The majority of the participants in the docket that will determine the future of the local renewable energy industry agree to leave net metering in place unchanged.
Nearly all of the parties in the latest net metering docket have come to agreement as to what the future of the policy that supports local distributed energy generation will be. For those interested in reading the complete settlement agreement, you can find it linked here, but here is the abbreviated version of what the settling parties are asking the Commission to do:
The current net metering structure, which was established in 2017, shall remain in place for a period of at least two years.
Two years after the release of the Commission’s order in this docket, the utilities shall propose new Net Metering Time of Use Rates.
New projects that take part in the net metering program shall be allowed to do so for a period of 20 years, after which point they will transition onto whatever new tariffs are available at that time.
The utilities shall create a new system of application fees for net metered projects to reduce the administrative costs borne by non-net-metering customers. These fees range from $200 to $1,000 per project.
The utilities shall commence an 18-month period of data collection, which will gather more information regarding net metering generation profiles, customer consumption trends, and other necessary information to make wise decisions about the future of net metering in the next docket.
Why did the settling parties decide on these terms?
It’s valuable to consider the context.
As a result of cuts to the net metering program in 2017, New Hampshire already has the lowest net metering reimbursement rate in New England. Local solar in NH is credited at around 10 cents per kWh for large projects, and 14.7 cents per kWh for excess generation smaller ones. In Maine projects are paid between 13 and 25 cents per kWh, and in Vermont the rate is 16 cents per kWh. In Southern New England the reimbursement rates are even higher. Unlike the surrounding states, New Hampshire has a very “thrifty and frugal” net metering program.
The settlement comes following the release of the Value of Distributed Energy Resources report in 2022, which found that there is no “unreasonable” cost-shifting occurring as a result of net metering. CENH’s testimony suggests that the reverse may actually be true, and local generation may be decreasing electricity rates for all consumers. The utilities themselves agree that net metering should be allowed to remain in place, a position that surprised industry watchers across the country, and local renewable projects are helping to reinvest in the grid by paying for needed upgrades to distribution system as they interconnect.
The settling parties include almost all of the participants in the docket. The only participating parties that have remained outside of the settlement are doing so for slightly diverging points of view. The Community Power Coalition would like to see a system that creates a time-varying net metering price signal put into place sooner rather than later, and the Department of Energy simply wants status quo. No party has argued for cuts to net metering.
But perhaps most importantly, for the first time in decades, energy growth is forecast to grow rapidly in New England. We are going to need all of the electrons we can get our hands on, and for better or worse, smaller-scale distributed generation is much easier to get built than large centralized power plants, which have a tendency to attract local pushback and litigation.
The settlement agreement represents a common-sense approach to net metering policy that fits with New Hampshire’s history and context. This is not a state with large amounts of solar power already deployed, so there is no imminent need to move away from net metering towards a more administratively complicated tariff as of this time. However, in recognition of the fact that as variable renewable energy deployment increases, it will be increasingly important to move towards more flexible rate designs that differentiate the value of an electron based on when it is delivered, the settlement provides a date certain by which the utilities will submit a proposal to do just that.
If adopted, this settlement would proactively move us towards that future, while at the same time not snuffing out the market for distributed generation. The settlement will only take effect if the PUC issues an order adopting the proposed recommendations. The PUC hearing in August regarding the docket is cruical in determining whether these recommendations are implemented.
For a deeper dive into how NEM impacts you and your community, and how you can lend your voice to the effort to preserve and strengthen NEM in NH, explore our NEM webpage and factsheet.
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