The Maine state legislature has voted to advance a bill that would amend the state's statute governing the net metering of small distributed renewable energy projects. If enacted into law, the amendment would reverse regulatory changes imposed in 2017 that reduced the value of net energy billing to participating customers.
Maine has allowed customers with distributed renewable energy generation to use the power they produce to offset their electricity bill since the 1980s. In 2017, the Maine Public Utilities Commission amended its rules governing net energy billing to reduce the amount of power that a customer could net against its electric utility bill. The Commission did this by inventing a concept called "gross metering," which allowed electric utilities to collect charges even for power generated and consumed on-site in real time, while requiring participating customers to install a second meter.
The "gross metering" concept was controversial for a variety of reasons, including the fact that it deterred customer adoption of solar power and other distributed renewables (by adding costs while cutting compensation), and the fact that for the first time ever it allowed utilities to collect charges from customers for power produced and consumed entirely on the customer's premises even where that power never went on utility grid facilities. The Commission later exempted most medium and large customers
from this policy after finding that the cost of installing an extra
meter wasn't justified, but left the gross metering requirements in its
Rule Chapter 313 governing net energy billing. In response, in 2019 various state legislators proposed bills that would alter or restore the net energy billing paradigm.
One of these bills has now received favorable votes in both the state House and Senate. LD 91, An Act to Eliminate Gross Metering, was originally sponsored by Representative Seth Berry. It clarifies the statutory definition of net energy billing, which currently defines the concept as "a billing and metering practice under which a customer
is billed on the basis of net energy over the billing period taking into account accumulated
unused kilowatt-hour credits from the previous billing period." As amended by LD 91, the definition would specifically define "net energy" as the "difference between the kilowatt-hours delivered by a transmission and distribution utility to the customer over a billing period and the kilowatt-hours delivered by the customer to the transmission and distribution utility over the billing period." This clarification removes the Public Utilities Commission's ability to define "net energy" in any other way. LD 91 also directs the Commission to amend its rules "to be substantively equivalent to the rules in effect on January 1, 2017" (that is, before the Commission's 2017 regulatory amendment.)
LD 91 faces additional votes in the state legislature, before it would move to the desk of Governor Janet Mills for her signature. The legislature is also expected to consider other bills affecting net energy billing or expanding incentives for solar development, later this session.
Energy powers society; society's choices shape energy policy. A blog about our energy resources and the choices they present for society.
Showing posts with label Maine PUC. Show all posts
Showing posts with label Maine PUC. Show all posts
Report on Maine renewable portfolio standard in 2013
Wednesday, May 6, 2015
The Maine Public Utilities Commission has issued a report on Maine's use of renewable electricity in 2013. The report shows the impact of Maine's renewable portfolio standard, a state law requiring electricity suppliers to source specified percentages of their electricity from “new” renewable resources.
Since 2000, Maine law has required electricity suppliers to include renewable energy in their portfolio of supply sources. Maine’s original electric industry restructuring legislation included a 30% eligible resource portfolio requirement. The eligible resource portfolio requirement, now referred to as Class II, mandated that each retail competitive electricity supplier meet at least 30% of its retail load in Maine from “eligible resources.” Eligible resources are defined in statute as either renewable resources or efficient resources. Renewable resources are defined in statute as fuel cells, tidal power, solar arrays, wind power, geothermal installations, hydroelectric generators, biomass generators, and municipal solid waste facilities. Renewable resources may not exceed a production capacity of 100 megawatts. “Efficient” resources are cogeneration facilities that were constructed prior to 1997, meet a statutory efficient standard and may be fueled by fossil fuels.
During its 2007 session, the Maine Legislature enacted an Act to Stimulate Demand for Renewable Energy. This Act established a new "Class I" standard, requiring Maine electricity suppliers to source specified percentages of their electricity from “new” renewable resources. Generally, new renewable resources are renewable facilities that have an in-service date, resumed operation or were refurbished after September 1, 2005. The Act set the initial renewable percentage requirement at 1% in 2008, increasing in annual one percentage point increments to 10% in 2017. Pursuant to the Act, the renewable requirement will remain at 10% thereafter, unless the Commission suspends the requirement.
The Commission's March 31, 2015 report, Annual Report on New Renewable Resource Portfolio Requirement, reports on renewable portfolio standard compliance activity in calendar year 2013. This lag between the study period and the report's issuance is driven by the timing of the most recently filed Competitive Electricity Provider (CEP) annual compliance reports, which were filed in July 2014 for calendar year 2013. In 2013, the Act required suppliers to source 5% of their power from new renewable resources. Suppliers can comply either by acquiring sufficient renewable energy certificates or RECs to cover their compliance obligation, or by paying an "alternative compliance payment".
According to the report, in 2013 suppliers purchased 727,291 Class I RECs from 21 certified generating facilities to meet the portfolio requirement. Nearly 97% of these RECs came from biomass facilities located in Maine. According to the report, 17 of the 21 facilities are biomass, three are hydro, and one is a wind facility. 18 of the 21 facilities are located in Maine, one is located in Connecticut, one is located in Massachusetts and one is located in Vermont.
The Commission's report also documents the cost of compliance in 2013. During 2013, the cost of RECs used for compliance with the Class I requirement ranged from approximately $1.50 per MWh to $60 per MWh, with an average cost of $19. 8 7 per MWh and a total cost of $14, 292,438. As noted in the report, the cost of Maine Class I RECs has dropped substantially since 2013, with the report citing a current trading range of $3.00 to $5.00. With minor use of the alternative compliance mechanism by two suppliers, the total cost to ratepayers during 2013 was $14,296,249, which the Commission's report translates into an average rate impact of about 0.12 cents per kWh (about 60 to 65 cents monthly for a typical residential bill, or a residential customer bill impact of about 1%).
The report also documents the 2013 costs of RECs used to satisfy the "Class II" eligible resource portfolio requirement as ranging from $0.00 per MWh (some RECs were included as part of an energy transaction at no specified extra cost) to $1.00 per MWh, with an average cost of $0.16 per MWh and a total cost of $589,386. This translates into less than three cents per month on a typical residential bill.
Since 2000, Maine law has required electricity suppliers to include renewable energy in their portfolio of supply sources. Maine’s original electric industry restructuring legislation included a 30% eligible resource portfolio requirement. The eligible resource portfolio requirement, now referred to as Class II, mandated that each retail competitive electricity supplier meet at least 30% of its retail load in Maine from “eligible resources.” Eligible resources are defined in statute as either renewable resources or efficient resources. Renewable resources are defined in statute as fuel cells, tidal power, solar arrays, wind power, geothermal installations, hydroelectric generators, biomass generators, and municipal solid waste facilities. Renewable resources may not exceed a production capacity of 100 megawatts. “Efficient” resources are cogeneration facilities that were constructed prior to 1997, meet a statutory efficient standard and may be fueled by fossil fuels.
During its 2007 session, the Maine Legislature enacted an Act to Stimulate Demand for Renewable Energy. This Act established a new "Class I" standard, requiring Maine electricity suppliers to source specified percentages of their electricity from “new” renewable resources. Generally, new renewable resources are renewable facilities that have an in-service date, resumed operation or were refurbished after September 1, 2005. The Act set the initial renewable percentage requirement at 1% in 2008, increasing in annual one percentage point increments to 10% in 2017. Pursuant to the Act, the renewable requirement will remain at 10% thereafter, unless the Commission suspends the requirement.
The Commission's March 31, 2015 report, Annual Report on New Renewable Resource Portfolio Requirement, reports on renewable portfolio standard compliance activity in calendar year 2013. This lag between the study period and the report's issuance is driven by the timing of the most recently filed Competitive Electricity Provider (CEP) annual compliance reports, which were filed in July 2014 for calendar year 2013. In 2013, the Act required suppliers to source 5% of their power from new renewable resources. Suppliers can comply either by acquiring sufficient renewable energy certificates or RECs to cover their compliance obligation, or by paying an "alternative compliance payment".
According to the report, in 2013 suppliers purchased 727,291 Class I RECs from 21 certified generating facilities to meet the portfolio requirement. Nearly 97% of these RECs came from biomass facilities located in Maine. According to the report, 17 of the 21 facilities are biomass, three are hydro, and one is a wind facility. 18 of the 21 facilities are located in Maine, one is located in Connecticut, one is located in Massachusetts and one is located in Vermont.
The Commission's report also documents the cost of compliance in 2013. During 2013, the cost of RECs used for compliance with the Class I requirement ranged from approximately $1.50 per MWh to $60 per MWh, with an average cost of $19. 8 7 per MWh and a total cost of $14, 292,438. As noted in the report, the cost of Maine Class I RECs has dropped substantially since 2013, with the report citing a current trading range of $3.00 to $5.00. With minor use of the alternative compliance mechanism by two suppliers, the total cost to ratepayers during 2013 was $14,296,249, which the Commission's report translates into an average rate impact of about 0.12 cents per kWh (about 60 to 65 cents monthly for a typical residential bill, or a residential customer bill impact of about 1%).
The report also documents the 2013 costs of RECs used to satisfy the "Class II" eligible resource portfolio requirement as ranging from $0.00 per MWh (some RECs were included as part of an energy transaction at no specified extra cost) to $1.00 per MWh, with an average cost of $0.16 per MWh and a total cost of $589,386. This translates into less than three cents per month on a typical residential bill.
Value of distributed solar energy
Thursday, October 30, 2014
What is the value of distributed solar photovoltaic electric generation? An investigation by the Maine Public Utilities Commission into this question is ongoing, and will culminate in a report to the state legislature this winter. At stake are policies and incentives to foster the growth of solar energy in Maine.
Distributed solar generation -- such as solar panels on rooftops and ground-mounted solar arrays -- is a small but rapidly growing sector of the U.S. energy mix. Solar panels can produce renewable electricity, with no direct fuel use, emissions, or reliance on foreign energy sources. Customer-sited and other distributed generation resources can also enhance the reliability of the local electric grid, and reduce the need for more expensive transmission and distribution upgrades. The growing shift to solar energy is also seen as a driver of jobs and economic development.
In recognition of these benefits, states and the federal government have enacted a variety of policies and incentives for solar power development and use. These policies include renewable portfolio standards which mandate that utilities source certain amounts of their power from renewable resources, as well as net metering policies which allow a customer to offset its power bill with energy produced from on-site solar panels.
But what is the true value of distributed solar energy resources? In an effort to find out, in 2014 the Maine Legislature enacted An Act To Support Solar Energy Development in Maine. This law is also known as the Maine Solar Energy Act, P.L 2013 Chapter 562 (codified at 34-B M.R.S. §§ 3471-3473). The law expresses the legislative finding that Maine's solar energy resources "constitute a valuable indigenous and renewable energy resource." Moreover, the law is predicated on the findings that solar energy development is unique in its benefits to and impacts on the climate and the natural environment, and that it can help Maine because it can displace fossil fuel combustion and associated air pollution and greenhouse gas emissions. The Act set a state policy "to encourage the attraction of appropriately sited development related to solar energy generation, including any additional transmission, distribution and other energy infrastructure needed to transport additional solar energy to market, consistent with all state environmental standards; the permitting and financing of solar energy projects; appropriate utility rate structures; and the siting, permitting, financing and construction of solar energy research and manufacturing facilities for the benefit of all ratepayers."
With these findings noted, the Act directed the Maine Public Utilities Commission to construct a report by February 15, 2015 on the value of distributed solar energy generation in Maine. In so doing, the Act requires the Commission to develop a method for valuing distributed solar energy generation. By statute, this method must, at a minimum, account for:
The Commission's investigation is ongoing. On October 23, 2014, the Commission released a draft of its consultants' initial report, "Maine Distributed Solar Valuation Methodology." That document is designed as a draft of the methodology to be used in the valuation phase, offered for public review and comment.
The Commission will accept written comments on the draft report until November 12, 2014. In addition, the Commission and its consultant, Clean Power Research, will hold a work session on the Draft Methodology on October 30, 2014.
Following the first phase to establish the valuation methodology, the Commission and its consultants will conduct a second phase in which the methodology will be applied to Maine to calculate the value of distributed solar generation. The Commission's work will be summarized in its report to the legislative energy committee, a draft of which the Commission plans to release in January 2015.
Distributed solar generation -- such as solar panels on rooftops and ground-mounted solar arrays -- is a small but rapidly growing sector of the U.S. energy mix. Solar panels can produce renewable electricity, with no direct fuel use, emissions, or reliance on foreign energy sources. Customer-sited and other distributed generation resources can also enhance the reliability of the local electric grid, and reduce the need for more expensive transmission and distribution upgrades. The growing shift to solar energy is also seen as a driver of jobs and economic development.
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| Rooftop solar photovoltaic panels on a business in Patten, Maine. |
But what is the true value of distributed solar energy resources? In an effort to find out, in 2014 the Maine Legislature enacted An Act To Support Solar Energy Development in Maine. This law is also known as the Maine Solar Energy Act, P.L 2013 Chapter 562 (codified at 34-B M.R.S. §§ 3471-3473). The law expresses the legislative finding that Maine's solar energy resources "constitute a valuable indigenous and renewable energy resource." Moreover, the law is predicated on the findings that solar energy development is unique in its benefits to and impacts on the climate and the natural environment, and that it can help Maine because it can displace fossil fuel combustion and associated air pollution and greenhouse gas emissions. The Act set a state policy "to encourage the attraction of appropriately sited development related to solar energy generation, including any additional transmission, distribution and other energy infrastructure needed to transport additional solar energy to market, consistent with all state environmental standards; the permitting and financing of solar energy projects; appropriate utility rate structures; and the siting, permitting, financing and construction of solar energy research and manufacturing facilities for the benefit of all ratepayers."
With these findings noted, the Act directed the Maine Public Utilities Commission to construct a report by February 15, 2015 on the value of distributed solar energy generation in Maine. In so doing, the Act requires the Commission to develop a method for valuing distributed solar energy generation. By statute, this method must, at a minimum, account for:
- the value of the energy;
- market price effects for energy production;
- the value of its delivery, generation capacity, transmission capacity and transmission and distribution line losses; and
- the societal value of the reduced environmental impacts of the energy.
The Commission's investigation is ongoing. On October 23, 2014, the Commission released a draft of its consultants' initial report, "Maine Distributed Solar Valuation Methodology." That document is designed as a draft of the methodology to be used in the valuation phase, offered for public review and comment.
The Commission will accept written comments on the draft report until November 12, 2014. In addition, the Commission and its consultant, Clean Power Research, will hold a work session on the Draft Methodology on October 30, 2014.
Following the first phase to establish the valuation methodology, the Commission and its consultants will conduct a second phase in which the methodology will be applied to Maine to calculate the value of distributed solar generation. The Commission's work will be summarized in its report to the legislative energy committee, a draft of which the Commission plans to release in January 2015.
Maine PUC declines to OK Statoil offshore wind term sheet
Thursday, October 4, 2012
Today the Maine Public Utilities Commission declined to approve a term sheet offered by Statoil North America, Inc. for a long-term power purchase agreement from its proposed Hywind Maine floating offshore wind project.
In 2010, Maine enacted a law designed to support the development of offshore wind and other marine renewable energy projects. Among other features, that law required the state Public Utilities Commission to conduct a competitive solicitation for proposals for deep-water offshore wind energy pilot projects, meaning grid-tied floating wind projects at least 10 nautical miles offshore. The statute gave the commission authority to direct mainland utilities to enter into power purchase agreements with one or more responding developers if certain minimum criteria were met. This authority was discretionary, meaning the commission could choose not to order the utilities to sign a deal even if it met those criteria.
In September 2010, the commission issued its request for proposals under the program. Over the ensuing years, Statoil emerged as the apparent leading respondent, proposing the "Hywind Maine" project, a four-turbine, twelve megawatt project south of Boothbay Harbor. Commission staff and Statoil negotiated the terms of a proposed power purchase agreement, which became public this summer. Among those terms was a proposed energy price of between $290 and $320 per megawatt-hour, escalating annually, for the first 41 gigawatt-hours of energy produced each year.
That term sheet was the subject of deliberations by the Maine commission this morning. After two hours of discussion, two of the three commissioners had stated that they would vote against approving the term sheet. They expressed concerns about the cost of the contract, as well as uncertainty over the deal's benefit to Maine and Maine ratepayers.
The Maine commission's action bears some resemblance to that of the Rhode Island Public Utilities Commission in 2010 when it rejected a proposed contract between utility National Grid and offshore wind developer Deepwater Wind on the grounds that $244 per megawatt-hour was not a "commercially reasonable" price. The Rhode Island commission ultimately approved a renegotiated deal with Deepwater Wind at a comparable price. Similarly, the Maine commission invited Statoil to revise its proposal to offer more benefits to Maine, and to present a renegotiated deal for further deliberation. Will Statoil be able to sweeten its offer and convince the commission that its contract is a good deal for Maine?
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| Sutton Island, Maine, about 80 miles downeast of the proposed Hywind Maine project. |
In September 2010, the commission issued its request for proposals under the program. Over the ensuing years, Statoil emerged as the apparent leading respondent, proposing the "Hywind Maine" project, a four-turbine, twelve megawatt project south of Boothbay Harbor. Commission staff and Statoil negotiated the terms of a proposed power purchase agreement, which became public this summer. Among those terms was a proposed energy price of between $290 and $320 per megawatt-hour, escalating annually, for the first 41 gigawatt-hours of energy produced each year.
That term sheet was the subject of deliberations by the Maine commission this morning. After two hours of discussion, two of the three commissioners had stated that they would vote against approving the term sheet. They expressed concerns about the cost of the contract, as well as uncertainty over the deal's benefit to Maine and Maine ratepayers.
The Maine commission's action bears some resemblance to that of the Rhode Island Public Utilities Commission in 2010 when it rejected a proposed contract between utility National Grid and offshore wind developer Deepwater Wind on the grounds that $244 per megawatt-hour was not a "commercially reasonable" price. The Rhode Island commission ultimately approved a renegotiated deal with Deepwater Wind at a comparable price. Similarly, the Maine commission invited Statoil to revise its proposal to offer more benefits to Maine, and to present a renegotiated deal for further deliberation. Will Statoil be able to sweeten its offer and convince the commission that its contract is a good deal for Maine?
Maine regulators approve tidal energy PPA concept
Wednesday, April 25, 2012
Yesterday, the Maine Public Utilities Commission approved the terms of a power purchase agreement between three large utilities and a hydrokinetic tidal power project in Maine waters.
Hydrokinetic energy projects produce electricity from moving water like tides, waves, ocean currents, or rivers, typically without dams. As I noted yesterday, a 2010 Maine law required the PUC to conduct a competitive process to solicit proposals for long-term contracts for offshore wind and tidal projects. The PUC received multiple submissions in response. Commission staff have been negotiating with some of the bidders, and yesterday approved a proposal by Ocean Renewable Power Co. to sell the output of a small tidal project in Cobscook Bay to Maine's three largest utilities.
Under the terms approved the Commission, ORPC will receive a 20-year contract with utilities Central Maine Power Co., Bangor Hydro-Electric Co., and Maine Public Service Co. to sell the output of its underwater tidal power generation units. ORPC plans to install the first of these units in Cobscook Bay this summer, and plans to expand its pilot project to include sites off Lubec and Eastport in the next 4 years.
While many of the terms of the resulting contract remain to be worked out, one piece appears firm: the price. Utilities will pay 21.5 cents per kilowatt-hour for the tide-generated electricity in the first year; this base price of 21.5 cents will escalate at 2% per year, reaching a price of about 39 cents per kWh in the final contract year. (By way of comparison, the Cape Wind offshore wind PPA approved in Massachusetts starts at 18.7 cents per kWh, with a 3.5% annual escalator over its 15 year term. The ORPC initial rate is over twice the average rate currently paid by Maine utility customers on "standard offer" default service, or about 5 times higher than the current wholesale price in the New England market.)
For ORPC, the contract is a significant boon. Securing a 20-year power purchase agreement should greatly assist the developer in securing financing for the project. This project is designed as a demonstration or pilot project, but may be able to serve as a proof that ORPC's technology and installation systems will work on a larger scale.
For ratepayers, the volume of the contract is relatively low - as licensed by FERC, the Cobscook Project has a maximum capacity of 300 kW - meaning that its above-market costs will be diluted in the much larger pool of power consumed in Maine. Nevertheless, if the contract volume grows as ORPC builds more of its scalable tidal generation units, those costs will become less and less dilute. On the other hand, the contract itself - which still needs approval by the PUC once it is finally negotiated - may include other products or commodities such as capacity or renewable energy credits (RECs). Developers typically prefer securing long-term contracts for as many commodities as possible, which helps solidify their future revenues, but it can make it harder to compare two contracts.
Many tidal projects today face high capital costs, let alone research and development expenses, but many believe that their fuel-free nature will ultimately enable tidal power to have a low fundamental cost of production of electricity in the future. ORPC's project may shed some light on how that belief fares in the Gulf of Maine.
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| Low tide at Preble Cove, Great Cranberry Island, Maine. |
Under the terms approved the Commission, ORPC will receive a 20-year contract with utilities Central Maine Power Co., Bangor Hydro-Electric Co., and Maine Public Service Co. to sell the output of its underwater tidal power generation units. ORPC plans to install the first of these units in Cobscook Bay this summer, and plans to expand its pilot project to include sites off Lubec and Eastport in the next 4 years.
While many of the terms of the resulting contract remain to be worked out, one piece appears firm: the price. Utilities will pay 21.5 cents per kilowatt-hour for the tide-generated electricity in the first year; this base price of 21.5 cents will escalate at 2% per year, reaching a price of about 39 cents per kWh in the final contract year. (By way of comparison, the Cape Wind offshore wind PPA approved in Massachusetts starts at 18.7 cents per kWh, with a 3.5% annual escalator over its 15 year term. The ORPC initial rate is over twice the average rate currently paid by Maine utility customers on "standard offer" default service, or about 5 times higher than the current wholesale price in the New England market.)
For ORPC, the contract is a significant boon. Securing a 20-year power purchase agreement should greatly assist the developer in securing financing for the project. This project is designed as a demonstration or pilot project, but may be able to serve as a proof that ORPC's technology and installation systems will work on a larger scale.
For ratepayers, the volume of the contract is relatively low - as licensed by FERC, the Cobscook Project has a maximum capacity of 300 kW - meaning that its above-market costs will be diluted in the much larger pool of power consumed in Maine. Nevertheless, if the contract volume grows as ORPC builds more of its scalable tidal generation units, those costs will become less and less dilute. On the other hand, the contract itself - which still needs approval by the PUC once it is finally negotiated - may include other products or commodities such as capacity or renewable energy credits (RECs). Developers typically prefer securing long-term contracts for as many commodities as possible, which helps solidify their future revenues, but it can make it harder to compare two contracts.
Many tidal projects today face high capital costs, let alone research and development expenses, but many believe that their fuel-free nature will ultimately enable tidal power to have a low fundamental cost of production of electricity in the future. ORPC's project may shed some light on how that belief fares in the Gulf of Maine.
Community-based renewable energy in Maine
Friday, December 30, 2011
An innovative program in Maine seeks to facilitate the development of community-based renewable energy projects. The program offers significant incentives for the development of qualified electric generation projects of up to 10 MW in size.
In 2009, the Maine legislature enacted a law establishing the Community-Based Renewable Energy Pilot Program to encourage the sustainable development of community-based renewable energy. By community-based, Maine's program targets locally-owned community-scale projects (as opposed to large-scale renewable projects owned primarily by out-of-state entities).
Under the program, qualified renewable energy projects can receive significant incentives including a long-term contract to sell the facility’s output to a Maine transmission and distribution utility for up to 20 years at average prices up to $100 per MWh (equivalent to 10¢ per kWh). This incentive is attractive because not only can the contract prices be above average market prices, but also the long-term power purchase agreement makes projects easier to finance by enhancing revenue certainty.
Eligible projects can apply to the Maine Public Utilities Commission for certification as community-based renewable energy projects. This process involves making public filings, negotiating with Commission staff, and demonstrating that the project meets the program’s qualification requirements. These include restrictions on resource type, nameplate capacity, and ownership.
Under the pilot program, eligible resources include:
Once certified, a qualified project can choose either of two incentives: a long-term contract for the output of the facility with a transmission and distribution utility, or a renewable energy credit (REC) multiplier giving a 50% bonus in the amount of RECs produced.
To date, most have viewed the long-term contract as the more attractive option. Under this incentive, projects meeting the program’s requirements can obtain a contract at a fixed or variable price, provided that two criteria are met. First, the average price per kilowatt-hour must not exceed 10 cents. Second, the cost of the contract must not exceed the cost of the project plus a reasonable rate of return on investment as determined by the Commission. These contracts may be approved for up to 20 year terms. Projects smaller than 1 MW can contract directly with the utility, while larger projects go through a competitive process held periodically by the Commission.
What will 2012 bring for Maine's community-based renewable energy pilot program?
In 2009, the Maine legislature enacted a law establishing the Community-Based Renewable Energy Pilot Program to encourage the sustainable development of community-based renewable energy. By community-based, Maine's program targets locally-owned community-scale projects (as opposed to large-scale renewable projects owned primarily by out-of-state entities).
Under the program, qualified renewable energy projects can receive significant incentives including a long-term contract to sell the facility’s output to a Maine transmission and distribution utility for up to 20 years at average prices up to $100 per MWh (equivalent to 10¢ per kWh). This incentive is attractive because not only can the contract prices be above average market prices, but also the long-term power purchase agreement makes projects easier to finance by enhancing revenue certainty.
Eligible projects can apply to the Maine Public Utilities Commission for certification as community-based renewable energy projects. This process involves making public filings, negotiating with Commission staff, and demonstrating that the project meets the program’s qualification requirements. These include restrictions on resource type, nameplate capacity, and ownership.
Under the pilot program, eligible resources include:
- fuel cells
- tidal power
- solar energy
- wind systems
- geothermal systems
- hydroelectric generators
- generators fueled by landfill gas
- biomass generators whose fuel includes anaerobic digestion of agricultural products, byproducts or wastes.
Once certified, a qualified project can choose either of two incentives: a long-term contract for the output of the facility with a transmission and distribution utility, or a renewable energy credit (REC) multiplier giving a 50% bonus in the amount of RECs produced.
To date, most have viewed the long-term contract as the more attractive option. Under this incentive, projects meeting the program’s requirements can obtain a contract at a fixed or variable price, provided that two criteria are met. First, the average price per kilowatt-hour must not exceed 10 cents. Second, the cost of the contract must not exceed the cost of the project plus a reasonable rate of return on investment as determined by the Commission. These contracts may be approved for up to 20 year terms. Projects smaller than 1 MW can contract directly with the utility, while larger projects go through a competitive process held periodically by the Commission.
What will 2012 bring for Maine's community-based renewable energy pilot program?
August 8, 2011 - what's in your electricity supply mix?
Monday, August 8, 2011
What kinds of generation resources make up your electricity supply mix? While the answers differ across suppliers and over time, the question of what's in your generation basket can affect not only the price you pay for power but also the environmental attributes of the power used to satisfy your demand.
Customers have an interest in understanding which generation resources are in their energy mix. In states like Maine, electricity suppliers and utilities have been required to provide customers mailings containing information on the resource mix. By looking at this data over time (like this August 2010 mailing, this November 2010 mailing, and this July 2011 mailing), customers can understand not only what they've been buying but how it is changing over time.
Now, in a notice of proposed rulemaking (26 page PDF), the Maine Public Utilities Commission proposes to repeal its rule requiring competitive electricity providers and transmission and distribution utilities to provide quarterly mailings with supply mix information. This follows on the heels of a 2011 law change by the Maine State Legislature which opened up more flexibility in how these suppliers must make supply mix information available.
The Maine PUC is entertaining comments on its proposal until September 9, 2011. Will the new rule require (or allow) suppliers to make supply mix information available in electronic or online formats in lieu of paper mailings?
Customers have an interest in understanding which generation resources are in their energy mix. In states like Maine, electricity suppliers and utilities have been required to provide customers mailings containing information on the resource mix. By looking at this data over time (like this August 2010 mailing, this November 2010 mailing, and this July 2011 mailing), customers can understand not only what they've been buying but how it is changing over time.
Now, in a notice of proposed rulemaking (26 page PDF), the Maine Public Utilities Commission proposes to repeal its rule requiring competitive electricity providers and transmission and distribution utilities to provide quarterly mailings with supply mix information. This follows on the heels of a 2011 law change by the Maine State Legislature which opened up more flexibility in how these suppliers must make supply mix information available.
The Maine PUC is entertaining comments on its proposal until September 9, 2011. Will the new rule require (or allow) suppliers to make supply mix information available in electronic or online formats in lieu of paper mailings?
February 1, 2011 - smart meters questioned by some
Tuesday, February 1, 2011
Smart meters are being rolled out by utilities across the country. Regulators including FERC and state PUCs have approved their installation based on perceived benefits such as improved customer service, enhanced storm restoration efforts, and reduced costs for both ratepayers and utilities. Yet a number of challenges have been lodged against smart meter programs. For example, after ratepayer complaints and requests for investigation, the Maine PUC has opened an investigation into one utility's implementation of smart metering. Concerns include privacy, alleged harmful effects of electromagnetic radiation, and the loss of meter-reading jobs.
The New York Times recently ran an interesting look at some of the opposition in California and Maine, noting that some Tea Party activists are joining the fray, as well as others concerned about health effects despite several studies concluding that smart meters pose no threat to human health.
What will end up happening with smart meter programs? Will proponents' arguments outweigh the opposition's concerns?
The New York Times recently ran an interesting look at some of the opposition in California and Maine, noting that some Tea Party activists are joining the fray, as well as others concerned about health effects despite several studies concluding that smart meters pose no threat to human health.
What will end up happening with smart meter programs? Will proponents' arguments outweigh the opposition's concerns?
January 5, 2011 - Maine PUC opens smart meter investigation
Wednesday, January 5, 2011
Smart grid infrastructure has the potential to not only reduce the cost of electricity to consumers, but also to enable society to use energy more wisely. Smart meter installation programs have been approved by FERC, and are moving forward in a number of utilities' service territories. In Maine, Central Maine Power's $192 million Automated Metering Infrastructure (AMI) program was originally approved by the Maine Public Utilities Commission in February 2010 (Docket Number 2007-215). The PUC approved the AMI program based on its benefits, including improving customer service, enhancing storm restoration efforts, and reducing both ratepayer and utility costs. CMP secured a federal Department of Energy (DOE) grant to fund about half the cost of the AMI program. Smart meters are now being installed in homes and businesses in CMP's territory, with over 50,000 already deployed in the field out of about 620,000 total meters to be installed.
Yet when it comes to the details of the rollout, concerns have been raised including the alleged lack of an opt-out for ratepayers who do not wish to be metered through smart meters. Two separate ten-person complaints were filed to the PUC requesting an investigation of the AMI program (Docket Numbers 2010-345, and 2010-389). This week, the Maine PUC voted unanimously to open an investigation of the issues raised, including both whether there truly is no opt-out, as well as whether such a lack of an opt-out would be “unreasonable, insufficient or unjustly discriminatory”. The investigation may also include an evaluation of the availability and technical feasibility of alternative metering technologies that don't rely on wireless communications, as well as the cost implications of any such alternatives.
The formal order opening investigation should be issued shortly, with opportunities for public comment and participation. Will the PUC find that the smart metering program is being implemented properly? If smart metering brings public benefits to ratepayers, what should utilities do to educate the public about these benefits?
Yet when it comes to the details of the rollout, concerns have been raised including the alleged lack of an opt-out for ratepayers who do not wish to be metered through smart meters. Two separate ten-person complaints were filed to the PUC requesting an investigation of the AMI program (Docket Numbers 2010-345, and 2010-389). This week, the Maine PUC voted unanimously to open an investigation of the issues raised, including both whether there truly is no opt-out, as well as whether such a lack of an opt-out would be “unreasonable, insufficient or unjustly discriminatory”. The investigation may also include an evaluation of the availability and technical feasibility of alternative metering technologies that don't rely on wireless communications, as well as the cost implications of any such alternatives.
The formal order opening investigation should be issued shortly, with opportunities for public comment and participation. Will the PUC find that the smart metering program is being implemented properly? If smart metering brings public benefits to ratepayers, what should utilities do to educate the public about these benefits?
September 13, 2010 - Ram Island Ledge; Vinalhaven wind noise?
Monday, September 13, 2010
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| Ram Island Ledge Lighthouse - currently for sale. |
- Want to buy a lighthouse? Ram Island Ledge Light is for sale.
- In August, the Maine PUC responded to a Freedom of Access Act request with a $36,000 charge -- which was stated to be required to cover the cost of production of emails from former PUC Chairman Kurt Adams. leaving his state job to take a top position with the private wind energy firm First Wind. Now, the PUC takes it back: the actual costs should have been only $160, and the Commission will waive those fees.
- An article in today's Bangor Daily News states that a Maine Department of Environmental Protection consultant has concluded that the Fox Islands Wind project on the island of Vinalhaven may have noise levels in excess of the regulatory standards. On the other hand, the project's own consultant analyzed the same data and reached the opposite conclusion. One of the issues may be how to account for ambient noise, like the wind in the trees.
September 8, 2010 - Maine ocean energy RFP
Wednesday, September 8, 2010
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| Backup diesel generators on Mount Desert Island, Maine. "Keeping the lights on" on island communities poses special challenges; diesel generators like these can be used to cover peak loads, or even provide backup power in the event of an outage. Photo courtesy of Drew Landry. |
Of all the feedback I hear from developers of renewable energy projects, one of the most consistent observations is that it is difficult to finance and build a project without a long-term contract for the project's output. Because energy prices are so volatile, and because projects are typically capital-intensive and can have relatively long payback periods, a long-term contract is often viewed as necessary to attract the financing required to build a project. However, many buyers observe that they aren't interested in long-term contracts at the required prices for similar reasons of uncertainty.
To remedy this problem, in its most recent session the Maine Legislature enacted "An Act To Implement the Recommendations of the Governor’s Ocean Energy Task Force", P.L. 2009, ch. 615. The Act directs the Maine PUC to issued an RFP for long-term contracts for deep-water offshore wind energy pilot projects and tidal energy demonstration projects. The RFP was published on September 1, 2010.
Here's a link to the MPUC's website for the RFP.
Here's the RFP itself (Word).
What is the Commission looking for? Up to 30 megawatts of installed capacity (and associated renewable energy and RECs) from deep-water offshore wind energy pilot projects or tidal energy demonstration projects; up to 5 of the megawatts can come from tidal energy demonstration projects.
Initial Proposals for deep-water offshore wind energy pilot projects and tidal energy demonstration projects will be due on or before May 1, 2011.
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