Pressured by Gov. LePage, the commission decides new rules reducing compensation for rooftop-generated power will take effect March 16, six weeks earlier than the deadline it set two months ago.
by Tux Turkel, Staff Writer
Portland Press Herald news story
Maine’s rooftop solar installers, who thought they had until April 30 to put up panels under existing, more-generous compensation rules, were caught off-guard Wednesday when the Maine Public Utilities Commission unexpectedly decided to close the window March 16.
The decision was criticized by installers and clean-energy advocates, who said it creates more confusion in Maine’s already contentious solar marketplace.
“The Maine Public Utilities Commission is out of control,” the Natural Resources Council of Maine said in a prepared statement. “Today the PUC decided Maine is closed for business and intent on destroying jobs in America’s fastest-growing job market.”
In December, in response to a request from a solar installer, the PUC voted to delay implementation of a rule on how people who install new systems in 2018 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. Under the new rule, the credit on electric bills from systems installed after Dec. 31, 2017, would gradually decrease over time.
The PUC agreed with the solar installer that more time was needed to iron out some technical issues and extended that deadline to April 30. That meant that systems installed before then would be subject to the current level of compensation.
The delay didn’t sit well with Gov. Paul LePage. He has long argued that the compensation method, called net energy billing or net metering, is a subsidy paid by all ratepayers.
LePage sent a letter to the PUC in mid-December, saying the delay only benefited installers and “wealthy people who can afford redundant electric systems.” He asked the commission to kill the four-month extension and let the new, stepped-down compensation level take effect Jan. 1.
The three commissioners didn’t do that, but they compromised during their deliberations Wednesday, deciding that enough progress had been made in clarifying some technical issues around net energy billing that they could end the grace period six weeks earlier, on March 16.
They also said that customers who were currently having their systems installed would have their situations reviewed on a case-by-case basis.
Solar installers were still trying to assess the impact, but Vaughan Woodruff of Insource Renewables, the installer who sought and won the original extension, said the result was likely to confuse and anger customers, who won’t understand what the rules are. He said his company had 15 or so projects set to go up before April 30, and those that are installed between March 16 and then will be subject to some yet-unspecified review.
“All we were asking for is a clear set of expectations,” Woodruff said. “I really don’t understand what was gained by this today.”
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.
In Maine, LePage has twice vetoed bills in the Legislature that would have kept robust financial incentives in place for rooftop solar. This winter, solar advocates are pinning their hopes on L.D. 1444, which deals with large, community solar projects but also addresses compensation issues.
Also in play is a challenge to the PUC’s net-metering changes at the Maine Supreme Judicial Court. The court heard oral arguments in December and a decision is pending.
Net metering is a longstanding and controversial financial incentive meant to promote renewable energy technology. The details matter 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’s original rule change would not apply to all existing net-metering customers, and to 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: Any net-solar customers who install systems after Jan. 1 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.
In December, the PUC agreed to delay the change until April 30.
But Wednesday’s action represented yet another date change, and the ongoing uncertainty was slammed by the Natural Resources Council.
The group said: “The PUC decision to move the goal posts for the third time in a single year is a slap in the face to hundreds of Maine workers and their families who are investing in greater energy independence for our state. The PUC has again shown its willingness to put the governor’s whims ahead of its duty to make sound, fair, fact-based economic decisions.”
The group said consumers and businesses will now need to scramble to keep projects alive, and that the action sends a message to businesses and investors that Maine is a risky place to do business.