Massachusetts community microgrid projects solicited

A Massachusetts economic development agency focused on clean energy has launched a program seeking to catalyze the development of community microgrids throughout Massachusetts.

Generally speaking, a microgrid is a localized power grid that can disconnect from the traditional grid to operate autonomously.  According to the U.S. Department of Energy, a microgrid's ability to operate while the main grid is down means microgrids can strengthen grid resilience and mitigate disturbances, while enabling faster system response and recovery once reconnected to the main grid. Microgrids can also support flexibility and efficiency, by enabling the integration of growing deployments of renewable and distributed energy resources like solar, and by reducing energy losses in transmission and distribution.
 
A "community microgrid" could be defined in several ways, but a typical definition focuses on a multi-user microgrid providing electrical and/or thermal energy to multiple consumers, integrated with and supported by the local community, relevant utilities, and building or site owners.  As with other microgrids, a community microgrid implementation could reduce energy costs and reduce greenhouse gas emissions, while providing increased energy resilience.

While federal support for microgrids has existed for years, states are now becoming active in exploring how microgrids can help meet society's energy needs and policy goals. Massachusetts is one hotbed of interest in microgrids, and a recently announced program could help stimulate the microgrid industry. The Massachusetts Clean Energy Center’s (MassCEC) Community Microgrids Program anticipates providing about $75,000 in funding to support each of 3 to 5 prospective community microgrid projects with the following characteristics:

• Are community, multi-user microgrids (as opposed to single owner or campus-style microgrids) located in Massachusetts -- but MassCEC will consider proposals from Applicants with an existing campus wishing to extend the microgrid to additional parties outside of its borders;
• Demonstrate significant potential to reduce greenhouse gas emissions through the integration of energy efficiency, Combined Heat and Power (“CHP”), renewable energy systems, electric and/or thermal storage technologies, demand management, energy efficiency, and other relevant technologies;
• Have the active and engaged support of the local utility (either investor-owned or municipal light plants) and other relevant stakeholders;
• Encompass a public or private critical facility, including but not limited to schools, hospitals, shelters, libraries, grocery stores, service (gas) stations, fire/police stations or waste water treatment plants;
• Support the distribution system by addressing capacity concerns, providing black start capability, facilitating renewables integration, or providing other services that are meaningful to the local utility;
• Attract third party investment; and 
• Highlight Massachusetts-based clean energy/microgrid technology.

MassCEC is presently soliciting Expressions of Interest from groups interested in participating in feasibility assessments for community microgrid projects meeting its defined criteria.  According to MassCEC, respondents may include municipalities and their public works departments, electric distribution companies, municipal light plants, emergency services departments, owners of critical infrastructure such as hospitals and financial institutions, self-organized groups of commercial building owners, developers or any other actor that either owns property within a potential microgrid or can demonstrate that they represent stakeholders with the capability of developing a community microgrid.  Support from the local government and the relevant electric or gas distribution company is also required.

MassCEC says it intends its funding to support feasibility assessments to advance the selected microgrid projects through the early project origination stages, enabling them to attract third-party investment. Projects that produce a favorable feasibility assessment may then be eligible for additional technical assistance or grants for later stages of project development

Completed expressions of interest, including all required documentation, must be received by MassCEC by Friday, June 23, 2017 by 4:00pm. MassCEC anticipates awarding the first round of feasibility assessments in Q3 2017.

Maine community solar procurement bill, LD 1444

This week a committee of the Maine state legislature is scheduled to hold a public hearing on a bill that would direct state regulators to enter into long-term contracts to procure 120 megawatts of large-scale community solar distributed generation resources by 2022.  While Maine law currently allows some community-scale solar development, LD 1444, An Act Regarding Large-scale Community Solar Procurement, would create new structures geared toward state-sponsored long-term contracts and could open the door to broader ownership of or participation in community-scale solar in Maine.

If enacted into law as drafted, the bill would direct the Maine Public Utilities Commission to hold a series of four annual competitive solicitations by January 1, 2022.  Each solicitation would seek to procure 30 megawatts of large-scale community solar distributed generation resources.

Through an initial solicitation to be held by March 1, 2018, the Commission would set a uniform clearing price or "standard solar rate" for all awarded bids in the initial procurement.  Subsequent procurements would be subject to a declining block contract rate, under which the Commission would reduce the rate relative to the previous procurement by up to 3%.  But if the Commission were to conclude that a subsequent solicitation was not competitive, no bidders may be selected and the capacity available in that solicitation will be deferred to a subsequent solicitation.

Any resource selected for contracting would be offered a standard contract for a term of 20 years at the specified contract rate.  The resources' counterparty would be a "standard buyer" whose mission would be to "aggregate the output of the portfolio of distributed generation resources procured pursuant to this chapter and sell or use the output of these resources in a manner that maximizes the value of this portfolio of resources to all ratepayers."  Initially, the bill designates each investor-owned transmission and distribution utility as the standard buyer for its own service territory, but it would allow the Commission to designate another entity if doing so is in the best interest of ratepayers.  The benefits and costs of the procurement, shall be tracked and reviewed annually, and any gains would be allocated to from ratepayers of the project's host utility -- just as any losses would be recovered from those ratepayers.

On the project side, LD 1444 would establish a sponsor/subscriber model for large-scale community solar distributed generation resources.  A project sponsor would own or operate the resource.  A customer could subscribe for a proportional interest in such a resource, sized to represent at least one kilowatt of the resource's generating capacity.  Several additional requirements include:

• The total expected annual value of all of a customer's subscriptions must not exceed 120% of the customer's most recent annual electricity bill. 
• At least 50% of the subscriptions to a large-scale community solar distributed generation resource must be for 25 kilowatts or less, unless a municipality accounts for more than 50% of the subscriptions to a large-scale community solar distributed generation resource.
• A municipality may not account for more than 70% of the subscriptions to a large-scale community solar distributed generation resource.

Once under contract, a project sponsor and subscribers receive the contract rate for the output of a large-scale community solar distributed generation resource that is fully subscribed. For any portion not subscribed, the project sponsor receives the wholesale rate.  Each subscriber will be allocated a bill credit based on its percentage interest of the facility's total production for the previous month.  These credits must be applied against the subscriber's monthly electricity bill.

LD 1444 is scheduled for a public hearing before the Committee on Energy, Utilities and Technology on April 27, 2017.

Maine considers community solar rules

As Maine utility regulators consider changes to the state’s net metering rule for solar panels and other customer-owned generation, revisions proposed by the Public Utilities Commission could change how consumers can participate in community and shared ownership solar projects.

For years, the Maine Public Utilities Commission’s rules have allowed “net energy billing,” a metering and billing mechanism that promotes the development and operation of smaller renewable generation facilities. Net metering is responsible for nearly all customer-owned solar power projects developed in Maine to date, including a handful of shared ownership or community solar farms. But as utility Central Maine Power Company reported that its customers' net metering reached 1% of peak load last year, the Commission launched a process to consider revisions to its net energy billing rules.

On September 14, 2016, the Commission released a Notice of Rulemaking along with proposed amendments to its rule. As proposed by the Commission, the amended rule would expand net energy billing in Maine in several ways. It would increases the size cap for an eligible facility by 50%, from 660 kilowatts to one megawatt. It would also recognize four different types of net energy billing arrangements that would be allowed: individual customer; customer leases; shared ownership; and community NEB.

Under the shared ownership model, each participating customer must have a shared ownership interest in the eligible facility under which the customers have joint responsibility for the costs of the shared ownership facility and have rights to the output of the shared ownership facility in proportion to their cost responsibilities. Under shared ownership net energy billing, the transmission and distribution utility would allocate the nettable energy of the shared ownership facility to customers in proportion to each customer’s ownership interest in the eligible facility.

The proposed rule would also explicitly allow for “community” net energy billing, a model that the Commission recognized as “increasing as a means to promote smaller solar installations.” The proposal suggests that community projects would have similarities to shared ownership projects, with additional registration and consumer protection provisions, but potentially with different ownership requirements.

The case over the rule change’s adoption remains pending for now. While some elements of the proposal would expand net metering opportunities, the proposal would also ratchet down the amount of energy that new projects could net against their T&D bill, from 100% in 2016 to 0% for new NEB customers after 2025. Elements of the Commission’s proposal remain controversial. Nevertheless the Commission’s proposal suggests a potential direction for future community solar projects in Maine.

Maine community solar farms

As the Maine legislature considers a bill to change the state's solar energy laws, opportunities for customers to participate in community solar farms are drawing interest.  As a result of this interest, some of the legal structures within which Maine community solar projects operate may change.

Community solar farms offer one model for connecting electricity consumers with solar power.  While there are various definitions of what qualifies a project as "community solar", most concepts feature a solar-electric system that provides power or financial benefit to, or is owned by, multiple community members.  This shared ownership, or shared benefit, is key to the community renewable energy model.

The Solar Energy Industries Association notes 25 states with at least one community solar project on-line, with 91 projects and 102 cumulative megawatts installed as of early 2016.  According to the National Renewable Energy Laboratory, interest in the community solar segment flows from "the recognition that the on-site solar market comprises only one part of the total market for solar energy."  Renters, those with shaded or otherwise unsuitable roofs, or anyone choosing not to install a residential system at home might prefer to invest in an off-site, shared ownership solar project.

State laws or regulations typically shape how customers can participate in community solar projects.  For example, Maine's current community solar model relies on the state's shared ownership net energy billing regulations. The Maine Public Utilities Commission rules governing "net energy billing" require investor-owned transmission and distribution utilities to offer net energy billing to any customer of a transmission and distribution utility that owns or has the legal rights to energy generated using an eligible facility.

The current Maine rules allow up to 10 customer accounts to be netted against a commonly-owned eligible generating facility located in the same utility service territory.  These accounts must belong to "shared ownership customers" -- customers that have an ownership interest (or legally enforceable rights and obligations) in the generating facility.  Participating customers must have joint responsibility for the costs of the shared ownership facility, as well as the rights to the benefits of the project's output in proportion to the cost responsibilities.  The local public utility will allocate the project's generation output among the participants, along with any banked credits, based on each customer's ownership interest in the project. 

Under these shared ownership net metering regulations, a solar project in South Paris developed in 2014 became Maine's first shared ownership community solar farm, and a project in Edgecomb became Maine's second operating community solar farm in 2015.  Other community solar projects are under development.

But when community solar projects rely on state laws, they may be affected by changes in law.  The Maine legislature is now considering a bill that would change Maine's solar energy law.  LD 1649 would largely replace a billing treatment called net metering with a series of long-term contracts and utility procurement orders.  It would establish a procurement target for large-scale community solar distributed generation resources of 45 megawatts by 2022.  Under this model, project sponsors would propose projects (up to 5 megawatts each) and could bid for long-term contracts to sell the project output to the local utility.  Project sponsors would recruit "subscribers" to take proportional interests in the resource, with each subscription sized to represent at least one kilowatt of the resource's generating capacity. Each subscriber would receive a bill credit based on his or her percentage interest in the project's production.

This model could enable more than 10 customer accounts to participate in a shared ownership solar project, which would address the limit on how many customers may participate in a community solar project under current regulations.  This could enable an expansion of shared-ownership solar, albeit under a model that relies on power sales to the local utility, instead of self-consumption or net metering.  But LD 1649 could also have an impact on those community solar projects already operating or under development, because it would effectively end net metering and offer only limited grandfathering of existing projects.

One alternative that could support community solar without impacting existing projects would be to expand the net metering paradigm, for example by allowing municipalities or groups of consumers to participate in larger projects that could offset more customer accounts.  For example, Massachusetts encourages municipal participation in solar projects by allowing governmental entities to net meter larger projects than individual customers.  Maine could adopt a similar model, expanding opportunities for municipally owned or shared ownership solar projects.

The Maine legislature's Joint Standing Committee on Energy, Utilities, and Technology held a public hearing on LD 1649 on March 16.  The committee is expected to give the bill further consideration this month.

Maine solar legislation released

The Maine legislature has printed a bill whose enactment would reshape the state's solar energy laws.  The bill, An Act To Modernize Maine's Solar Power Policy and Encourage Economic Development, has been numbered as LD 1649.  It would replace a billing treatment called net metering with a series of long-term contracts and utility procurement orders.

Solar photovoltaic panels on the roof of Gallagher's Auto Parts, in Patten, Maine.

Under net metering or “net energy billing,” an electric utility invoices a customer with solar panels based on the difference between the customer's energy use and the solar project's output.  If the generator output exceeds monthly usage in any billing period, the customer earns kilowatt-hour credits that can be banked and netted against future usage.  The bipartisan non-governmental organization National Conference of State Legislatures has noted that "Net metering policies have facilitated the expansion of renewable energy through on-site generation, also known as distributed generation."

But a 2015 Maine legislative resolve directed the Public Utilities Commission to convene a stakeholder group to consider alternatives to net energy billing, largely in the hopes of helping more consumers connect with solar power.  As part of that case, the state's Office of Public Advocate proposed a structure where individual solar projects would enter into contracts to sell solar power to their local utility.  While stakeholders developed consensus around exploring the concept, there was not uniform agreement around whether it should immediately replace net metering, or whether the new concept should operate "side by side" with net metering for some test period.

The bill now printed as LD 1649 largely reflects the contract-based, solar standard buyer proposal.  It would direct the Public Utilities Commission to enter into twenty-year contracts for the procurement of 248 megawatts of solar energy between 2017 and 2022.  The bill allocates 60 megawatts (24%) to grid-scale solar distributed generation resources; 45 megawatts (19%) to large-scale community solar resources; 25 megawatts (10%) to commercial and industrial resources; and 118 (47%) megawatts to residential and small business resources.  This would represent a significant expansion of solar capacity in Maine compared to what has been developed to date.

Under LD 1649, customers could seek contracts to sell solar power to a standard buyer (the utility) at prices set by the Public Utilities Commission. The standard buyer's stated role is to purchase the output of these distributed generation resources, aggregate the portfolio of resources procured, and sell it into the relevant New England markets. 

Consumers with projects up to 250 kilowatts in capacity could have two options.  The first is to sell the project's entire output to the utility under a contract, and buy all the customer's electricity requirements back from the utility in a separate transaction.  This is sometimes described as a "buy-all, sell-all" structure.

The second option is to use onsite generation to first offset electric consumption, and sell any excess electricity.  This would allow hourly offsetting of onsite load, but would not allow customers to carry forward monthly credits for excess production that could be used to offset future load.  This differs from net metering under Maine's current regulations, which measure net energy use over an entire month billing period, and carry credits forward for up to 12 billing months.

This contracting structure would effectively replace net metering. No new customers could participate in net metering once the new rules take effect.  Those residential and small business customers who already net meter their loads against a distributed solar project would face a choice: either seek a long-term contract under the new program, or elect to net meter for 12 more years.    

The bill would also largely eliminate Maine's policy of virtual net metering, which has allowed customers to net meter load at one site against a solar project located elsewhere in the same utility's service territory.

As of late on March 9, LD 1649, An Act To Modernize Maine's Solar Power Policy and Encourage Economic Development, had not yet been referred to committee, nor a public hearing scheduled.