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NH Utility Regulators Lift Cap on Net Metering For Residents With Solar-Powered Homes

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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Why Net Metering Could Be A Divisive Issue This Year For Lawmakers

It’s an issue that’s been put on hold since last May, but soon enough, New Hampshire lawmakers are going to have to tackle net metering again. And last time, it took some serious convincing to get everyone on board.

Net metering is a policy that allows residents and businesses who use certain renewable energies, like solar, to sell excess electricity back to the grid at the same price they are spending when they buy energy from the grid. That means, when you get more electricity than you need or use in the summer months, for example, your local electric distributor keeps track of the surplus and gives you credit at their retail rate (for residents) for when you’re not getting enough during the dark, winter months. Larger consumers receive the wholesale rate, which is less than the retail rate.

But all of the state’s utilities are either approaching or have reached the statutory limits allowed for renewable energy, which is 100 megawatts — or 100 million watts. It’s apportioned to the utilities based on the number of customers each serves. That seems like a big number, but most people’s solar array for their homes run about 5 kilowatts (5000 watts).

Lawmakers created that arbitrary cap years ago when it was almost inconceivable that a limit would be reached. But over the years, solar energy increased in popularity and now many states are trying to figure out what to do.

The issue is that a lot of people don’t think this arrangement is fair. Electric utilities argue that solar customers still use the grid, but are zeroing out their bills with a “subsidy.” They say the costs are being pushed to electric customers who don’t have solar.

Solar advocates argue that there are benefits, such as reduced carbon emissions. Also, by having less demand on power lines during summer months, utilities can pass on those savings to other consumers.

Just last year, former Democratic Gov. Maggie Hassan signed a bill lifting the cap on net metering after most state utilities reached the limit. Originally, the net metering cap was 50 megawatts, but the House bill was raised to 100 megawatts. An earlier Senate version of the bill only increased the cap to 75 megawatts, but energy advocates said that wouldn’t be enough to fend off job losses in the solar industry, which ended up happening anyway. It took some Republicans a while to hop on board with raising the cap, which is why any bill on net metering could see some hurdles in the Legislature.

The bill also required the Public Utilities Commission (PUC) to review current net metering rates and set new ones. The results of their findings are expected to be released in May.

A new bill in the House Science, Technology and Energy Committee says it would eliminate the cap on net metering. However, the sponsor of House Bill 518, Rep. Richard Barry, R-Merrimack, said he plans on retaining the bill in committee until PUC releases its suggestions and then another public hearing would be held.

That didn’t stop solar advocates coming out in droves on Wednesday to list their concerns with the bill. Many attendees said they were excited about the possibility of eliminating the cap all together. But some of the language in the legislation led them to call it “a half truth and a booby trap for the growth of renewable energy.”

Specifically, they didn’t like how they eliminated the cap but were changing the net metering tariff to the average monthly wholesale energy rate, and not keeping it at the retail rate.

Holly Grossman, a resident of Barrington, said she has a solar array on her roof that takes care of all her energy needs.

“I would hate to see solar energy go down in the state,” she testified to the committee. “It’s very important for our economy. If we didn’t have it, what would we replace it with? Fossil fuels?”

It’s important to note that the legislation does not call for getting rid of net metering all together. That’s something solar advocates say would give too much control to monopoly utilities and could lead to new taxes on solar users and higher electricity rates for all customers. The bill calls for eliminating the cap, but it also includes the change in energy rate to the wholesale amount.

But that’s a change some businesses believe would be fairer.

Stefanie Lamb, vice president of public policy for the Business and Industry Association, said her group supports the bill and setting the tariff at the wholesale rate.

“People say we’re not supportive of the renewable energy industry by not opposing the bill,” she said. “We are supportive of it to help with the energy challenges in our state. But if our businesses are large energy users and make up a large part of our state’s economy. And then if they leave because the cost of business is getting outrageous, then we have a far bigger problem.”

Rep. Barry said it’s likely the bill would be changed or amended after PUC makes its recommendations. Most of the attendees applauded the move to table the bill until their study is done.

Other solar companies testified about how the bill in its current form would force them to close their doors and how they encourage young people to stay in New Hampshire, a problem the state is facing.

“Young people are leaving the state and we are providing clean tech jobs,” said Eric Shifflett of Granite State Solar. “Millennials are who we try to attract and hire. But this bill would put us out of business.”


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