Senator Mark Lawrence, Chair
Representative Seth Berry, Chair
Joint Standing Committee on Energy, Utilities & Technology
My name is Dylan Voorhees and I am the Clean Energy Director for the Natural Resources Council of Maine (NRCM). Thank you for allowing us to present this testimony. NRCM supports the repeal of gross metering, which is punitive, unfair, costly to ratepayers, and undermines Maine’s efforts to become more energy independent through investment in local clean energy.
Background
As a very brief refresher, Maine and most other states have used “net metering” (sometimes called “net energy billing”) for decades as a simple, effective way to account for customers who produce power behind the meter. It is the epitome of simplicity: net the flow of power in and out of the customer’s meter, and provide them a 1-for-1 credit on their bill for each kilowatt-hour of power flowing out. What it may lack in sophistication it makes up in effectiveness and ease of use for both customers and utility administration. In recent years, deeper analysis about the total benefits and costs of behind-the-meter solar suggests net metering is also a pretty fair deal for all ratepayers.
That all changed when the Public Utilities Commission (“Commission”) decided to implement “gross metering” in late 2016, without any prompting from the Legislature. Their new approach was so unheard of that when it was first proposed, many experts, such as the Office of the Public Advocate, openly commented that perhaps the Commission had made a drafting error. Alas no. Gross metering requires the installation of a second meter, at expense to all ratepayers, to measure the full output of behind the meter generation, apart from the net flow of electricity to and from the grid. Customers’ bills are then netted against total generation, regardless of whether that power is consumed behind the meter or exported. Gross metering essentially requires customers to pay a delivery charge on power consumed behind the meter.
Gross metering is an unprecedented intrusion. For decades it has been Maine policy that customers should be able to make changes behind the meter that reduce their demand from the grid—including with energy efficiency—without penalty. There is no basis for discriminating against self-generation of power which is also self-consumed behind the meter.
This patently unfair approach has been, frankly, a nightmare for Maine—a regulatory boondoggle with no obvious benefit. It is the epitome of unfriendly business regulation for an industry that holds enormous progress. Indeed Maine remains in last place regionally for the amount of solar installed and the number of solar jobs per capita, at a time when other places have experienced explosive growth in low-cost solar generation.
Finally, gross metering is extremely costly for ratepayers. Based on expectations of the cost of extra metering and billing systems, we and consumer advocates predicted that gross metering would be a bad deal for ratepayers for many years to come. However, in reality it has proven even more costly than was predicted by utilities and the Commission in the 128th Legislature.
With passage of this bill, you can accomplish three significant things:
- Rebalance a Regulatory Environment that Now Slants Dangerously Toward Utilities and Against Consumers
Directing utilities to charge a transmission and distribution rate on power that is used on-site and never touches the grid is a huge, unprecedented infringement on consumer rights. To our observation, gross metering itself has never been justified to this committee or anyone else. The Commission and Central Maine Power have made claims about how providing bill credits for excess generation causes a cost shift. If those claims were true, it would still not justify penalizing power used behind the meter. We strongly disagree with those claims (so does a major report on solar by the Commission’s own consultants); however the Commission simply accepted CMP filings about “lost revenue” without question or investigation when it unraveled net metering. Astonishingly the Commission failed to calculate fully whether weakening net metering in the way they have chosen would actually save or cost ratepayers money over the short- or long-term.
The adoption of “gross metering” is a dangerous, but unfortunately not unique, example of how our regulatory environment has shifted to favoring utility revenues over the interests of consumers. In 2017, the Commission initiated a rulemaking to update changes to small generation interconnection standards and processes. The Commission ignored virtually all comments by non-utility parties and adopted virtually all recommendations by CMP. Last winter, the Commission overturned its own staff and ruled against almost every party, who all supported an independent coordinator for non-transmission alternatives (like energy efficiency and distributed generation). Ignoring obvious conflicts, they voted to follow CMP’s recommendation to put utilities in charge of these alternatives. And, for nearly two years the Commission remained almost completely ambivalent to the fact that the gross metering will encumber all ratepayers with millions of dollars in unnecessary costs. After nine months of implementation, it is now impossible to ignore those costs.
It is time to re-assert the rights and interests of consumers ahead of revenues for utilities and blind faith in their claims.
- Move Maine Toward Clean Energy Technologies that Create New Jobs and Economic Opportunities
Maine needs new strategies to stay economically relevant in the 21st century. Many legacy industries and types of jobs have declined. Renewables and other clean energy technologies offer a substantial opportunity for new economic development and job creation. Our state is wealthy in renewable energy resources, but too many times in recent years, Maine agencies have taken actions that discourage investment in these industries in our state.[1] Maine’s policy for solar power has gone from almost nothing to even worse, sewing market instability and sending the message that Maine is not remotely as open for solar business as our neighboring states.
Twenty-first century energy systems have the potential to be tremendously good for consumers. Distributed generation, storage, more control over usage, electrification to replace oil—these are all very good news for our grid and for consumers. And they tap into a huge new source of capital: ordinary homeowners and businesses who are ready to invest in clean energy.
- Set the Stage for a Renewed Bipartisan Effort to Create New Policy
This bill does not create any new policy. It repeals a failed experiment that has put a black mark on our state and is unfairly burdening ratepayers. Taking action now on this simple bill sets the stage for important policymaking that lies ahead this session (and, honestly, for years to come.) It clears the air, and allows for a conversation about where we want to go, as opposed to where we don’t want to go.
A version of this bill has been before the legislature two times previously. Each time the bill to repeal gross metering won substantial bipartisan support, and there is no reason to believe that has changed. Like most matters of importance, there was never unanimity. However the debates and arguments have played out in full, and there is unlikely any benefit from belaboring them further on this narrow issue. We encourage you to vote promptly on this emergency legislation and let the votes be taken on this foundational matter so this committee can move on to larger issues.
Thank you.
[1] As you a know, last year the Commission again put the brakes on offshore wind, the third time Maine has sought to renege on renewable energy contract terms agreed to previously.
