The Net Metering Debate Rolls on in Arkansas, New Hampshire, and Utah

Over the years, Energy Fairness has written extensively about the net metering debates being held by regulators and lawmakers across the U.S.  Those debates have continued in recent weeks with a veto of net metering legislation in New Hampshire and two more filings before the Utah and Arkansas public service commissions (PSCs).

In January, we released a report discussing the need to reexamine Florida’s rooftop solar compensation model developed by the state’s PSC in 2008 during the administration of former Florida Governor Charlie Crist.  Between 2008 and 2018, consumer-owned rooftop connections increased exponentially from 577 to 37,862 – an increase of more than 6,400 percent. Though Florida’s PSC hasn’t reexamined its very generous consumer-owned solar compensation model, as of the end of the third quarter of 2019, more than 42 states plus the District of Columbia have taken some kind of action on rooftop (or distributed) solar policy and its corresponding rate design.

In addition to these actions, New Hampshire, Utah, and Arkansas all saw recent legislative or regulatory actions consistent with actions in other states reflecting that rooftop solar is no longer in its developmental infancy. In other words, we no longer need to subsidize the few at the expense of the many.

In New Hampshire, Governor Chris Sununu vetoed SB 159, which sought to change New Hampshire’s current net metering policy by increasing the permitted project size from 1 MW to 5MW.  In vetoing SB 159, the Governor said the bill “…would result in hundreds of millions of dollars in higher electric rates for our citizens.  These costs would be felt most by low-income families and seniors in New Hampshire, and that is not acceptable.”  That’s because the legislature didn’t include language in SB 159 permitting utilities to institute a grid charge for projects over 1MW, nor did it include language compensating these projects for energy sold into the grid at avoided cost, or wholesale.  A competing bill, HB 1481, did includ this language.   Both provisions, in the governor’s view, would mitigate cost shifting to the majority of New Hampshire’s ratepayers.

Establishing avoided cost and instituting a grid charge for future rooftop solar generation is a consistent theme being debated not only in state legislatures, but also in PSCs across the country.  Last November we supported the continued use of a standby charge for rooftop solar consumers in Alabama.  A standby, or grid, charge is also being considered by the Arkansas PSC, along with compensating new consumer-owned solar at avoided cost.

Just over 1,500 miles to the northwest from Little Rock, in Salt Lake City, Utah’s PSC will consider a new rate structure for future owners of rooftop solar in the Beehive State.  In its filing with the PSC, Rocky Mountain Power stated that residential solar owners “should receive fair value for energy they export that is comparable to what could be procured from alternative sources of energy.”  Or, in other words, to prevent an unfair cost-shift onto the rest of Utah’s ratepayers, new consumer-owned solar generation should be compensated at avoided cost for excess energy sold into the grid.

Whether it’s compensating rooftop solar owners at avoided cost or instituting a grid or standby charge to pay for the benefits of the electric distribution system, the position of Energy Fairness has been clear and consistent: both at the regulatory and legislative levels, policymakers should develop net metering policies that accomplish three simple goals:

• Treat all customers fairly by avoiding cost-shifting
• Accurately reflect the benefits and costs to the grid of rooftop or distributed solar
• Don’t distort the marketplace by paying inequitable rates for excess rooftop generation.