Maine’s rooftop solar installers won a four-month reprieve
Tuesday when the Maine Public Utilities Commission voted to delay
implementation of a rule on how people who install new systems next year will
be compensated for electricity they feed into the grid.
The current net-metering rule requires utilities to pay
small energy generators the full retail price for the electricity they send
into the grid. But under the new rule, systems installed after Dec. 31 would
have seen the credit on their electric bills reduced over time.
The PUC decision pushes that deadline to April 30, so
systems installed before then will be subject to the current level of
compensation.
Net metering was devised in the 1990s to encourage renewable
energy development. Opponents say it’s obsolete in an era when the cost of
solar panels has fallen dramatically. But homeowners have come to expect net
metering, and it has become part of the business model for rooftop solar
installers.
For these and other reasons, net-metering rules are being debated
and modified across the country.
Roughly 40 states and the District of Columbia have
net-metering policies, according to Utility Dive, an online newsletter that
covers energy issues. It noted that the clashes over how to compensate owners
of solar panels have caught the attention of the U.S. Department of Energy.
In September, the agency announced it will conduct a study
of the costs and benefits of net metering for ratepayers and utilities. The
study is part of the agency’s research into the reliability and resilience of
the nation’s electric grid.
Tuesday’s action by the PUC also may have a broader impact.
Led by the Conservation Law Foundation, clean-energy
advocates are challenging the PUC’s net-energy billing rule in Maine Supreme
Judicial Court. Oral arguments are set for Dec. 13.
“We argue that the revised rule must be invalidated, because
it assesses new rates and charges to net-energy billing customers in violation
of various statutes,” said Sean Mahoney, the group’s executive vice president.
Mahoney noted that Supreme Judicial Court decisions after
oral arguments typically take at least a month, and up to six months. The new
date set by the PUC makes it more likely that a court ruling will be in hand
before the planned new rule goes into effect.
NEW CHANCE FOR MODIFYING SOLAR LAW
The extension also opens the door for the Legislature to try
– once again – to modify the law. That likelihood was raised soon after the
vote by a co-chair of the Joint Standing Committee on Energy, Utilities and
Technology.
“Today the Maine PUC did the only thing it could to avoid a
train wreck,” said Seth Berry, D-Bowdoinham. “It hit the brakes on
implementation of its disastrous, worst-in-the-nation rule on rooftop solar.
The decision gives installers and customers more time to qualify under the old
rules, and also gives the Law Court and the Legislature time to step in and
reverse course altogether.”
Berry introduced a bill last spring that would have
temporarily kept the current financial incentives in place, while directing the
PUC to study the costs and benefits of rooftop solar. But lawmakers spooked by
warnings from Central Maine Power Co. of higher electric rates sustained a veto of the bill by Gov. Paul LePage, by
just three votes. L.D. 1504 had won strong initial support in both chambers,
but that later faded in the House as Republican allies of the governor cast
doubt about the impact on electric customers, and even the bill’s constitutionality.
It marked the second year in a row that LePage saw his veto
of a key solar bill sustained by a narrow margin, illustrating the challenge
that clean-energy advocates will face in a third effort.
The PUC decision Tuesday was hailed as a small victory by
the Natural Resources Council of Maine, a chief opponent of the new rule.
“Today the PUC admitted that neither they nor utilities
actually know how to implement their anti-solar rule,” said Dylan Voorhees, the
group’s climate and clean-energy director. “Neither can yet provide solar
installers or potential customers with the necessary information and guidance
to implement the new rule or even say who it will apply to.”
Voorhees called the new rule unfair and too complex to carry
out, and faulted the agency for relying on utilities to come up with the
details.
“This delay,” he said, “gives lawmakers the time they need
to stop Maine from sliding further backward on solar by overturning the harmful
parts of this rule before it takes effect.”
For its part, CMP was circumspect in its reaction, and
declined to speculate on potential actions in court or the Legislature.
“We appreciate the commission’s decision to allow more time
for the parties to work through some of the complexities of administering the
new net-metering rules,” said John Carroll, a CMP spokesman.
POLITICS, POLICIES AND INCENTIVE FORMULAS
Tuesday’s activity centered around compensation for
net-energy billing or net metering, a longstanding and controversial financial
incentive meant to promote renewable energy technology. Net metering matters
because hundreds of jobs are tied to solar installations, and shifting policies
about compensation can lead many residents to put off investing in solar.
In Maine, the PUC rule approved last winter would have grandfathered
all existing net-metering customers, and any who installed solar before Jan. 1,
2018, for 15 years. Their incentives would stay as they are today.
New customers who install solar over the next 10 years,
however, would have the credit on the transmission and distribution portion of
the electric bill gradually decreased. For instance: Based on Tuesday’s action,
any net-solar customers who install systems after April 30 would be credited 90
percent on the transmission and distribution portion of the bill, each year,
for 15 years. They would still get a full credit on the supply portion of the
bill.
The reasoning behind the formula, the PUC said, is to try to
match financial incentives with the expected pace of falling equipment prices,
thereby maintaining a similar payback on investment for homeowners.
STRIKING A BALANCE, OR A ‘WAR ON SOLAR?’
When the rule was passed last winter, the commission
considered it an attempt to strike a balance. Solar installers didn’t see it as
a compromise, but part of what the Natural Resources Council of Maine
characterizes as a “war on solar” by the PUC, CMP and LePage.
Installers insist that retaining the full retail credit on
net metering is important to growing solar energy use and that it provides
benefits beyond power costs. Utilities and some politicians, including LePage,
counter that compensating homeowners for the excess power they sell shifts
costs to electric customers who don’t have solar panels.
Tuesday’s action was sparked by a request for a temporary
delay of the rule by Insource Renewables, a Pittsfield solar installer. Vaughan
Woodruff, the company’s president, said differing ways that CMP and Emera Maine
were interpreting the in-service date for installations, and the lack of
written guidelines, were confusing for his business and customers.
During deliberations, the PUC’s chairman, Mark Vannoy,
acknowledged the lack of clarity and called on the utilities to cooperate in
resolving remaining issues. After the vote, Woodruff said the outcome addressed
his short-term concerns.
“I think it was needed and a very pragmatic approach,” he
said. “It will give time for the utilities to write something that’s consistent
with the rule.”
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