Clarifying the Maine PUC's delay of new solar rules
Today the Maine Public Utilities Commission (PUC) considered two items related to the implementation of revised rules related to the state’s net energy billing. The rules were revised in early 2017 and will change the compensation received by new solar installations. When released, these changes were slated to go into effect on January 1, 2018.
The implementation of these rules was deliberated in front of the Maine Legislature, and a lawsuit claiming that the new rules violate existing statute will begin next week. The issues discussed in these various arenas are complex, and the dissemination of this information for the public can be confusing or even inaccurate. Given the complexity, we will attempt to explain succinctly what was considered by the PUC today and what the outcome of today’s decision means in the marketplace.
The context of today’s decision
There were efforts in the most recent legislative session to revise the PUC’s new net energy billing (sometimes referred to as net metering) provisions. Much of the discussion has centered around metering, as the new rule requires the installation of a meter that is dedicated to measuring the total output of a new grid-tied solar photovoltaic (PV) system. To date, the utilities have only needed to measure the amount of the electricity that is exported from the property (electricity is first consumed at the house and excess is exported to the grid). Emera Maine takes the simplest approach to this by using a bidirectional meter that measures electricity in two directions. This allows the utility to measure electricity delivered from the grid to a house or business as well as electricity that is delivered back to the grid. CMP has taken a different approach (more later).
For those unfamiliar with the hierarchy of utility regulation, the PUC is the regulatory body assigned with overseeing our monopoly utilities. These utilities are tasked with developing procedures that comply with Commission rules, and the Commission is tasked with developing rules that comply with state laws. If the utilities act in a manner that is not consistent with the PUC rules, affected parties can file complaints with the PUC to determine whether the utilities are acting appropriately.
As January 1, 2018 nears, both utilities (CMP and Emera Maine) have been working to determine how to properly implement the new changes. The utilities have requested guidance formally and informally of the Commission and its staff. Some of these informal discussions led to formal requests to the PUC by the utilities for advice on how to implement specific provisions of the rule.
Maine’s solar industry and prospective solar customers have been waiting for direction from the utilities regarding how the new provisions will be handled in practice. Common questions have included:
- Will the utility billing systems be ready to handle the new compensation formula starting on 1/1/18?
- Where will these new meters be installed?
- Who pays for the new meters?
- What happens if there are delays due to the utilities?
- What needs to be completed before 1/1/18 to qualify for the current net energy billing arrangement?
As we began to schedule system installations in 2018 and with a number of projects slated for completion in late 2017 that were dependent upon the timeliness of the utilities, the importance of getting solid and consistent information from the utilities grew. It was clear from discussions with the technical staff at both CMP and Emera Maine that the utilities were struggling with how to implement the rule and could only provide limited guidance.
In September, we began to reach out to the utilities and PUC staff to see whether opportunities existed to resolve some of these issues through more formal conversation. We were able to secure a meeting with Emera Maine’s technical staff to learn more about what they were considering and to present questions about how certain aspects might be handled. It was clear during that conversation that we shared a lot of similar concerns about implementation and would need to resolve these issues before rollout of the revised rules.
We also were able to meet with PUC staff to share our concerns about certain details related to implementation (What will happen if the billing systems weren’t ready in time? How do we deal with metering on specific systems? How do we deal with utility procedures that can’t guarantee when a system is considered to be in operation?). PUC staff recommended convening a sit-down meeting with industry and the utilities to discuss these matters.
In early November, representatives from four Maine companies, PUC staff, and representatives of CMP and Emera Maine gathered to discuss these questions. The meeting was productive, and it was clear that many of the parties were grappling with similar questions. Following the meeting, we filed a petition requesting a waiver related to the effective date for system installations (more on that later). Through the standard PUC processes, a docket was opened and comments were solicited.
What was being considered
Today the PUC weighed in on two issues – a response to our petition and an advisory ruling related to a question posed by CMP related to who will pay for the new metering equipment.
CMP’s Request for Advisory
In CMP’s docket, the utility made a request that the cost of additional equipment required to meet the revised net energy billing rules be charged to solar customers. The PUC requested that affected parties also address questions related to how and where the meters should be installed. These comments can be seen here.
In our comments regarding who should pay for the second meters, we noted the following:
Although the Commission’s NEB policy going back to the early 1980’s was based on the cost efficiency (for both the NEB customer and the utility) of the installation of a single netting meter, Commission orders confirm that at some point prior to 1997 CMP voluntarily adopted the practice of installing two meters to perform the NEB function… Based on Insource’s recent experience with NEB customers in CMP’s service territory, CMP’s practice of installing a second meter appears to remain in effect. Thus, CMP’s voluntary practice has been to install a second meter on NEB generators, and that practice has been in place long before the recent amendments to Chapter 313 were adopted.
CMP has set a precedent for who pays for extra equipment, as they have been installing additional hardware for 20 years and passing the costs on to ratepayers. The PUC had been quite clear in their rules that additional metering costs should not be the responsibility of the net energy billing customer (this provision has been in place since net energy billing was created in Maine), and this additional cost to other ratepayers had been central to the discussion in the legislature regarding whether these meters should even be installed.
We also contended that meters should be installed in the simplest and least costly manner possible. We expressed concerns with the approach proposed by CMP that would significantly increase metering costs:
Although the metering details required by the utilities to comply with the amended Chapter 313 rules have yet to be publicly disclosed, the utilities have estimated the metering costs in several venues. During work sessions before the Energy, Utilities, and Technology Committee last summer, representatives of CMP and Emera Maine estimated that the metering costs for implementing the gross metering provision of Chapter 313 would be on the scale of $500 per NEB facility. In its most recent biannual net energy billing report to the Commission on September 1, 2017, CMP estimated that the gross metering costs for residential systems to be $660 per installation and $410 per installation for commercial systems. CMP’s pending Request for Advisory Ruling estimates the cost to be “thousands of dollars per meter.”
Although CMP has not provided the assumptions that underlie its various cost estimates discussed above, Insource assumes that the recent significant increase in CMP’s estimate (from hundreds of dollars to “thousands of dollars”) is attributable to the additional equipment necessary to install the gross meter in parallel. Assuming “thousands of dollars” is at least $2,000, and subtracting Emera Maine’s estimated cost for a series installation ($500) leaves a difference of $1,500. In its most recent NEB report to the Commission, CMP estimates that 550 new NEB facilities will be installed each year between 2018 and 2022, resulting is a total of 2,750 new NEB facilities in the next 5 years. Based on CMP’s NEB growth estimate, the additional cost to install the gross meters in parallel would be on the magnitude of $4.1 million over the next five years.
Commission’s Response to CMP’s Advisory Request
The Commission clarified that CMP should install the meters in a manner that minimizes costs. Today’s ruling appears to indicate that (a) CMP will need to install their gross meters in series (which is consistent with Emera Maine’s approach), and (b) solar customers are not responsible for this additional metering costs.
The Commission’s order is available here.
Insource’s request for a waiver; PUC ruling
Due to continued questions on how to actually comply with the new rules, we requested that any interconnection agreement submitted prior to 12/31/17 be eligible for grandfathering until the utilities develop written procedures addressing the outstanding implementation questions. Without written procedures and provisions in place to guide the utility, we have several customers who could be adversely affected by delays from CMP even though already have solar installed at their homes. They are awaiting work by CMP in order for the approval needed to flip the switch. Delays resulting from November’s fierce wind storms and widespread power outages have been contributing to these delays.
Today, the PUC denied our request for a waiver.
Instead, the Commission recognized the need to resolve the outstanding questions and were optimistic that these items could be resolved in a timely manner. They decided the best course forward would be to continue the discussions between PUC staff, the utilities, and industry to iron out these details.
To provide the time to continue these discussions, the Commission delayed implementation of the new rule until 4/30/18. The Commission’s ruling can be accessed here.
We are pleased that the Commission recognized the merit of our request and the challenges of implementing the new rule beginning on January 1st amidst the current uncertainty. We have a number of customers that will be relieved that their system will receive full retail net metering even if CMP experiences delays that push this work into early 2018. We are also very willing to continue productive conversations that ensure that the roll-out of this rule goes as smoothly as possible.