MPUC Changes Net Energy Billing Rules

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smart meter photo by Kay MannOn January 31, 2017, the Maine Public Utilities Commission issued a decision on proposed rule changes regarding customer net energy billing. The following information comes from the MPUC’s press release on the announcement.

Background:  Chapter 313 of the Commission’s rules governs net energy billing (NEB) in Maine.  NEB is a metering and billing mechanism that is generally used to promote the development and operation of smaller renewable generation facilities.  In January 2016, Central Maine Power Company (CMP) filed a letter stating that, at the end of calendar year 2015, the cumulative capacity of the generating facilities for which CMP has net energy billing agreements under Chapter 313 is approximately 1.04% of CMP’s annual peak demand.  Consequently, CMP requested that the Commission undertake the review of net energy billing required by Section 3(J) of Chapter 313.  In response to the CMP January 14, 2016 letter, the Commission, on June 14, 2016, issued a Notice of Inquiry to obtain comment and information from interested persons regarding Maine’s NEB rules and whether the rules should be modified in light of changing economics and markets.  On September 13, 2016 the Commission issued a proposed rule and requested comments on that rule.  On October 17, 2016 the Commission held a public hearing on the proposed rule and received several hundred written comments as well.

On January 31, the Maine Public Utilities Commission approved revisions to Chapter 313, the Customer Net Energy Billing (NEB) Rule.  "The Commission received many useful comments over the last several months regarding this Rule and all the comments were reviewed and analyzed carefully" noted Commission Chairman Mark Vannoy. "The resulting rule a) grandfathers existing customers for fifteen years, b) for new entrants it locks in the phase down level, at the year in which they enter, for fifteen years, and c) maintains incentive margins consistent with the declining costs of solar technology."  The Commission focused its decision narrowly on residential rooftop solar.  Below is a more detailed explanation of the major components of this decision.

1.     Grandfathering of Existing NEB Customers:

All existing customers and new customer installations that occur prior to January 1, 2018 will be grandfathered for fifteen years.  This means those customers will receive the current incentives and terms as they exist today.

2.     Grandfathering of New Entrants to NEB:

As new customers sign up over the next 10 years, netting of the transmission and distribution (T&D) portion of the bill will be gradually decreased to reflect reductions in the costs of small renewable generation technology.  For example, in year 1 NEB customers will receive the full value of the supply portion, and 90% of the T&D portion for each year of the fifteen years.

3.     Maintaining Incentive Levels:

The incentives to NEB customers under the new Rule should not change the length of time it takes for a customer to recoup their investment.  The estimated payback for new installations will be similar to what it has been historically.  As noted above, for a customer installation signed in year one, the full incentive for supply and 90% of the incentive for T&D is received for fifteen years.  As the cost of technology declines, the incentive for T&D also declines for new entrants.  For a new customer installation in year two, for example, the cost of the solar panels will have declined but the incentive will also decline to 80% for T&D and the full incentive for supply.

4.     Rule Addresses Residential Rooftop Solar Only:

Many projects are being built across the state today based on existing market mechanisms.  The Commission decided not to address larger scaled projects and community projects as part of the NEB rules to ensure they stayed within their regulatory function, and in light of legislative initiatives in these areas.

5.     Includes Renewable Energy Credit (REC) Based Revenue Stream:

The new Rule allows an NEB customer to choose to monetize the value of their solar generation and receive a credit for that value.  NEB installations will be automatically classified as a Maine Class I Renewable Resource.

NRCM REACTION:

In response to the announcement above, the Natural Resources Council of Maine said in an email, “…the PUC’s final decision is even worse than its draft rule we saw last fall, which was almost universally opposed by the public and stakeholders. Ignoring more than 4,000 public comments, the PUC’s final rule will: gut the long-standing ability of Maine people and businesses to generate their own power on fair terms; add expensive, burdensome new metering and billing costs to be paid by Maine ratepayers; and keep arbitrary barriers for community solar, namely a 10-person limit on community solar farms. The final rule is so extreme it will even assess new penalties on solar power people generate AND USE right in their homes and businesses.”

NRCM went on the encourage its supporters to ask their state legislative representatives to support a bill sponsored by Seth Berry, (D-Bowdoinham), called, “An Act to Protect and Expand Access to Solar Power in Maine”. The bill would restore and protect net metering from the PUC, reestablish a solar rebate program, and lift barriers on community solar.

The Maine Public Utilities Commission is comprised of 3 commissioners, all appointed by Governor LePage: Mark Vannoy, Chairman, Carlisle J.T. McLean and R. Bruce Williamson. The communications contact is Harry Lanphear (207) 287-3831.

Image Credit: Kay Mann

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