Senator David Woodsome, Chair
Representative Seth Berry, Chair
Joint Standing Committee on Energy, Utilities & Technology
My name is Dylan Voorhees and I am the Clean Energy Director for the Natural Resources Council of Maine (NRCM). Thank you for allowing us to present this testimony. We appreciate the effort by Senator Saviello to bring forward this bill, which has considerable merit. However, in general we believe the bill can be strengthened and that it does not go far enough to provide protections and market certainty around net metering.
This bill reflects the dichotomy of solar from a rural economic perspective: on the one hand solar power offers a tremendous opportunity to benefit Maine’s struggling rural economy by helping businesses lower energy costs while creating local employment, while on the other it is necessary for policymakers to take action if they want the benefits of solar to penetrate more deeply into these sectors and regions. Passage of this bill, with amendments and in conjunction with other bills, could do much to accomplish that goal.
We support several elements to the bill.
First, NRCM continues to support the general construct of a Standard Solar Buyer which would purchase solar resources through long-term contracts and re-sell into the various energy markets (supply, capacity, RECs), returning revenue to ratepayers as a whole. Much of this statutory construct is the same across LD 1504, LD 1444 and last session’s LD 1649. This approach provides an opportunity for utilities to participate in and earn revenue in distributed generation without raising the complex issues of utility generation that are before the committee separately. Furthermore, we also support the use of competitive auctions to procure target volumes of solar—at least for projects at the megawatt (MW) scale, as included in this bill.
The large commercial, industrial and municipal procurement section of LD 1504 has some additional features that are noteworthy, including targets for solar at agricultural and forest products businesses and a modest mechanism to boost large-scale solar for affordable multifamily housing.
We believe this section will be valuable to medium and large businesses, and to municipalities. Attached to this testimony is a short fact sheet about municipal solar projects in Maine. You may be surprised to see how much activity there has been, although relatively few have been very big so far. There are also many projects in development or in the aspirational or planning phases (our list is incomplete), some of which have been harmed by the regulatory and policy uncertainty that has only increased in Maine over the last 3-4 years.
Second, NRCM supports the lifting of the 10-meter limit on community solar farms, an arbitrary and costly limit which is preventing Maine people, businesses and towns from maximizing the benefits of solar power.
While we support the small business distributed generation program, we believe it would be more equitable and economically efficient to use a more sophisticated approach for setting the credit rate. It appears one purpose of this section is to pilot a solar compensation approach that is an alternative to net metering. That is a reasonable objective and the program could very helpful in informing that policy development. We would prefer to see the rate set in relation to the ratepayer value of the solar resources that are being contracted for. We understand that setting a long-term rate based on analysis of the value of solar would require additional work by the Public Utilities Commission (PUC). We believe the rate in the bill is lower than the market values and benefits that would accrue to ratepayers. That is good news for ratepayers, but it limits the supply of solar likely to be purchased at less than the economically optimal amount, and risks giving too much of the value to ratepayers at the expense of the small business making the investment in the generation.
Finally, and very importantly, the bill does not go far enough to protect net metering. The bill would prevent the implementation of the recent rules which were so poorly developed—that is a good step. However, it would not prevent the PUC from recommending the same changes a few years later. The unallocated language which directs the PUC to conduct a real cost-benefit analysis would be very helpful, as would be the requirement to develop more comprehensive recommendations for encouraging and integrating distributed generation resources. We hope these steps will help correct the record and provide a better basis for more balanced and rate-payer oriented regulations or rate design. However the bill does not guarantee that outcome, and therefore does not go far enough to create certainty for solar markets and would-be investors. For that reason we prefer the approach to net metering in LD 1373.