Will Maine change its net metering law?

Several pieces of proposed Maine legislation could affect the state's version of net metering. Here's a quick look at Maine's net energy billing policy, how it could change, and what that might mean for consumers.

Maine's electricity rules allow consumers with certain distributed generation facilities (like solar panels) to elect "net energy billing." Like other forms of net metering, the basic concept is that consumers can use their on-site generation to offset their purchases of electricity from the grid, both in real time, and by banking credits for power exported to the grid during periods of time when on-site generation exceeds the consumer's load.

The Maine Public Utilities Commission first adopted a net energy billing rule in the 1980s, allowing customers to net imports and exports within any month or other billing period, in recognition that consumers should not be required to install an extra meter to measure exports from small renewable power facilities and other distributed generation. In 1998, the Commission revised its rule to allow annualized netting as a means of encouraging the use of small-scale renewable technologies designed primarily to serve the customer’s own needs.

In 2017, the Commission revised its rule to reduce the benefits of net metering for future projects, both by reducing the credit for nettable energy, and by shifting the state to a "gross metering" paradigm. Under gross metering, which has been called "one of the strangest and most regressive policies for valuing residential solar in the United States," utilities collect charges even for power generated and consumed on-site in real time. While the Commission later granted an exemption from its gross metering policy for most medium and large customers after finding that the cost of installing an extra meter (estimated at over $3,000 per installation) wasn't justified, the revised rule remains on the books for now.

But further possible changes to net energy billing figure among the numerous energy issues implicated by the list of legislation proposed for the Maine State Legislature's 2019 session. Several bills that have been printed so far suggest that the Legislature will consider various bills that would eliminate gross metering (like LD 91, An Act to Eliminate Gross Metering and LD 143, An Act To Protect Electric Ratepayers from Gross Output Metering Costs), or would replace net energy billing with a market-based mechanism (like LD 41, An Act To Replace Net Energy Billing with a Market-based Mechanism), among other measures. Other bill titles suggest possible changes to the state's policy on shared ownership net metering, which allows multiple customers to offset their load with generation from a community solar project or other off-site facility.

The Legislature's Joint Standing Committee on Energy, Utilities and Technology will schedule public hearings on these bills. The Committee has scheduled public hearings on LD 41 and LD 91 for 1:00 p.m. on January 29, 2019.

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.