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DISCLAIMER: This blog is published for general information only - it is not intended to constitute legal advice and cannot be relied upon by any person as legal advice. While we welcome you to contact our authors, the submission of a comment or question does not create an attorney-client relationship between the Firm and you.

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Monday
Nov072016

Maine PUC Proposes Net Metering Rule Changes

The PUC has issued a proposed rule that would change Maine’s net metering compensation for rooftop solar (and other distributed generation). Under Maine’s current rule, customers that generate power are given a credit equal to the full retail rate of electricity.

The proposed rule would gradually reduce the portion of a generating customer’s electric bill that the customer is able to “net” against, and, over time, require the customer to pay a higher portion of their bill, regardless of how much energy the customer generates and delivers to the grid.

Supply vs. T&D Portion of Bill

The proposed rule operates by distinguishing between the supply portion of a customer’s electric bill and the transmission and distribution (“T&D”) portion of the bill. The supply portion of the bill represents the charge for the actual generation of electricity. In Maine, generation is provided by competitive suppliers or through Maine’s standard offer program, through which the PUC solicits competitive bids from energy suppliers to provide default service for customers that do not choose a competitive supplier. The T&D bill is the portion that goes to the customer’s local utility—Central Maine Power, for customers in southern Maine—to cover the cost of maintaining the grid.

Grandfathered vs. New Installations

As expected, the PUC has proposed different rules for existing solar installations (installed before January 1, 2017) and new installations. Existing installations will continue to be compensated under Maine’s current net metering rule for 15 years. The current rule allows a customer to net against the entire portion of the customer’s electric bill.

New installations will be allowed to net against 90% of the T&D portion of their bill in 2017, 80% in 2018, and so on until 2026 when the customer will no longer be able to net against any portion of the T&D bill.

Ownership Options

The proposed rule also allows for lease arrangements but limits leases to twenty years in length, after which ownership of the solar panels (or other facility) must be transferred to the lessee. The rule allows for shared ownership, with bill credits applied on the basis of ownership interest. The rule would also allow for community net metering projects, although the details of how these projects would work, or would differ from shared ownership projects, is unclear.

Buy All, Sell All vs. Net Exports

Several commenters have pointed out that the proposed rule’s explanation of “nettable energy” is ambiguous. There are two plausible interpretations. Under one interpretation, the proposed rule would establish what is known as a “buy all, sell all” regime in which all of the energy generated by a customer is subject to the modified netting scheme proposed by the new rule. A customer would therefore “sell” all of the electricity generated by the system and “buy” all of the electricity the customer consumed. Under the second interpretation, a customer would be allowed to consume their own self-generation first and only the energy exported to the grid would be subject to the netting formula in the new rule. There are important consequences for each method, and the PUC will need to clarify which path to take in the proposed rule.

Lively Public Hearing

On October 17, the PUC held a public hearing on the proposed rule. The hearing drew a large crowd, with solar-roof homeowners, solar installers, and representatives from Maine’s environmental organizations speaking against the proposed rule. Utility representatives, some business owners, and some members of the public testified in support of the proposed changes. Some commenters encouraged the PUC to defer to the Legislature which is expected to take up the issue next session after the narrow defeat of a comprehensive solar bill earlier this year. 

The PUC must now consider whether to modify the proposed rule in light of the comments it received. 

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