Posted August 21, 2017
Last modified August 21, 2017
By Jacqueline Weaver
A bill in the Maine Legislature that would have ensured benefits for solar panel owners was killed on Aug. 2.
The bill passed with strong majorities in both the House of Representatives and Senate, but then was vetoed by Gov. Paul LePage. In the initial vote, legislators in both bodies supported the bill in high enough numbers to override the veto, but several legislators defected during the override vote; the House vote fell three short of the required two-thirds.
The legislation would have blocked a state Public Utilities Commission rule from taking effect on Jan. 1. That rule is being challenged in the Maine Supreme Judicial Court, which is expected to decide on the issue before the end of this year.
At issue is net metering, which gives solar producers credit against their electric bill for the excess energy they put on the New England power grid as well as for the unit cost of transmitting and distributing that power.
Gov. Paul LePage has argued that the current net metering system is unsustainable and shifts transmission and distribution costs to non-solar producers.
The PUC rule gradually removes the transmission and distribution portion of net metering credits, reducing the amount a small solar generator receives by 10 percent each year for 10 years. Existing net metering customers keep their current arrangement for 15 years. After that time, those customers only would receive credit for the electricity they supply.
NOTHING BUT NET
Net metering was devised in the 1990s to encourage development of renewable energy. Today, opponents say net metering is obsolete because the cost of solar panels has fallen dramatically.
Supporters of the bill vetoed by the governor said the legislation would have corrected what they see as a major flaw in the PUC rule that will charge customers for transmission and delivery of electricity they generate and consume on site.
“It would really cut into the economic return and that’s bad news for solar, our climate and jobs,” said Dylan Voorhees, climate and clean energy director for the Natural Resources Council of Maine. “This is like the grocery store charging you a fee for tomatoes you grow in your garden. It’s just wrong.”
The day of the failed override vote, Voorhees accused legislators of scuttling future economic growth:
“Too many lawmakers turned their back on jobs of the future for Maine and bowed to pressure from the governor’s office, Central Maine Power (CMP), Emera, and other utility and fossil fuel industry groups from across the nation,” Voorhees said on Aug. 2.
Solar electricity exported to the New England grid creates a credit for the producer equal to the value of kilowatt hours, the same unit the utility uses for billing purposes. The credit is used at night, or whenever the customer is importing power from the grid. Excess credits are saved by the utility and can be drawn upon by the solar producer anytime within a 12-month period. Credits expire after 12 months.
“This vote allows the Public Utilities Commission to begin its extreme, nationally unprecedented new tax on self-consumption of power,” said Voorhees. “This vote was a clear loss for all Maine businesses except for two: the for-profit monopoly utilities, Emera and Central Maine Power, who will see their own guaranteed earnings increase as they spend additional ratepayer money on unnecessary new metering equipment and billing system changes.”
Vorhees said the PUC rule makes it harder for customers to choose solar and allows the utilities to begin earning a delivery tax on power that solar customers produce and consume.
A spokeswoman for Central Maine Power Co. said the legislature’s failure to override the governor’s veto “will benefit all customers.”
“Solar energy is important in diversifying the portfolio of clean energy resources, so we believe the commission’s new rules will encourage the solar industry to pass on more of the benefits of the declining costs of solar technology to consumers,” said CMP analyst Gail Rice.
“The rules also protect customers who have already installed private solar systems, but they start to rein-in unfair costs that are shifted to customers who do not have private systems,” she said.
The state Senate Aug. 2 easily overrode the governor’s veto of the bill, LD 1504, with a 28-6 vote. The House, however, fell three votes short of the needed two-thirds majority with its vote of 88-48. Seven Republican legislators who had voted in favor of the bill changed their position and voted to sustain the veto.
The bill was a compromise, observers have said.
Among other things, the bill would have reduced the net metering credit from 100 percent to 90 percent for new customers between Dec. 31 of this year and Dec. 31, 2018. The following year the credit would fall to 80 percent.
LD 1504 would have allowed the PUC to further reduce the credit amount for future net metering customers, but these customers could keep getting credits for up to 15 years.
The legislation also would have increased the number of customers who could pool resources and invest in a community solar farm from ten to 100. This would have allowed people who can’t afford to install solar panels or who live in a place where the panels are not practical to cut their home energy bill by earning solar credits.
In addition, the bill would have required the PUC to conduct a cost/benefit analysis of the net metering policy.
John Carroll, a Central Maine Power spokesman, said the PUC rule protects customers who have already installed solar systems, but the rules also start to rein-in what he called unfair costs that are shifted to customers who do not have private solar generating systems.
“They (solar producers) take credit for something they didn’t do” and the cost is shifted to other customers, Carroll said.
A 1 PERCENT SOLUTION
Hans Albee, a solar system designer with ReVision Energy, said that even at peak summer production levels, solar energy makes up only about 1 percent of the total power on the grid.
“That excess energy is entirely used by customers near the solar producer and never flows up to the level of transmission across the New England region,” Albee said.
An independent study conducted in 2015 for the PUC concluded that solar-generated electricity put onto the grid is valued at $.033 per kilowatt hour, which is substantially higher than the value of solar energy customers are currently receiving for their solar electricity.
The lawsuit challenging the PUC rule is expected to be decided by the Supreme Court at the end of this year. The suit was filed by the Natural Resources Council of Maine along with the Conservation Law Foundation, ReVision Energy, the Industrial Energy Consumers Group and Insource Renewables.