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State utility regulators decided to remove the limits on how much surplus energy owners of solar panels can sell back into the grid. This highly anticipated decision is expected to have a significant impact on the growing solar industry in New Hampshire.

The 74-page ruling was handed down late Friday from the Public Utilities Commission and settled a years-long dispute over net metering between utility interests and the solar energy advocates. The issue at hand was how to fairly compensate homeowners who utilize solar panels without increasing costs on those who don’t have the technology.

“We thank all the parties and stakeholders that worked together during this long, sometimes contentious, process. Ultimately we reached a fair result that works for all of NH, and we look forward to continuing the thoughtful work necessary to keep our state competitive, consumer-friendly, and to grow our in-state renewable energy resources,” said Kate Epsen, executive director of the New Hampshire Sustainable Energy Association. “This is a result that will protect and benefit utilities, businesses, ratepayers and the renewable energy industry.”

Under the order, the net meter limit of 100 megawatts for the state utilities is lifted and new rates begin on September 1 and continue until a new order is issued. All existing net metering systems are grandfathered through 2040 at current rates.

The state previously managed with a 50-megawatt limit, until home solar installations took off in 2015. Soon after, state utilities were either at or nearing the statutory limit. Former Democratic Gov. Maggie Hassan signed a bill lifting the cap to 100 megawatts  on net metering after most state utilities reached the limit. Even after that cap increase, state utilities were still reaching that limit.

The ruling also states that solar installations after September 1 will not be entirely reimbursed for the distributed charge — their potion of the bill that reimburses utilities for the upkeep cost of maintaining the electric system’s poles and wires. Currently, solar owners receive a full reimbursement of distribution charges, but utilities have argued that they aren’t paying their fair share to maintain the power grid, shifting that cost to ratepayers who don’t have solar panels.

“We find that there is little to no evidence of any significant cost-shifting,” the order states. “Nevertheless, we agree with the parties and believe it is prudent to adopt new net metering tariff provisions to mitigate the potential for future cost-shifting, and we believe the new net metering tariff provisions we have approved further that objective.”

Residential systems will still be credited monthly at 100 percent of retail energy and transmission charges. The dollar amount of the change depends on how much electricity is used and produced by a given system.

The ruling comes as somewhat of a compromise between utilities and solar advocates, but still favors the ratepayers, said state-appointed consumer advocate for utility issues Donald Kreis.

“We have our long-awaited net metering order, and it is a qualified victory for consumers,” he wrote in a Saturday Facebook post. “We were able to persuade the utilities to walk away from draconian rate design schemes that were calculated to punish rather than reward people for generating some of their own electricity and sharing some of it with their neighbors.”

Eversource, one of the region’s largest energy utilities, is also required to perform a study over the next 12 months on the value of distributed generation, focused on solar and small hydropower, using a 10- to 15-year framework for the analysis.

“Our initial look tells us that the PUC adopted the common elements of two settlements that were developed and is committed to resolving remaining differences,” said Martin Murray, spokesman for Eversource. “There seems to be broad agreement that everyone who uses the energy grid should share fairly in the cost of the grid. Eversource is looking forward to participating in the working groups and studies that the order indicates will soon get underway.”

Kreis said he was concerned that the order didn’t mention anything about community solar, a system where multiple properties can share the financial benefits of a single solar power system.

“We believe it is critical to provide meaningful opportunities for all Granite Staters to take part in distributed generation, even if they lack the financial resources or live in the shade or rent their premises. We will consider a motion for rehearing to address this issue,” he said. “The commission opened this docket at the express command of the Legislature, which wanted progress away from old-fashioned net metering. It will be interesting in the days ahead to see what key legislators think about the results the docket yielded.”

During the legislative session, lawmakers were considering a bill that would eliminate the cap on net metering, but it was tabled in anticipation of the PUC’s ruling with the hopes of revising it in 2018. Solar advocates did not like the wording of the legislation, but it’s not immediately clear what they would do with the bill in the new session. Lawmakers could alter the PUC’s decision when they come back to Concord next year.

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The month of March hasn’t been good to Northern Pass and its parent company, Eversource. First, there were the conflicting media reports that its Canadian partner, Hydro-Québec (HQ), isn’t paying for any part of the hydroelectric transmission line in New Hampshire. Then, there were allegations that their Transmission Service Agreement (TSA) with HQ expired. Now, the Public Utilities Commission (PUC) ruled against a petition filed by Eversource for a 20-year Power Purchase Agreement (PPA) with HQ, and there is a competing bid from a rival energy company that could give them a run for their money.

In June 2016, Eversource announced it had reached an agreement with HQ that would guarantee at least 100 megawatts of electric energy would be available to New Hampshire consumers at lower than the average market prices from the proposed Northern Pass project. Northern Pass is the controversial transmission project running 192 miles from Canada to Deerfield.

Under the terms of the proposed PPA, HQ would sell and Eversource would buy 100 megawatts of electricity and then resell it to the wholesale energy market, which would include any net gains or costs of its purchases and sales in its electric distribution rates.

The plan would have put the terms in writing that the Northern Pass project would benefit New Hampshire by ensuring 10 percent of the total 1,090 megawatts of energy would have stayed in the state. However, the PUC ruled Monday that the PPA would be against state law.

“That proposal, however, goes against the overriding principle of restructuring, which is to harness the power of competitive markets to reduce costs to consumers by separating the functions of generation, transmission, and distribution,” the ruling states. “Allowing Eversource to use the [Stranded Cost Recovery Charge] mechanism as a ratepayer financed ‘backstop’ for its proposed 20-year PPA would serve as an impermissible intermingling of a generation activity with distribution rates. We cannot approve such an arrangement under existing laws, and accordingly dismiss Eversource’s petition.”

It’s important to note that a PPA is not required for the Northern Pass project to receive the green light from the Site Evaluation Committee (SEC), which will make a final decision on it this fall.

“A Power Purchase Agreement is not a requirement of our permit process, but the PPA was proposed as a response to many, including business leaders and policy makers, who asked for a guarantee that New Hampshire, as host state of the Northern Pass project, will receive its fair share of energy from the project and economic benefits above and beyond those received by other New England states,” said Martin Murray, spokesman for Northern Pass, in an email to NH Journal.

Senate Bill 128 is being currently consider in the New Hampshire Senate and would make the restructuring law more flexible to allow the PPA. The Senate is scheduled to vote on the bill on Thursday.

“We know there is broad support in the Legislature to provide regulators with assurance that they have the authority to consider whether proposals like the PPA would be in the best interest of customers,” Murray said. “SB128, if passed into law, would provide that assurance.”

Opponents of the Northern Pass project applauded the decision saying it’s a risky project that could put ratepayers at risk.

WHO PAYS FOR PROJECT IS STILL MURKY

Eversource has also received criticism in the past few weeks over the confusion on who is ultimately paying for the Northern Pass project. Canadian media started a firestorm after HQ officials were quoted saying they would not “pay a penny” for the Northern Pass line in the United States.

HQ issued a statement saying it won’t abandon the project and that the Canadian reports were written in error.

However, the public relations clean up from HQ and Eversource was messy and left more questions than answers for concerned parties. Allegations came up that the two energy companies had an expired TSA, which is required by the Federal Energy Regulatory Commission (FERC) before the project could be approved by the SEC and it specifies the respective rights and obligations of the parties involved in the project, including the terms for recovery of costs.

In the original TSA approved by the FERC in 2010, it states that HQ would pay for initial construction costs and Eversource has repeatedly said that New Hampshire ratepayers would not foot the bill for the project.

Yet, HQ’s recent comments about not paying for the line in the United States seem to contradict what the TSA states.

“I am concerned that the means for payment and assurance of profitability sought by HQ may have effects on the quantification of benefits of the project to the people of New Hampshire,” wrote senior assistant attorney general Peter C.L. Roth in a March 20 letter on behalf of the Counsel for the Public to Eversource.

“On numerous occasions, in the Application and accompanying testimony, the Applicants have expressly stated that HQ or one of its subsidiaries would pay for the entire costs of the line,” he added.

Marvin Bellis, senior counsel for Eversource, responded to the letter on Tuesday, which was obtained by NH Journal, stating that the TSA is still in full force, but did not directly answer Roth’s questions about the cost of the project.

“To the extent you have further questions about these issues you will be free to inquire about them during cross examination when the hearings commence in April,” he wrote. “However, as noted above, the fundamental financial structure of the Project has not changed, and you, as the Counsel for the Public, are in no different a position today vis-à-vis the TSA than you were at the time the application was filed.”

The trial-like adjudicative hearings are scheduled to begin in April and run for about 40 days before the SEC makes a decision on the application by September 31.

This spring, the Commonwealth of Massachusetts is expected to seek a “request for proposals” for clean energy delivered to customers. If Eversource and HQ are successful in winning the proposal bid, they will modify the current TSA agreement or add a new one. Regardless if they get the nod or not, Eversource reiterated that New Hampshire customers would not pay for the transmission line.

However, the bill could end up being paid by Massachusetts ratepayers. HQ said its expecting Massachusetts electric companies, who in turn could call on the consumers, to pay for the line.

“We know so far with certainty that it is the electricity distribution companies of Massachusetts who will be assuming the cost of this project,” HQ spokesperson Lynn St. Laurent told Canadian-media outlet The Suburban in a March 15 report. “As for the American portion of the proposed transmission line…once again, we say that [HQ] is not paying a cent for it, whether aerial or underground.”

NATIONAL GRID ADDS PROPOSAL TO MIX

To make matters even more complicated for Northern Pass, National Grid announced Tuesday that it wants to build a power transmission project from Canada to Londonderry.

Their plan, called the Granite State Power Link, would use wind and hydroelectric energy in eastern Canada and provide 1,200 megawatts to the region. It would transmit the power along 58 miles of line in Vermont, cross the Connecticut River into Littleton, N.H., and continue for 114 miles, before terminating in Londonderry.

The project has a $1 billion price tag, and would require 6 miles of new transmission lines in New Hampshire, mostly using its existing rights-of-ways in utility corridors.

Northern Pass welcomed the new project, stating it reiterates the region’s need for more renewable energy, but National Grid seemed less optimistic about both projects succeeding.

For comparison, Northern Pass is projected to cost $1.6 billion, provide 1,090 megawatts of power and be operation in late 2019 or early 2020. It would carry hydropower from Canada and new transmission lines would need to be built and some are expected to be buried.

Republican Gov. Chris Sununu has not weighed in on the project yet.

WAITING FOR SUNUNU, LABOR UNION REACTIONS

On NHPR Tuesday morning, Sununu reiterated his support for Northern Pass, before news broke about National Grid. He said it’s a “good project” and a “needed project” in order to keep energy costs down in the state for residents and commercial industries.

Sununu has been courting businesses across the globe since he was inaugurated in January, as part of his “100 businesses in 100 days” campaign pledge to woo them to set up shop in New Hampshire. He told NHPR he has spoken to businesses in the United States, including Arizona, but he has also spoken to ones in China and Taiwan.

It’s not immediately clear if he would change his support for Northern Pass to the National Grid project.

However, labor unions representing construction workers have also indicated they support the Northern Pass project.

North America’s Building Trades Unions sent a priority list to President Donald Trump earlier this year, which included Northern Pass on it.

McClatchy reported Monday that the White House requested the list of projects, as it switches gears and gets ready to focus on infrastructure. They were seeking projects to approve that require little to no federal funding.

It’s also not immediately known which energy project labor unions in New Hampshire would support.

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Over the weekend, Northern Pass officials were trying to clean up after a bad week in the press. Opponents to the hydroelectric transmission line from Canada to Deerfield were suggesting that Eversource, parent company of Northern Pass Transmission, LLC (NPT), and its Canadian partner, Hydro-Québec (HQ), were not on the same page for the project and New Hampshire residents would ultimately pay for it.

Eversource spent the last few days trying to correct the record after various reports stated that HQ would “not pay a penny” for the Northern Pass line in the United States. The issue began earlier this month when Québec stakeholders asked why the state-owned utility company was paying to bury part of the line in New Hampshire, but refused to do the same in Québec. That led to a series of public statements where HQ said New England electricity consumers would pay for the cost of Northern Pass.

“The claim that they are making, that New Hampshire ratepayers will not be paying any of this cost, needs to be backed up with evidence that Hydro-Québec agrees to that,” Will Abbott, vice president of policy for the Society for the Protection of New Hampshire Forests, told NH Journal. “It’s not clear that they produced any evidence that HQ has agreed to this as it has been proposed. It certainly seems like the Site Evaluation Committee (SEC) shouldn’t be proceeding if there is a question about that issue.”

Northern Pass has reiterated that New Hampshire residents would “not pay for any costs associated with the project.” It’s written all over their website.

However, groups opposed to the project are not convinced that’s true and they point to an “expired” Transmission Service Agreement (TSA) between Eversource and HQ as proof that the two energy companies are not seeing eye-to-eye.

On Tuesday, Will Abbott, vice president of policy for the Society for the Protection of New Hampshire Forests, one of the biggest challengers of the Northern Pass project, sent a letter to U.S. Sen. Jeanne Shaheen asking for assistance in coordinating an inquiry to the Federal Energy Regulatory Commission (FERC) to determine the status of a TSA between the two entities.

“Northern Pass has repeatedly argued that New Hampshire ratepayers are not paying for the construction  costs of their project,” the letter states. “They repeatedly cite the TSA as the basis for their claim that Hydro-Québec is paying for the construction of the transmission line.”

The TSA is crucial to the project because it specifies the respective rights and obligations of the parties involved in the project, including the terms for recovery of costs. The FERC-approved TSA is also required before the project can be approved by the SEC.

A Caledonian Record report called into question the current status of the TSA agreement, which began in October 2010. The original agreement stated HQ would reimburse Eversource for all development costs of the now-estimated $1.6 billion Northern Pass line. In December 2013, and HQ amended the agreement, including an extension to the deadline for obtaining all regulatory approvals.

“The parties have agreed to replace the term ‘third anniversary’ with the term ‘approval deadline,’ which is defined to mean Feb. 14, 2017, or such other date to which the parties shall mutually agree in writing,” the agreement states.

In the Forest Society’s letter to Shaheen, they claim that “it has become apparent” that the TSA “has expired, without any replacement agreement.”

“As of today, there is no record that HQ and NPT have agreed on a new TSA, or that they have submitted any new TSA proposal to FERC for its review,” the letter states.

Eversource responded Friday with their own letter to Shaheen saying the Forest Society “wrongly claims” that the TSA expired on February 14.

“The Approval Deadline was, in fact, extended earlier this year by written agreement between NPT and HQ,” the letter states. “Accordingly, the extension of the Approval Deadline was fully consistent with the terms and conditions of the already approved TSA.”

Northern Pass posted Thursday on its website that the term of the TSA began on the original execution date in October 2010 and continues 40 years from the time Northern Pass begins operation, unless it is terminated earlier.

Craig Cano, a spokesman for the FERC, made it clear that the TSA between Eversource and HQ still exists and is in use.

“The TSA was accepted with a 40-year term so [it] does not need to be ‘renewed’ in 2017,” he told NH Journal. “The item…may have confused the provision that set the Feb. 14, 2017 deadline for obtaining all regulatory approvals with the agreement itself.”

That means that Eversource and HQ, back in 2014, set a February 14 deadline for regulatory approvals — state, local, provincial, or federal — that the parties must obtain for the project. The SEC, a regulatory agency, still hasn’t put their final approval on the project, and isn’t expected to make a final decision until this fall. The amended language in the TSA allows for Eversource and HQ to agree on another date for those final approvals, but it doesn’t invalidate the whole TSA, or mean that the agreement has expired.

Martin Murray, spokesman for Northern Pass, told NH Journal that Eversource and HQ agreed in writing earlier this year to extend the deadline and the extension does not need to be filed with the FERC. The extension of the agreement is until 2020 and a copy of the written agreement will be filed with the SEC this week.

Adjudicative hearings of the Northern Pass docket are expected to begin in April, with the SEC to make a final decision on the project by September 30.

Gov. Chris Sununu voiced his support for the project again when he was in Montréal on Monday, as part of his campaign tour to bring businesses to New Hampshire.

“Given our economic dynamics in New Hampshire, given our need for lower energy prices, our rich history with our manufacturing industry, there is no doubt that Northern Pass presents a great opportunity for New Hampshire, a great opportunity for Québec,” he told members of the Canadian press. “It’s a win-win on both sides. It’s a project I always said should happen, could happen, and I believe has to happen.”

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