legislature with recommendations. The bipartisan support in both chambers should be enough to override Governor LePage’s recent veto, if no legislatures change their vote.
We applaud the legislature and the hard work of local advocates, including Natural Resources Council of Maine and Conservation Law Foundation among others, in fighting for Mainers’ solar rights.
New Hampshire doubles down on net metering
Over the last year, New Hampshire’s Public Utilities Commission has undertaken a process to determine the future of net metering in the Granite State at the direction of the legislature. Vote Solar partnered with the New Hampshire Sustainable Energy Association (NHSEA) and other stakeholders to advocate for full and fair net metering for current and future solar customers.
After more than a year of meetings, testimony, and thorough review of the facts, the Commission issued a final decision last month to preserve net metering and remove caps on the amount of projects that can qualify for net metering.
Most notably, the decision:
Grandfathers existing solar systems until the end of 2040;
Allows future solar customers to generate electricity and use that electricity on-site over the course of the month (a.k.a. monthly netting of their use and solar generation);
Starts a Commission-led process to conduct a benefit and cost analysis;
Effectively eliminates the cap on net metering;
Split net metering credit value (for systems 100 kW and under) into two parts: distribution and transmission. While the transmission component will continue to earn 100% of the retail rate, the distribution component has been reduced to 25% of the retail rate. (Once the commission conducts the benefits and costs analysis mentioned earlier, the net metering credit for distribution may be adjusted accordingly.)
In addition to changing the net metering credit value for the distribution charge, the Commission also removed several components from the net metering credit calculation. Specifically, future net metering customers will no longer be credited for the (1) Stranded Cost Recovery Charge, (2) System Benefits Charge, or (3) Electricity Consumption Tax. Solar does not provide a benefit in reducing the costs associated with these public policy charges. In total, the net metering credit value will be reduced from approximately $0.186/kWh to approximately $0.1461, or by about 3.55¢/kWh.
While some utility regulators and state legislatures around the country are gravitating towards politically-motivated decisions, we commend the Commission for their fact-based, data-driven and stakeholder-informed process. At a time where net metering is under attack by electric utilities and others nationwide, our favorite line from the Commission’s verdict on net metering: “there is little to no evidence of any significant cost-shifting”.
We look forward to continuing our work with NHSEA and all of the other stakeholders providing the necessary data and expert testimony throughout this commission process.
The verdict in Vermont
This June, the Vermont Public Service Board (PSB) used the evaluation as the basis to adopt new net metering rules. Even though the process took over three years, the Board ultimately maintained net metering at the retail rate.
Though the PSB’s final rules keep net metering intact, they also include a reduction in total compensation – including incentives (‘adders’) – for solar customers. Compensation is now determined by the characteristics of the facility, such as size and location. The compensation is based on the retail rate, but the compensation can rise or fall depending on the characteristics of the facility. For instance, larger facilities are compensated less than smaller facilities.
Vote Solar does have some concerns with the final net metering rule. Net metering customers that want to retain their solar attributes, or renewable energy credits, have a permanent negative adjustor, but customers that sell their solar attributes are only compensated for ten years. This provision inappropriately penalizes customers and benefits electric utilities.
In addition, the final net metering rule may also hurt the viability of shared (community) solar in Vermont. Since the rules reduce the compensation for larger facilities, shared solar may not be financially viable. Putting shared solar in jeopardy reduces the ability of all people to benefit from solar.
Despite our concerns, we ultimately remain optimistic about the future of solar in Vermont. We applaud all of the state employees that worked on net metering, and all of the advocates that dedicated time to this important issue.