Maine PUC opens net metering inquiry

Monday, July 6, 2020

Maine is approaching or has passed a net metering milestone, as state utility regulators have opened an inquiry triggered by a statute calling for an evaluation when the total amount of generation capacity involved in net energy billing in Maine reaches 10% of the state's transmission and distribution utilities' total maximum electric load.

In 2019, the Maine state legislature enacted a law that substantially reformed Maine's net energy billing (NEB) programs. Major changes included allowing larger projects to participate (less than 5 megawatts, up from 660 kilowatts); removing any limit on the number of meters or accounts that can be associated with an eligible facility; replacing an ownership requirement with a more flexible “financial interest” requirement; and adopting an additional alternative “commercial and institutional” NEB program providing monetary bill credits instead of volumetric bill credits. These changes, in addition to other enactments and broader dynamics in energy markets, have led to a significant increase in interest in Maine net metering.

The 2019 law also included a requirement that the Maine Public Utilities Commission evaluate net energy billing "when the total amount of generation capacity involved in net energy billing in the State reaches 10% of the total maximum load of transmission and distribution utilities in the State or 3 years after the effective date of this Act, whichever comes first." The law requires the Commission to evaluate the effectiveness of net energy billing in achieving state policy goals and providing benefits to ratepayers, and to report its findings to the legislative energy committee.

On May 20, 2020, Maine's largest investor-owned transmission and distribution utility, Central Maine Power Company (CMP), provided notice that, at that time, the cumulative capacity of the generating facilities for which CMP has executed NEB arrangements under Chapter 313 was approximately 10.1% of CMP’s annual peak demand.

In response, on July 6, the Commission issued a Notice of Inquiry to obtain information for an evaluation of the state's NEB programs. The Notice emphasizes that the Commission itself will not alter NEB as a direct result of the Inquiry, but rather that any changes would come from the Legislature:
At the outset, the Commission emphasizes that CMP's 10% notification and the initiation of this Inquiry to gather relevant information for the required evaluation does not implicate any suspension of the programs governed by the existing NEB rules (Chapter 313) which, as noted above, have been authorized by the Act. Any changes to these programs, including to their availability, can only occur through the legislative process. 
The Notice directs Maine's two investor-owned utilities, CMP and Versant Power, to provide a monthly report on NEB projects, categorized in various ways, including by status (operational, non-operational but NEB-agreement-executed, or application-pending), and by program (kWh or monetary). For each project, each utility must provide specific information, including contact person, project location and size, resource type, new vs. previously existing, in-service date, “For NEB kWh Credit projects, estimated lost revenue ($/year)”, “For Tariff Rate projects, estimated costs (gross and net) of the credits ($/year)”, “Estimated incremental administrative costs associated with each of the two programs, by category ($/year)”, and “Information about T&D system benefits, e.g., avoided distribution upgrades, or system costs, e.g., required system reinforcements associated with NEB projects”.

Retail net metering programs such as Maine's forms of net energy billing have been adopted by regulators and utilities in nearly every U.S. jurisdiction. Utilities traditionally argue that net metering imposes costs on the system or on ratepayers. Some net metering proponents have historically countered that net metering provides substantial benefits to the system and to ratepayers, and that any theoretical downsides are nonexistent or minimal at low levels of net metering penetration, while others have argued that the system can safely and reliable handle larger amounts of net metering on the system.

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