Maine net energy billing rules, 2017 revision

On January 31, 2017, the Maine Public Utilities Commission adopted revisions to its rule chapter 313, governing net energy billing.  Net metering, or net energy billing, is the metering and billing mechanism that Maine and most other states have adopted to promote the development of solar photovoltaic and other distributed renewable energy facilities.  While the Commission first adopted a net energy billing rule in the early 1980s, its 2017 revisions to that rule reduce the benefits of net metering for future projects.  Here's a look at Maine's revised net energy billing rules.

The Commission described its actions in a written order dated March 1, and published its final rule on the same date.   Most notably, the Commission reduced the amount of future generation facility output that can be netted against its transmission and distribution utility bill -- by first introducing, then reducing, a concept called "nettable energy."  Nettable energy is now the entire amount of energy generated by the facility, including the amount consumed by a customer “behind-the-meter”.  This shift -- from netting on a net basis, to netting on a gross basis -- is a significant change in state policy that is unfavorable for behind-the-meter generation.

As before, a net energy billing customer with solar or other eligible generation may offset all of its energy supply bill with its nettable energy.  But the Commission's new rule phases out the former 100% crediting of net energy for transmission and distribution charges.  Depending on the year into which a project is placed in service, the new rule reduces the portion of the "nettable output" -- what counts for netting -- by 10% in each of the next 10 years, reaching 0% T&D crediting for customers that become net energy billing customers after calendar year 2026.  The result is a gradual reduction of the incentive to net energy bill.  (Note that once a customer becomes a net energy billing customer, its rate treatment will generally last for 15 years.  Likewise, existing net energy billing customers may continue to net bill under the previous rule's approach for a 15-year period, after which they could continue to net for supply but not for T&D.)

The Commission also added a section covering renewable energy credit (REC) aggregation.  Section 4 of Chapter 313 provides that new customers in 2018 and after may elect to have the RECs or environmental attributes of project power be aggregated by their local investor-owned utility for sale into the regional market, with the proceeds returned to participating customers.  The Commission described its decision to include a REC aggregation program as "an effort to obtain on an optional basis a value stream that is not currently being monetized."  If small renewable projects would qualify for RECs, but are either not doing so or are not selling the RECs, REC aggregation options may allow some projects to connect with the market.  On the other hand, by selling the RECs, the project owner or power consumer cannot claim to have consumed green electricity, so there are tradeoffs.

The Commission did not change some other aspects of the rule, such as maximum project size (660 kW) or its limit on the number of accounts or meters permissible under a single net energy billing arrangement (10).  It noted, "Fundamental changes to NEB in Maine and promotional programs for larger renewable and community solar projects are the purview of the Legislature as a matter of State energy policy."

Based on a list of legislative requests, the state legislature will consider at least 12 bills relating to solar energy in its 2017 session.

On March 10, the Commission published a Frequently Asked Questions document covering the Chapter 313 net metering rules.  The FAQ provides answers to 10 questions, ranging from why the Commission changed the rule, to providing specific examples of how much nettable energy a customer would be able to claim depending on the year in which its project was placed in service.

Maine biomass commission first meeting

A special commission formed by the Maine Legislature to study the economic, environmental and energy benefits of the state's biomass industry holds its first meeting this week.

The Maine State House, where the 2016 biomass resolve was enacted.

This spring, the Maine legislature enacted a resolve establishing the Commission to Study the Economic, Environmental and Energy Benefits of the Maine Biomass Industry. Known as Resolve 2015, chapter 85, the legislation established a study commission to examine the state's biomass energy resources, as well as public policy and economic proposals to create and maintain a sustainable future for the industry.

The Commission to Study the Economic, Environmental and Energy Benefits of the Maine Biomass Industry holds its first meeting tomorrow.  According to the agenda published for the first meeting, following introductions and a review of the resolve itself, the group will hear presentations from and hold discussion with a variety of people interested in biomass.  Presenters on the agenda include a Commissioner of the Maine Public Utilities Commission, the state's Public Advocate, and the executive director of the Efficiency Maine Trust.  Other speakers represent loggers, the wood pellet fuel industry, users of biomass energy fuels, the pulp and paper industry, and woodlot owners.  The agenda states that the meeting will also include a public comment period.

According to the agenda, possible future meeting dates for the Maine biomass commission include August 16 and August 30, 2016.

Maine biomass commission to meet

A commission charged by the Maine legislature to study the state's biomass energy industry will hold its first meeting next month.  The study committee's work will result in a report to the legislature, and could include recommended changes to state law.

The Maine State House.

At the end of its 2016 session, the Maine legislature enacted a resolve establishing the Commission to Study the Economic, Environmental and Energy Benefits of the Maine Biomass Industry.  The resolve directed the commission to:

1. Review and evaluate the economic, environmental and energy benefits of Maine's biomass resources, as well as public policy and economic proposals to create and maintain a sustainable future for the Maine biomass industry;
2. Consider the interconnection of economic markets for biomass and forest products and the energy policy of the State;
3. Consider whether the environmental, economic and energy benefits of biomass support updating the State's energy policy to strengthen and increase the role that biomass and the forest products industry play throughout the State;
4. Consider the costs of implementing any recommendations and the effect of leaving current policies in place; and
5. Examine any other issues to further the purposes of the study. 

The Maine biomass commission has now been formed, and has scheduled its first meeting for August 2, 2016.  As prescribed by the resolve, its membership includes a mix of legislators and others interested in the state's biomass energy policy.

The resolve directed the biomass study commission to submit a report and any suggested implementing legislation for committee consideration by December 6, 2016.

Biomass was a hot topic in the past legislative session.  On a separate track, this spring the Maine legislature enacted a law establishing a long-term contracting program for biomass-fueled power plants.  The Maine Public Utilities Commission has issued a request for proposals under that program, with contract proposals due on or before July 29, 2016.

Maine community renewable energy project winds down

Maine energy regulators will soon act on proposals for community-based renewable energy projects, as legal authority for a community energy pilot program winds down.

In 2009, the Maine Legislature enacted An Act To Establish the Community-based Renewable Energy Pilot Program, P.L. 2009, ch. 329.  The Act established a pilot program to provide incentives for the development of community-based renewable projects.  To qualify, projects must be “locally owned electricity generating facilities” (51% or more of the facility must be owned by “qualifying local owners”) and must not exceed 10 MW.  The Maine Public Utilities Commission was charged with administering the program, including certifying qualifying facilities.  To a community renewable energy project developer, the program offered the opportunity to win a long-term contract to sell project power to a Maine utility at predictable prices.

A 2015 law amended the community-based renewable energy program.  Among other changes, it required the Commission to perform a "viability assessment" of all projects that have been certified under the program but have not yet reached commercial operations.  For any projects the Commission determines will not be viable by December 31, 2018, the Act states that the Commission must revoke any contract awarded, though the projects will remain certified.  In September 2015, the Commission completed its viability assessment and identified approximately 21 megawatts of capacity that is available for contract awards. 

The 2015 law effectively provides that the Commission's authority to order utilities to enter into community-based renewable energy projects expires on December 31, 2015.   In light of the 21 megawatts of program capacity identified as available, on September 30, the Commission issued a request for proposals for projects seeking the remaining contract awards.

Proposals were due by November 6, 2015. According to the RFP,  the Commission will complete its evaluation of proposals and accept or reject proposals no later than December 31.

Maine PUC solicits standard offer proposals

The Maine Public Utilities Commission has issued Requests for Proposals for retail electricity standard offer service.  At stake is the right to supply default electricity service to customers of Maine's two largest utilities -- as well as the price those customers will pay for power.

Maine restructured its electricity sector in the late 1990s.  Formerly, utilities owned both power plants and the wires and other infrastructure needed to supply consumers with electricity.  But as of March 1, 2000, investor-owned transmission and distribution utilities may own and operate wires, but generally cannot have a financial interest in or otherwise control generation or generation-related assets.  Power plants became "deregulated" from the perspective of state retail rate regulation, and were sold off by the utilities.  At the same time, Maine law created a new kind of entity called a "competitive electricity provider" to perform the role of supplying electricity as a commodity.

Customers can choose among supply offers from competitive electricity providers.  Suppliers can offer specific types of product (e.g. 100% renewable power, locally-sourced) or particular contract terms (e.g. pricing schedules, payment terms).  Most large industrial energy consumers choose competitive electricity supply under this option, as do many commercial accounts and some homes.

If a customer does not choose a competitive electricity provider, that customer is placed on "standard offer service" by default.  Maine law requires the Maine Public Utilities Commission to arrange for standard offer service though a competitive bid process, and to ensure that standard offer service is available to all customers in Maine.

The pending RFPs cover retail electricity standard offer service for calendar year 2016 for all customer classes in the territories of Central Maine Power (CMP) and Emera Maine-Bangor Hydro District.  Collectively, CMP and Emera Maine deliver approximately eleven million megawatt hours annually, of which about 45% currently comes from standard offer service.

The RFPs and related materials are available on the MPUC website.  Initial proposals are due on October 6, 2015. Following negotiation of non-price terms and a submission of final bid prices, the Commission is expected to select one or more proposals,  Service terms will begin on January 1, 2016.