You would have thought the Maine Public Utilities Commission could have waited until 2021 to tell Maine’s ratepayers about what was in its newly released study examining the effect and rate impact of the state’s newly reinstituted net metering policies. Why? Because what ratepayer could enjoy the yuletide cheer knowing that these policies would result in a cumulative $160 million annual rate increase for most Mainers, specifically a 21% and 23% rate increase for consumers of Central Maine and Versant Power?
Humbug, indeed. Leave it to the PUC to be Scrooge in the midst of the Holiday Season.
Over the past year, we’ve written extensively about how many states are reexamining the compensation electric utilities pay for the excess power produced by their ratepayers with rooftop solar systems – otherwise known as net metering.
We recently highlighted the findings of a net metering study commissioned by the Sacramento Municipal Utilities District (SMUD). What did they conclude? The report, commissioned by the electric utility providing power to the capital of arguably the “greenest” state, found that 1) its rooftop solar customers aren’t required to pay the full costs for keeping the lights on. 2) If left unchanged, the total system subsidy provided to rooftop solar systems by 2025 could increase by $51/year, and in 2030 it could be $90/year.
The SMUD study reinforced what Harvard’s Ashley Brown articulated in an op-ed for Energy Fairness in 2019: the continued use of retail net metering policies is ultimately “a socially regressive regime in which lower-income customers pay more for the benefit of more affluent customers. It is a ‘Robin Hood’ in reverse.”
Ironically, Maine’s policymakers recognized the unfair subsidy provided to rooftop solar customers by regular ratepayers and instituted a “gross metering” policy. Under gross metering, rooftop solar customers paid for the grid’s benefits based on the actual amount of electricity they consumed – not what they consumed minus what they produced. That’s net metering, and it’s inherently unfair to the majority of ratepayers. Yet, in 2019, Maine’s legislators and governor reversed course and reinstituted net metering, ignoring the danger to the vast majority of customers.
At the end of the day, policies that compensate rooftop solar producers for electricity sold into the grid must 1) Treat all customers fairly by avoiding cost-shifting, 2) Accurately reflect the benefits and costs to the grid of rooftop solar, and 3) Avoid distorting the energy marketplace with inequitable rates for excess rooftop generation. If policymakers fall short of those principles, they risk saddling many customers with higher costs. Humbug, indeed.