In Support of L.D. 91
An Act to Eliminate Gross Metering
Testimony of Steven L. Weems, Executive Director
Solar Energy Association of Maine
To the Joint Standing Committee on Energy, Utilities, and Technology
January 29, 2019
Senator Lawrence, Representative Berry, and members of the Joint Standing Committee on Energy, Utilities, and Technology: my name is Steve Weems, Executive Director of the Solar Energy Association of Maine (SEAM). We are here to corroborate the emergency nature of this bill and urge passage of LD 91, as soon as practical, as written.
SEAM is a broad coalition of solar advocates. We are a Maine nonprofit corporation that exists to work for the development of solar electricity of all project sizes and ownership models, for the benefit of all Maine people.
The Solar Energy Association of Maine concludes we have a genuine emergency, for the reasons cited in L.D. 91. We particularly emphasize the market disruption created by the current Public Utilities Commission (PUC) net metering rule, which brings in the concept of gross metering. The confusion and unfairness of gross metering, which also creates new, unnecessary costs for non‐solar ratepayers, has suppressed the market for distributed solar electricity, just when global and Maine circumstances indicate we should be encouraging it in every way we can.
The Solar Energy Association of Maine has prepared a simple diagram to explain net metering and gross metering. The diagram is attached to this testimony. We offer it and the following definitions, example, and commentary to shed light on these terms and the value of LD 91.
Definitions: Net metering, in its original form, allows small electricity customers to produce solar electricity and use the distribution grid like an interactive storage battery, by at any moment in time sending excess solar electricity being generated to other utility customers, and then getting electricity back when needed. Solar customers (and all other utility customers) pay a fixed monthly delivery fee, and are billed at the full retail rate for any “net energy” they consume over and above what they generate. This is accomplished by a kilowatt‐hour (kWh) credit on the bill for the exact amount of electricity a solar customer sends to the grid when he or she cannot use it instantaneously. A meter located at the interface between the customer and the utility measures the unused solar electricity that flows onto the grid, as well as the electricity the utility supplies to the customer later, when needed. This back and forth is reconciled monthly via the process of net energy billing (NEB). Solar customers pay for the net energy they need, if they need more than they generate. These customers do not get paid for any excess solar energy they generate, in addition to what they use.
Gross metering allows the electric utility to measure and charge for delivery of all the electricity generated by the solar customer, whether it is used instantaneously or sent out to other customers over the grid. This requires an additional utility meter to measure the total amount of solar electricity produced. The customer benefits of net metering are obliterated and solar customers have to pay a penalty for producing clean energy. This is because they have to pay for all the electricity they produce themselves, whether they use it immediately or send it out to other customers to establish their kWh credit.
Example: Solar owners usually attempt to balance their annual solar electricity production with their total annual electricity use. When solar owner/customers are generating solar electricity, some is used instantaneously on site and some flows onto the grid to other utility customers. To balance daily and seasonal generation and use variations, the portion of solar generation consumed immediately and the portion going out on the grid varies.
Imagine that annual owner solar electricity generation and electricity use is in balance, and further that over the course of a year half of the total annual generation is used instantaneously on site and half flows onto the grid to others. Under gross metering (the current PUC rule) the customer must pay the utility for delivery of all the electricity he or she produces, including the half-consumed immediately which never touches the grid. This is grossly unfair, and a justification for emergency legislation to eliminate this practice. (Reminder note: all electricity customers pay a fixed monthly delivery fee to be connected to the grid, even if they generate their own power.)
Consider a typical residential rooftop solar owner/customer, who might use 7,200 kWh of electricity per year (an average of 600 kWh per month). Let’s say that during the year this same solar owner/customer also produces 7,200 kWh of electricity. This customer would pay Central Maine Power (or Emera‐ME) about $500 per year (7,200 kWh x $0.07/kWh delivery charge) for the “privilege” of generating his or her own electricity. This is in addition to the fixed monthly delivery fee all utility customers pay. Only a large, investor‐owned utility on a crusade to stamp out distributed self‐generation could like this outcome.
Commentary: Net metering can be characterized as a “first‐generation” mechanism. Undoubtedly over time it will be replaced by something more modern that aligns benefits and costs of distributed generation more precisely. Critics of net metering (including the investor‐owned utilities and the PUC) have not offered a good second‐generation mechanism. To date, they steadfastly have refused to take into account the benefits of distributed generation to all of us. To serve the public interest, this must be done as part of the process of future rule and rate‐making proceedings.
By any objective standard, gross metering is an ill‐conceived, unfair practice. L.D. 91 would eliminate gross metering, thereby rectifying an egregious situation. It would create market confidence and stability. It would establish a period of time (a few years) during which a next‐generation successor to net energy billing could be identified and put in place. It would not enshrine net metering as the law of the land. It recognizes that restoring “original” net metering, for a while, is for the common good. It is just a baby step in the compelling need to address the urgent problem of global heating, but it is the right thing to do. At least it would get Maine back on the right path and allow us to consider more forward‐looking solar legislation without the travesty of gross metering suppressing the market for renewable energy.
For all these reasons and many more, SEAM urges you to support L.D. 91 as essential emergency legislation. Thank you for your service and attention to this issue.