House Bill 1218: Net-metered renewable power costs less, too
On June 11, the State House of Representatives will get back to work-at the UNH hockey rink in Durham, with masks, temperature checks, and social distancing. One bill on the agenda, HB 1218, would spur investment in low-cost renewable power by net-metering electric ratepayers.
Home-grown renewable energy is not just cleaner than power from centralized plants that burn fossil fuel imported from out of state. Over time, local renewable power will also be inexorably cheaper, for two reasons: the “fuel” is free, and “delivery” requires only local distribution wires-no costly high-voltage transmission lines.
New Hampshire lags every other New England state in renewable power. Lifting the arbitrary cap on large net-metering ratepayers-businesses, cities and towns, SAU’s-would boost renewables and create good jobs in the process.
Net Metering? It’s geeky, yes, but if you care about saving costs, it’s worth knowing about. A net metering electric customer can put generating equipment “behind the meter” to produce its own power from sun, wind, or water. A homeowner with PV solar pays Eversource the full retail rate of 19 cents/kWh for incoming utility power, but nothing for power from the roof that reduces that “load.” And if it makes more than it uses, it can sell any “net energy” back to the grid at rates set by the Public Utilities Commission. PUC net metering rates, based on “default energy service” rates, average 8¢/kWh. So ratepayers that don’t net meter are held harmless-they pay no extra cost for net-metered power from the grid.
The “Cost” Question: The Legislature has passed four bi-partisan net-metering bills in the past three years. All have been vetoed by the Governor. Like the previous ones, HB 1218 would raise the cap for large customer-generators from 1 to 5 MW. But in an effort to meet the Governor more than halfway, HB 1218 also incorporates two of the three “clean energy bills” he endorsed in January.
The Governor still contends-without any explanation-that HB 1218 would cost ratepayers “hundreds of millions of dollars.” Really?
In its 2017 order establishing net-metering rates, the PUC said: “…based on the evidence presented in this proceeding and the current, relatively low [Distributed Generation] penetration levels in the State, we find that there is little to no evidence of any significant cost-shifting” due to net-metering.
Three years later, net-metered renewables still account for only 1% of all electric power produced in the state. The PUC has begun a study to see if increased net metering levels may affect retail rates. If it finds evidence of cost-shifting, HB 1218 requires a prompt report to the Legislature and prompt steps to adjust net metering rates.
But there’s good reason to believe any rate impacts may actually save money for both ratepayers and taxpayers, rather than increasing costs. Nashua has two city-owned hydro plants that could qualify for net-metering rates, saving significant money for taxpayers. Manchester, Derry and Bedford would like to build their own 1-5 MW solar projects for the same reason.
Many other towns and SAU’s already pay less for power under contracts to buy a “mix” of conventional energy from fossil fuels and renewable energy from net-metered local hydro plants-and would save more if HB 1218 passes. According to Standard Power of America, reimbursement for the net-metered portion of the mix has allowed savings of:
• $110,000 for Derry and $56,000 for its SAU #10 since 2017;
• $63,000 for Milford and $46,000 for its SAU #40 since 2017;
• $14,000 for Peterborough and $38,000 for SAU #1 (ConVal) since 2016;
• $15,000 for Windham and $52,000 for SAU #95 since 2017; and
• $27,000 for Bedford since 2018.
Load Reduction Accounting: HB 1218 also requires uniform accounting rules, overseen by the PUC. Why are new rules necessary? Because there is no consistent accounting treatment for net-metered transactions among NH utilities. One accounts for them without additional costs, while another uses an arbitrary, “subjective” accounting approach that creates artificial “costs.”
Net metering supporters have been unable to get any explanation for the “hundreds of millions of dollars” in costs alleged by the Governor. We finally asked Eversource for a meeting with company executives who could explain how Eversource accounts for net-metered energy transactions. On January 2, Madeleine Mineau of Clean Energy NH and I sat down with three Eversource representatives at the company offices in Manchester. In response to our questions, Rick Labrecque, Manager of Distributed Energy Resource Planning, explained that Eversource simply doesn’t count energy produced and consumed behind the meter when it records the balance of an individual customer’s daily “load” provided by Eversource. When customer-generators as a group produce net energy for the grid, that reduces the “aggregate load” of all Eversource retail customers. That in turn reduces the total amount of energy Eversource buys at wholesale from its contract suppliers of “default energy service.”
But Eversource doesn’t treat all net-metered energy transactions that way. Acknowledging “sort of a subjective approach,” Labrecque said some unspecified number of Eversource’s large customer-generators-“basically those that get more than about $10,000/year” in credit for energy exports to the grid-are accounted for not as retail customers reducing retail load, but as wholesale generators, whose power Eversource sells into the wholesale market, at prices averaging 2-4¢/kwh. Eversource “buys” that net-metered energy at the PUC rate of 8¢/kwh, but instead of treating it as retail load reduction, it “sells” that energy into the wholesale market, adds two-way transmission charges despite the fact that net-metered exports to the grid use only local distribution wires, and takes a “loss” of some 5¢/kwh that it then proposes to shift to other ratepayers. If this kind of “subjective accounting” creates avoidable “costs” on that scale, it could indeed cost ratepayers hundreds of millions of dollars over a decade or more. But it’s totally unnecessary and inappropriate.
On February 5, Science, Technology & Energy Committee leaders gave Eversource a written invitation for Mr. Labrecque to explain the company’s accounting approach to our committee. Eversource has not responded to that invitation.
Rep. Howard Moffett, (D-Canterbury, is vice chair of the House Science, Technology & Energy Committee and prime sponsor of HB 1218. Co-sponsors include five Republicans – Reps. David Danielson, John O’Connor, James Allard, and Dan Wolf, and Sen. Jeb Bradley; and four Democrats – Reps. Bob Backus, Suzanne Smith, Peter Schmidt, and Rebecca McWilliams.