by Andy O’Brien
Free Press news story
A Pittsfield-based solar installer is asking the Maine Public Utilities Commission (PUC) to exempt certain solar customers from its new gross metering rules citing the high cost of installing new mandatory meters. In the PUC filing, Vaughan Woodruff, owner of Insource Renewables, argues that the PUC’s rules for medium and large commercial electricity consumers “significantly increase costs to ratepayers in the near-term” due to “excessive metering costs,” as the new meters do not recover enough revenue to pay for themselves.
“Insource believes that the significant differences between the estimated costs to implement the nettable energy provisions of [the rule] and the actual costs, as well as the overstated benefits of recovered revenue, represent a significant change in circumstances that requires further review by the Commission,” wrote Woodruff. “This data is necessary for assessing the efficacy of the nettable energy provisions of [the rules] and examining whether other more viable options could be used to recover revenue without the relatively high metering costs associated with this program.”
Earlier this year, at the urging of the LePage administration, the PUC gave final approval to first-in-the-nation regulations that gradually reduce the compensation new solar customers receive for the energy they produce, including power that is generated and consumed on-site and never makes it to the grid. But in order to charge solar customers those additional transmission and delivery fees for all of the power generated, the PUC required all ratepayers to shoulder the cost of installing a second meter in the homes with rooftop solar arrays to measure the total energy generated, not just the energy exported to the grid.
Initially, CMP estimated that the cost of the new meters would be $500 each and then, later, revised it to $660 for residential and $420 for commercial installations. Then in a January filing, CMP put the cost at $1,410 per residential meter and $3,200 per commercial meter. Woodruff says that the utility didn’t estimate the administrative costs associated with billing system upgrades for three utility districts, how the rate design reduces the recovered revenue from residential net energy billing facilities, or the difference in delivery rates for residential and commercial customers. After working under the new rules this past summer, Woodruff says that the cost of ten new metering systems averages to about $1,824.69 per meter while recovering just $56.37 in fees for the year. ReVision Energy co-founder Fortunat Mueller estimates the average cost per ratepayer for new meters is about $1,300 per residential system and about $2,750 per commercial system. He believes ratepayers are on the hook for about $1.5 million a year in additional meter costs under the new rules.
Woodruff noted that the rate design for medium and large customers is primarily based on the magnitude of their power demand rather than their volumetric energy consumption, which provides little return for the investment in the new meters because the PUC’s nettable energy provisions are designed to recover revenue based on the solar project’s volumetric energy generation. Insource is also requesting that the commission order CMP and Emera Maine to provide a detailed accounting of the costs of complying with the rules. Woodruff argues that the total cost of the meters is at least three to four times more than PUC originally projected, but the commission had fair warning that the meters would be costly.
In 2017, former Public Advocate Tim Schneider wrote in testimony to the Legislature’s Energy, Utilities and Technology Committee that his office estimated that the PUC’s new solar rules would cost ratepayers between $530,298 and $1,561,190 over a four-year period. At the time, a representative from the PUC said the OPA analysis was flawed because it assumed that all of the metering costs would be recovered in the first year the meters were installed.
“This is not how these types of utility costs are recovered from ratepayers,” wrote PUC legislative liaison Paulina Collins. “Rather, the meter costs, like the costs of all utility assets, are recovered over time based on the useful life of the asset.”
But Mueller argued that the payback for utility ratepayers will likely be 30 to 50 years and even up to 100 years for some commercial gross meters. He said the PUC’s earlier analysis makes the numbers look better, but misses the point.
“Just because I buy a new snowmobile on my credit card and plan to pay for it over time, doesn’t mean I haven’t incurred that cost,” wrote Mueller in an email. “And in fact, it just means we get to pay CMP’s cost of capital and a healthy usurous return on equity to Iberdrola shareholders in addition to the cost of the meters.”
Mueller added that neither CMP nor Emera Maine has automated their gross billing, which would cost another $1.5 million in setup costs to implement.
“In the meantime, they are just doing all the billing by hand, which of course also isn’t free (and has proven to be error prone),” Mueller wrote. “I expect they too see the writing on the wall and understand that this rule is too fundamentally flawed to last.”
In a statement, Central Maine Power said that request is a matter for the PUC to decide and the company stands “ready to comply with whatever Commission order results from the Insource request.” A PUC spokesman said that the PUC’s hearing examiner will be addressing the filing in the very near future.
The PUC’s decision to begin phasing down support for solar is based on a belief that the incentives are no longer needed because the cost of solar has dropped and that non-solar users currently subsidize solar producers for the cost of maintaining the electric grid. But solar supporters counter that by reducing the value of net-metering credits for solar-generated electricity sent back to the grid, regulators are taxing those who draw less power from the grid even as they provide power to other customers. Earlier this year, six Republican lawmakers, including Rep. Abden Simmons (R-Waldoboro), switched their prior votes in order to uphold Gov. Paul LePage’s veto of a bill that would have eliminated the rule requiring new meters. But solar installers are currently challenging those rules in court.
