As Maine Gov. Janet Mills on Tuesday signed into law a bill that would eliminate the state's gross metering and reestablish net metering, another fight over solar compensation is brewing in the Northeast.
Last year, Connecticut's legislature passed Senate Bill 9, which included provisions to phase out net metering in October of this year, making it the only state in the northeast to have such legislation in place.
House lawmakers in the Energy and Technology Committee looked to scale back the law earlier this month, unanimously passing House Bill 7251 out of committee, which would extend the net metering program through Dec. 31, 2021. But lawmakers and developers worry about what will happen if it doesn't pass, and question why Connecticut is pursuing solar policies that are widely seen to have failed by clean energy advocates and lawmakers in Maine, Nevada and other states.
"...why [Connecticut Democratic] Governor Lamont and his energy department would attempt to implement a failed solar policy from Governor LePage is difficult to understand."
Stephen Lassiter
Public Policy Manager, Sunrun
Under current law, retail rate net metering will be replaced with a renewable energy tariff set by the Public Utilities Regulatory Authority (PURA) at the end of this year. But PURA has not yet come up with a new rate, so net metering will be completely phased out at the end of this year with no replacement tariff if HB 7251 doesn't pass.
The solar market "is currently facing a cliff," Sunrun Public Policy Manager Stephen Lassiter told Utility Dive.
As the law stands, one of the two tariff replacement options would be a buy-all, sell-all tariff, comparable to former Republican Gov. Paul LePage's gross metering tariff in Maine. The other option is a net fee-in-tariff, with a to-be-determined netting period.
The former Maine governor was seen as anti-renewables, and his administration has often been characterized by its clean energy rollbacks including the gross metering replacement on net metering and a moratorium on wind energy permits.
"I'm concerned that the evidence that this such a program works simply does not exist across the country," Lassiter said. "And why [Connecticut Democratic] Governor [Ned] Lamont and his energy department would attempt to implement a failed solar policy from Governor LePage is difficult to understand."
The difference between Connecticut and other states is that it is not trying to disincentivize renewables, Connecticut Department of Energy and Environmental Protection Deputy Commissioner of Energy Mary Sotos told Utility Dive.
Even when other states don't explicitly push an anti-renewables narrative, they still will often "set alternative rates or tariffs so low as to be prohibitive of any renewables actually getting developed."
"From our perspective, those are absolutely not the outcomes that we are looking for," she said.
Although she understands why solar developers in the state may be nervous, she emphasized that renewables were essential to addressing specific fuel security needs in the state. "All of the planning documents that have come out of our department for the last many years have been saying the same thing: We need a lot of renewable energy."
The fight over net metering
Replacement tariffs are controversial to solar developers because they typically reduce the overall payment received by distributed solar hosts, slowing the growth of the sector. Utilities, meanwhile, say that net metering allows those solar hosts to shift their service costs to non-solar customers.
New England has the highest electricity prices in the country, according to the U.S. Energy Information Administration, with Connecticut trailing Massashusetts and Rhode Island for the most expensive across all sectors in January of 2018.
Because of that, rates are a major focus in the state, said Rep. Jonathon Steinberg, D, who is on the Energy and Technology Committee. Steinberg has previously brought forward legislation on more transparent utility bills to "separate out those things that are in theory fixed costs that are caught up in volumetrics" rather than assume net metering customers are the cause of the "cost shift delta."
"...the amount of solar today, which of course has been built up over the past decade-plus, would have to quintuple for, in our view, even us to start seriously having any conversation about a cost shift."
Stephen Lassiter
Public Policy Manager, Sunrun
"I'm all in favor of a level playing field and for solar customers to pay their fair share of fixed costs," he told Utility Dive.
"In fact, I'd be perfectly willing to have an explicit line on the electric bill that indicates those fixed costs and no longer capture them under any volumetric charges, if that's what the utilities require. But I reject the idea that we should go away from a somewhat-subsidized industry, which is still in this growth phases and is creating jobs here in the state of Connecticut simply because of a punitive cost shift."
Solar advocates argue that the cost shift argument is not valid in the state because current penetration is so low — at less than 1.5%, according to the Solar Energy Industries Association. In order for cost shifts to even be measured, penetration would have to reach at least 10%, Lassiter said.
"So the amount of solar today, which of course has been built up over the past decade-plus, would have to quintuple for, in our view, even us to start seriously having any conversation about a cost shift," he said.
But DEEP is not focused on the cost shift aspect, said Sotos. The cost shift is a "premise that needs to be tested," whereas the question DEEP has is whether the retail rate is the right price to be paid.
"The argument is, even if you're at low levels of deployment, if you're paying less than you should, then that's a problem. If you're paying more than you should, that's a problem," she said.
A muddled outlook for Connecticut
"I don't entertain the premise on the cost shift," said The Department of Energy and Environmental Protection (DEEP) Commissioner Katie Dykes, during a hearing on HB 7251. The department faces a lot of "technical challenges and clarifications" in setting a new distributed solar tariff, but does not "want to end the process entirely," she said.
"It was interesting to hear the DEEP commissioner confirm this point that, 'Look, we're not changing policy for concerns about a cost shift," said Lassiter, adding it made the decision to eliminate net metering "all the more mystifying."
The solution for now is HB 7251, which extends the timeline for phasing out net metering and calls for a value of solar study in the next two years. But lawmakers say that fix is temporary at best.
"Shouldn't we have an indefinite pause and not count on the explanation that we can get this done in two years?" asked Steinberg during the hearing. Steinberg has been asking for a value of solar study "as long as five years ago," he told Utility Dive.
But at the hearing, Dykes said her office was in favor of the extended timeline that HB 7251 bill gives utilities, regulators and lawmakers in coming up with a solution. However, she said, the committee should peg the end of net metering "to a specific date in the future."
"What's the big rush? Let us talk about grid modernization. Let's talk broadly about distributed generation. Let's talk about the things that are part of our future before we start unilaterally removing one piece of the puzzle."
Jonathon Steinberg
Democratic Representative, Connecticut
Concerns for the department were more on the implementation side than the development side in terms of establishing those rates, said Sotos, adding DEEP "felt confident in the timeline that was laid out."
The main problem, according to Steinberg, is DEEP is rushing into something that utilities aren't prepared for and is not yet an issue for ratepayers. Utility solutions moving forward should focus on grid modernization and technologies, rather than exclusively on ratemaking, he said.
"What's the big rush?" he said. "Let us talk about grid modernization. Let's talk broadly about distributed generation. Let's talk about the things that are part of our future before we start unilaterally removing one piece of the puzzle."
