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A years-long study to determine a fair rate to pay New Hampshire utility customers for their unused solar power and other generation is nearing completion, but some Republican state lawmakers don’t want to wait.
At least two bills passed by the Republican-controlled House of Representatives call for cutting net metering rates now, even as a consultants’ report on the subject is due to be released this spring. Both are now before the Senate Energy and Natural Resources Committee.
“Our concern with both of the bills is that they seek to do an end run around the study process, which was carefully designed and agreed to in the Public Utilities Commission docket,” said Heidi Kroll, a lobbyist for the Granite State Hydropower Association, which represents roughly 50 hydro facilities. “We see these bills as intended to override that process.”
Under net metering, customers who generate their own power through solar panels or other on-site resources draw on that power when they are generating enough, and draw on power from the grid when they are not. Any excess power is sent to the grid. At the end of the month, the electric distribution company charges customers for the “net” — their consumption minus the value of their generation.
Utilities and fossil-fuel industry groups around the country have fought net metering, arguing that it shifts costs onto other ratepayers. Solar customers pay lower electric transmission and distribution charges because they buy less power, and so, they argue, a higher share is unfairly borne by non-solar customers. But customer-owned solar panels can also accrue benefits to all ratepayers by reducing demand on grid infrastructure.
“In our opinion, there’s credit for avoided transmission, avoided distribution, and avoided capacity costs, not to mention environmental and health benefits,” Kroll said. Many of the association’s hydro facilities participate in group net metering, in which renewable energy facilities share the proceeds from surplus electricity with members who sign on.
One of the bills now pending, HB 1629, would slash the net metering tariff from the current default service rate to the wholesale electric rate, as much as an 80% cut. That would effectively “destroy the renewable energy industry in New Hampshire,” said Sam Evans-Brown, executive director of Clean Energy NH. “The only projects that would get built would be utility-scale projects.”
The other, HB 1599, would make a smaller cut to the tariff for projects greater than 1 megawatt serving municipalities. The measure is intended to correct what both sides agree was an earlier policy error.
“I get it, but it would also be sound to credit these projects with their benefits as well,” Evans-Brown said. Any cuts make it that much harder to get projects done, especially given that the market for solar in New Hampshire is “pretty marginal” as it is, he said.
State Rep. Michael Vose, R-Epping, who sponsored HB 1599 and spoke in favor of both bills before the Senate committee this month, disputed the notion that they are an attempt to go around the study process. Rather, he said, they are merely “giving guidance” to regulators and putting “guardrails on the growth of net metering costs.”
In an interview, Vose reiterated that HB1599 seeks to correct a mistake, and HB1629 is “designed to help provide guidance to the Public Utilities Commission as it goes forward with the net metering docket.”
Predictions of a devastating impact are “an egregious exaggeration,” he said.
Asked why the bills are necessary before the PUC-ordered study is complete, he argued that the study “is not about net metering specifically — it’s about the value of distributed resources. It will have some information in it that will be relevant to the commission, but it isn’t the end-all and be-all about a net metering tariff.”
Vose is listed on IRS filings as a director of the Ratepayers Legal Defense Fund, an affiliate of the New England Ratepayers Association, the organization that filed a highly controversial petition with the Federal Energy Regulatory Commission in 2020 to take control of net metering rates away from states. The petition drew hundreds of comments in opposition, with many saying it was intended to undermine the renewable energy industry. The commission unanimously dismissed the case.
The process of figuring out a fair value for distributed energy resources in New Hampshire began in 2016, when a law was passed asking the Public Utilities Commission to open a docket on the subject. The commission issued an order setting an alternative net metering tariff in 2017, after a host of stakeholders battled back and forth on what factors should play into that rate.
“Ultimately, everybody agreed that they really didn’t have enough information to get any more precise than the default service rate,” Kroll said, noting that several pilot programs are going on in order to produce more data. “It’s kind of rough justice until we gather more information.”
Importantly, in their order, regulators said that based on the evidence presented and the “current, relatively low distributed generation penetration levels” in the state, “we find there is little to no evidence of any significant cost-shifting.”
The commission subsequently hired a consultant to conduct a study of the value of solar and hydropower in New Hampshire. Oversight of that study has since been handed over to the newly created Department of Energy. A spokesperson for the department told the Senate committee the report is due in late spring.
Kroll said she is hopeful that the Senate will “see the wisdom of holding these bills and waiting for the study, so that everyone can work with good data.”