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Massachusetts Makes Progress on Climate Change

Posted by Robert Rio on Dec 12, 2019 9:14:21 AM

The climate protesters who took to the streets of Boston last week targeted the wrong people.

bostonatnightIf these people really want to impact the climate debate, they should turn their attention outside of a state that is already well on its way to achieving the goals outlined during demonstrations at the State House.

Massachusetts has had a law on the books for more than a decade that mandates an 80 percent reduction in carbon emissions from all sectors (electric generation, transportation and buildings) by 2050. Admittedly that isn’t 100 percent but worrying about whether Massachusetts meets 80 percent or 100 percent misses the larger picture.

There are separate regulations aimed at carbon reduction as well. State policy requires that 80 percent of electricity be generated using carbon free sources by 2050. And new proposed regulations by the Massachusetts Department of Environmental Protection will move that requirement to nearly 100 percent during the same time frame. AIM supports the proposed regulations.

The Baker administration has already finalized contracts for one offshore wind farm and other one is going through the approval process. These developments will leave the region humming with new turbines.

Additionally, a large hydro power project is being routed through Maine to supply about 18 percent of the Massachusetts’ total power. Without hydro power, our transition to carbon-free energy will be delayed for decades because it would take an enormous amount of additional solar or offshore wind to make up for the loss of carbon-free hydro power.

That leaves transportation – which accounts for the largest portion of greenhouse gas emissions - 45 percent and growing.

Governor Baker has been a leader in addressing transportation-based greenhouse gasses and is a visible backer a 12-state (plus the District of Columbia) regional effort to reduce greenhouse gases in the transportation sector known as the Transportation and Climate Initiative (TCI). AIM has joined with the administration and several environmental groups to support this effort and the governor is always looking for more support.

TCI will establish a regional cap on carbon emissions while auctioning emissions allowances. Proceeds from the TCI fee will be sent back to each participating state improve statewide public transportation and to encourage fuel users to purchase alternative vehicles.

A MassINC poll published yesterday found that a majority of registered voters in Massachusetts, Connecticut, Maryland, New York, New Jersey, Pennsylvania and Virginia strongly or somewhat support their home state's participation in TCI.

Some states are balking at joining TCI. Perhaps the Boston climate activists could take their message to other state capitals to ensure that this critical multi-state effort gets off the ground.

Declaring victory and moving on is tough, but it is necessary to move on from Massachusetts and concentrate efforts in those areas where the greatest changes should be made. There is lots of commonality. The 3,500 member employers of AIM support national efforts to mitigate climate change.

The best thing for all of us to do is acknowledge our work favorably and let the rest of the nation know it can be done with the right leadership.

Topics: Environment, Energy, Transportation

House Makes Wise Choice to Postpone Transportation Debate

Posted by Robert Rio on Nov 18, 2019 8:00:00 AM

The Massachusetts House of Representatives has postponed until January its debate on how to overhaul the commonwealth’s transportation system.

trafficsmallHouse Speaker Robert DeLeo said Thursday that lawmakers initially planned to take up the transportation debate next week, but wanted more time to digest an enormously complex and contentious issue.

"…We decided that it's better that we try to get this right than to try to comply with, I guess you could say, a somewhat arbitrary deadline," DeLeo told State House News Service.

The Legislature is set to recess on Nov. 20 and resume formal sessions in January. While the House and Senate will continue to meet in informal sessions through December, anything that requires a roll call vote must wait.

Associated Industries of Massachusetts, which supports a reasoned, long-term approach built around Governor Charlie Baker’s $18 billion transportation bond bill, commended the House for its decision to push back the debate.

“We appreciate that the Speaker and his members are being thoughtful about this complex issue of transportation reform. Taking additional time to weigh all options is the best path forward for the Commonwealth,” said Brooke M. Thomson, Executive Vice President of Government Affairs at AIM.

“AIM will be working with House members as they continue to look at this issue.”

AIM and ist 3,500 member employers believe the first step to transportation reform must be to remove the structural impediments that prevent the Department of Transportation and the MBTA from spending the money that the taxpayers have already given them. Analysis of MBTA spending patterns reveals that budgeted capital expenditures have risen from less than $500 million in 2013 to $851 million in 2018, but the T still fell short of the $1.6 billion that was available in 2019.

AIM respectfully disagrees with those who support raising new revenue immediately through a gasoline or other tax for the transportation system. Raining money on a transportation system without updating outmoded procurement regulations and rules governing public-private partnerships is like putting brand-new rail cars on corroded 19th century tracks.

AIM is open to reducing transportation emissions by supporting the Transportation Climate Initiative (TCI), a regional collaboration of 12 Northeast and Mid-Atlantic states and the District of Columbia that seeks to improve transportation, develop the clean-energy economy and reduce carbon emissions from the transportation sector.

Topics: Massachusetts House of Representatives, Taxes, Transportation

Slow and Steady Approach to Clean Energy Protects Ratepayers

Posted by Robert Rio on Aug 27, 2018 8:30:00 AM

The energy bill passed in July by the Massachusetts Legislature, signed by Governor Charlie Baker and supported by AIM has been criticized by environmental advocates for not being “aggressive” enough in promoting the use of renewable energy.

WindTurbinesOceanSmallThe new law doubled the requirement for purchasing new renewable power over the next ten years and allowed the procurement of an additional 1600 MW of offshore wind, in addition to the 1600 MW of offshore wind and 1200 MW of hydro power already on tap.

It’s true that AIM urged lawmakers to take a cautious approach on the measure, especially since a sweeping 2016 energy bill that created a host of new initiatives is still being phased in.

But AIM has learned over the years that moving slowly and deliberately often leads to a better environmental and economic outcome than reacting quickly to the latest fad.   

Remember Cape wind? 

Back in 2010 the same environmental advocates and the administration of then-Governor Deval Patrick fell all over themselves supporting the Cape Wind project, even when it became obvious the development was in trouble. AIM recognized Cape Wind for what it was – a no-bid project with sky high prices that would have added hundreds of millions of dollars to 
the electric bills of Massachusetts ratepayers.

The 30 cents-per-kilowatt hour average price of Cape Wind would have become even worse than it seemed at the time because the wholesale cost of electricity has plummeted over the last eight years due to low natural-gas prices. 

Abandoning Cape Wind allowed offshore wind technology (and the law) to catch up to a place where we now have zero carbon-energy at reasonable costs. New offshore wind turbines are expected to produce electricity at less than a third of the cost of Cape Wind.   

AIM and its 4,000 member employers deserve a share of the credit for that cost shift.

It was AIM, not the environmental advocates, that ensured that the 2016 energy bill required all future offshore wind contracts to be transparent and competitively bid, because we knew competition would drive down prices. The bidding process also attracted world-renowned companies because they knew the process would be fair and open.

The 2016 law included two other important provision pushed by AIM. First, any future offshore wind contracts would have to be cheaper than any existing contract, guaranteeing lower prices in the future as technologies and experience levels become better. Second, these contracts would have to be cost-effective to the ratepayers of Massachusetts.

When Thomas Jefferson wrote the first draft of the Declaration of Independence it was widely criticized. Eighty-six changes were eventually made to that first draft, and the final document was shortened by one-fourth.   

 Our country’s founders weren’t against independence – they just wanted to make sure they got it right.

It worked backed then and we think it’s the best approach now.    

Topics: Massachusetts Legislature, Massachusetts economy, Energy

New Solar Subsidy Program Gets It Right

Posted by Robert Rio on Feb 2, 2017 2:00:00 PM

The Massachusetts Department of Energy Resources (DOER), after months of public comment, released on Tuesday its proposal for a new solar-energy incentive program to replace the complex and overly expensive program now in place.

solarpanels.small.jpgWe think the state got it right. And employers and other electric customers will be the better for it.

The proposal adopts suggestions made by AIM to rely on market competition to establish the amount of incentives that developers will receive to install solar energy. The result will be a program that costs half as much as the current one and still encourages the development of solar installations throughout the commonwealth.

Total savings to employer and other electric ratepayers: $250 million per year.

The new program will eliminate Solar Renewable Energy Credits (SREC), one of two methods through which solar developers currently collect subsidies. The other, net metering credits, will remain unchanged.

While some of the details are still being worked out, the new program, called the Solar Massachusetts Renewable Target program or SMART program, will establish a solar tariff rate only after bidding is complete for an initial 200 megawatt block of solar projects. Developers will receive that bid price for 20 years.

That incentive rate will remain the same for all solar projects and will automatically decline 4 percent for every 200 MW block in the future. There will be some “adders” to the base price - for building-mounted systems, solar canopies, and cases in which solar is combined with storage technologies - that would add small amounts to the baseline price.

Projects may still receive net metering credits, but those will offset the tariff to determine the final subsidy. So if the base rate is established at 15 cents and the developer receives net metering credits of 10 cents, the utility will make up the 5-cent subsidy through the tariff.

AIM opposed the scope of the current solar program and was concerned that early proposals for the new program relied on government officials to set tariff levels for solar incentives without using the competitive market to drive down costs to the ratepayer. Such a system would fail to pass along to the ratepayer the 50 percent reduction in solar installation costs that have occurred over the last few years. 

Driving down costs is important for the future of the Massachusetts economy. Massachusetts not only has one of the highest electricity costs in the country, but one of the most generous solar and renewable incentive programs, adding up to nearly $1 billion in 2016 and $2 billion by 2020. Those subsidies add up to nearly 4 cents per kilowatt hour for individual customers even before the new solar incentive program kicks in.

AIM, in a series of comments, urged DOER to adopt a model based on competition. Other states where solar installations cost half as much as Massachusetts already use the competitive model.

Read First Set of AIM Comments

Read Second Set of AIM Comments

Competition reduces prices. Competition is also the hallmark of the recently passed Massachusetts energy bill, which requires utilities to solicit market proposals for hydropower and offshore wind, a notion AIM supports.

The solar proposal still needs to go through public comment and any tariff needs to be approved by the Massachusetts Department of Public Utilities. During the transition period between now and the point at which the new program is approved by the Department of Public Utilities (DPU) – expected January 2018 - the existing solar incentive program will remain in place at a lower incentive rate.  

DOER has developed a program that is well thought-out and enjoys wide support. AIM commends DOER for this step in the right direction and we look forward to working with the Baker Administration and others to get this program approved and implemented as soon as possible. 

If you are interested in following this issue and engaging with AIM on Massachusetts electricity prices, contact me at rrio@aimnet.org or 617-262-1180

Review the DOER Proposal

Topics: Energy, Solar Subsidies

Electricity Ruling Produces $115 Million Refund

Posted by Robert Rio on Mar 31, 2016 7:30:00 AM

Massachusetts electric ratepayers will receive a $115 million refund as the result of a ruling last week in an administrative court case brought by the attorney general and supported by AIM.

Electriclinessmall.jpgA federal administrative law judge, ruling in a case first brought in 2011, reduced to 9.59 percent the guaranteed return granted to the companies that develop and operate transmission lines that bring electricity long distances. It marked the second time that regulators have lessened the rate of return, bringing New England ratepayers total refunds of $310 million.

“Massachusetts employers and homeowners pay some of the highest electricity rates in the country, and that’s why AIM participates in actions like this one that put money back into the hands of growing companies,” said John Regan, Executive Vice President of Government Affairs at AIM.

AIM supported the attorney general in litigation filed in 2011 at the Federal Energy Regulatory Commission (FERC) to challenge the return on equity that New England transmission companies (utilities) are guaranteed on transmission-related projects.

Unlike local distribution rates, which are regulated by the state Department of Public Utilities (DPU), the profits on large transmission projects, which form the backbone of the electric grid, are regulated at the federal level by FERC.

The return on equity for electric transmission companies was set in 2006 at 11.14 percent. AIM was the only general trade association in Massachusetts to sign on to the complaint arguing that the costs were too high in light of economic conditions.

In October 2014, based on the attorney general’s complaint, FERC lowered the transmission owners’ allowed profits to 10.57 for rates in effect in 2011 and 2012 - not as low as the attorney general and AIM wanted, but still enough to generate $78 million in refunds. Those refunds were given back to ratepayers in the form of credits throughout 2015.

The administrative law judge on March 22 further reduced the guaranteed return to 9.59 percent for rates in effect from January 2013 to April 2014. If FERC approves the decision, New England ratepayers will receive another $234 million refund, about half of which will be distributed in Massachusetts. A decision is expected by the end of the year.

And the attorney general isn’t done. She is now arguing that the rates after April 2014 should also be lower than the transmission companies are currently receiving.

“AIM thanks attorney General Maura Healey and her Office of Ratepayer Advocacy for allowing us to be part of this ongoing litigation to bring electric costs down,” Regan said.

Topics: Electricity, Energy

Solar-Energy Subsidies: A Primer

Posted by Robert Rio on Dec 7, 2015 7:30:00 AM

The debate over solar-energy subsidies in Massachusetts has enormous cost implications for employers. But the debate is arcane, complex and littered with head-scratching jargon such as SRECs, net-metering and behind-the-meter installations.

It is also littered with misinformation intended to distort the financial facts of the issue.

Solar.PrimerAssociated Industries of Massachusetts has compiled a plain-English series of questions and answers to help employers understand the issue. The document is excerpted below. The full white paper is available here.

What incentives are available in Massachusetts to defray solar installation costs?

There are three types of incentives:

  • the federal investment tax credit (ITC), which is 30 percent of the cost of solar installation;
  • state solar renewable energy certificates (SRECs); and
  • state net metering credits.

The incentives do not include savings from lowering your electric bill through the use of on-site solar, or any tax savings, such as depreciation, that may be applicable to your business. The ITC is scheduled to be reduced to 10 percent for commercial installations on December 31, 2016 although there are efforts to extend it. Net-metering credits are tax free in Massachusetts.

What’s the difference between a net-metering credit and an SREC? Which types of facilities are eligible to receive them?

Net metering describes the process by which an electric customer uses the solar power produced at its facility to lower the use of electricity. If you produce more than you use, the surplus may be sold back to the utility for net-metering credit. Otherwise, your electric bill is just lowered by the amount you generate.

SRECs are different.

Massachusetts law requires that a certain portion of all power consumed within the commonwealth be generated by renewable resources. The amount is currently 10 percent and it increases 1 percentage point per year. The generating resources may be solar, wind, small hydro and few other generation methods classified as renewable under state law (the definition can vary from state to state).  A certain portion of the 10 percent renewable obligation must be met with solar energy.

Each renewable source essentially generates two components – the actual energy, which in the case of solar is typically used on-site (though it could be sent to the electric grid), and environmental attributes associated with the clean-energy production.

The state determines whether or not utilities or others are in compliance with the renewable obligation through the trading of the clean-energy attributes, known as Renewable Energy Certificates (RECs) or Solar Renewable Energy Certificates (SRECs) if they are generated by solar energy. One REC or SREC is generated every time a megawatt-hour (1,000 kilowatt hours) of energy is generated by the applicable renewable source. Utilities and others buy these RECs or SRECs to meet their obligation set by the state.

The power does not have to be sold with the RECs or SRECs. As long as it is consumed somewhere in the electric grid for New England, an REC or SREC is generated and may be sold.

Here’s an example: A business customer generates one megawatt hour of solar electricity and thus one SREC. The company uses the power on site, but has no need for the SREC since the renewable compliance obligation is on the utility and suppliers of electricity. The company may then sell the SREC to someone who needs it to meet their renewable obligation, generating revenue for the company that produces the SREC in addition to lowering the cost of power.

How much do these incentives cost consumers?

The federal Investment Tax Credit is paid from general tax revenues. The Massachusetts SREC and net metering credit programs are paid by a surcharge on non-solar energy used by ratepayers.

The total tab to Massachusetts electric ratepayers for SREC and net metering will be about $600 million in 2015. That cost is expected to nearly triple by 2025 as solar becomes more ubiquitous. Solar subsidies will thus become the largest single component of distribution charges faced by ratepayers, even more than the cost to maintain the electric grid itself.

According to studies done by the state Department of Energy Resources (DOER), generating renewable energy through solar currently costs about 39 cents per kilowatt hour (kWh). Non-solar renewables can be produced for an average of 4.5 cents per kWh. Almost half of every dollar spent for renewable power goes to subsidize solar, yet it only generates 7 percent of the clean energy. 

What do those costs mean for employers?

Massachusetts already has one of the highest prices for electricity in the continental United States (typically among the top three for residential, commercial and industrial ratepayers). Our rates are double those of North Carolina.

Companies that use large amounts of electricity to manufacture products or to provide 24/7 medical care end up paying hundreds of thousands of dollars each year to fund solar developments for someone else. These artificially inflated electricity costs have forced scores of manufacturers to leave Massachusetts – or to close – during the past two decades.

Solar subsidies also increase the cost of electricity to cities and towns, translating into higher taxes, higher education costs and higher medical costs.

My solar-energy vendor told me there is a “cap” on the amount of solar allowed in Massachusetts and that I should support an increase in that cap. Does that mean I can’t install solar panels on my property once the “cap” is reached?  

Not at all. The “cap” does not limit solar installations in any way. It does change the way some facilities (depending on size and geographic location) are reimbursed by the utility for net metering credits.

Could you explain?

There are two general types of solar installations.

Some businesses add solar generation to reduce their electricity use. All output from the solar panels is used on site. These are called “behind the meter” installations. Most companies that add solar have an electric load much higher than the solar panels can provide. They therefore do not generate surplus net metering credits.

The second type, known as “solar farms” or “virtual net-meter” installations, are primarily built by developers to send power back to the utility, essentially acting as a power plant.  

When the Massachusetts lawmakers enacted the solar legislation, they allowed facilities that generate surplus net-metering credits to be compensated for those credits at the full retail rate of electricity. So these facilities are producing electricity like a power plant while receiving reimbursements as if they were selling electricity like a utility.

The generous reimbursement prompted the Legislature to “cap” the program. Once the cap is reached, additional solar facilities that come on line would not receive the full retail rate of power, but rather a lower rate. They would, essentially, be treated like any other power generator, including wind energy producers.  

Is my business affected by the cap?

There is a good chance that it is not.

Homeowners and most small businesses are exempt from the cap and therefore continue to receive the higher retail rate for net metering.  And the cap is utility specific. While National Grid territory has reached its cap, Eversource territory has not.

Most AIM member employers who move to solar do so with so-called “behind the meter” installations, which are not typically impacted by the cap because the facility is generally not selling electricity back to the grid. If the company occasionally sends power back to the grid during periods of low onsite energy usage, it may be impacted by the cap if it applies. Generally, however, this revenue impact is minimal.  

Even after the cap has been reached, a company can still receive benefits under the Federal ITC and SREC program. In fact, in most cases, the ITC and SRECs are far more lucrative than net-metering revenues. And remember, net-metering benefits are tax free so you can still save, even if revenue is lowered.   

So if I am a business and just want to put solar on my roof to lower my bills, can I still do it?

Even though your installation is credited against the cap for accounting reasons, the presence or absence of a cap has no financial effect on your ability to lower electricity costs through the use of solar. You will continue to receive retail credit for the power you do not use as well as SRECs and the ITC as applicable. 

Read AIM's Position Paper on Solar Subsidies

Topics: Massachusetts economy, Energy

Infographic | Massachusetts Solar Subsidies Out of Line

Posted by Robert Rio on Nov 2, 2015 7:30:00 AM

Massachusetts maintains some of the richest subidies in the country for developers of solar energy. These rich incentives are unnecessarily raising annual solar costs to almost $600 million per year. Left unchecked, the program will siphon $9 billion from businesses and homeowners and into the pockets of developers during the next decade. 

 

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Topics: Energy

Infographic: The Cost of Electricity in Massachusetts

Posted by Robert Rio on Sep 29, 2015 12:39:33 PM

Energy.09.29.15

"Today, Massachusetts has taken a giant step forward toward a clean energy future. This legislation will reduce electric bills, promote the development of renewable energy, and stimulate the clean energy industry that is taking root here in the Commonwealth…" , Governor Deval Patrick as he signed the Green Communities Act in 2008.

Boston Herald in 2011 reveals a staggering $4 billion dollars in extra cost to Massachusetts ratepayers by the Green Communities Act.  Boston Herald November 10, 2011, "Martha Coakley: ‘Green’ act costs $4B."

Senate Solar Subsidy Could Add $600 Million to Electric Bills

Posted by Robert Rio on Jul 27, 2015 7:35:47 AM

The state Senate last week passed on a voice vote with little debate a solar-energy subsidy that could add as much as $600 million to the electric bills of Massachusetts consumers, businesses and institutions.

solarpanels.smallApproval of an amendment doubling the scope of state subsidies for solar power will leave consumers with a total tab of $4 billion by 2020. The amendment contained none of the ratepayer protections advocated by AIM and others.

The measure now goes to the House of Representatives as part of a larger bill that would require virtually all permitting and financial decisions by the state to conform to a still-vague plan to adapt to climate change.

Associated Industries of Massachusetts opposes increasing the solar subsidy because virtually all the savings (except for wholesale fuel costs) attributable to solar installations are basically a transfer from non-participating ratepayers to those who have solar, increasing costs for those who may not be able to take advantage of solar programs.

AIM supports instead the creation of new policies that continue to promote the expansion of solar energy in Massachusetts without forcing non-solar customers to subsidize millions of dollars in profits for developers.

“It is unconscionable for lawmakers to take money from low-income homeowners and small businesses that already pay the highest electric rates in the country and put it in the pockets of solar developers,” said John Regan, Executive Vice President of Government Affairs at AIM.

The cost of solar subsidies in Massachusetts is almost twice the level in neighboring states. AIM and others, as part of a task force established by the Legislature last year, advocated reforming the current program and bringing costs into line with other states before expanding the program.

We believe:

  • Reducing the cost of solar programs and electricity should be the priority.
  • Competition in solar procurement will drive down costs.
  • Those who are still “Connected” to the grid must pay their fair share of maintaining the grid that they in fact rely upon. 
  • There should be no grandfathering of the current program when a new program is enacted.
  • The current net metering cap should not be increased until a new solar program is developed that is cost-effective and sustainable. 

All these increases have come at a time when Massachusetts pays the highest electric rates in nation because of past bad policy decisions. According to the US Energy Information Administration (EIA), an arm of the Department of Energy, residential rates in April were the second highest in the continental US, just a fraction of a cent below Connecticut and nearly double North Carolina.

Comparing the data to the same time last year, residential electric rates in Massachusetts have increased 23 percent while the national average has inched up only 2.7 percent.

In the Commercial and Industrial sector, rates increased 10 percent relative to last year, while the average national rate for these sectors declined.

Topics: Massachusetts economy, Energy

Legislature Should Rein in Solar Subsidies

Posted by Robert Rio on Jun 1, 2015 3:08:08 PM

In the not-to-distant future, up to 15 percent of your electric bill’s distribution charge could be used to pay for the solar panels on your neighbor’s house.

solarpanels.smallThat’s why a Task Force created by the Massachusetts Legislature is recommending changes to a Bay State solar program that is growing exponentially faster than similar initiatives in other states. Associated Industries of Massachusetts served on the so-called Net Metering Task Force and will today urge lawmakers at a public hearing to use the report as a roadmap for a significant overhaul. 

The outcome of the debate over solar energy subsidies has tremendous implications for the economic future of the commonwealth. The current program, left unchecked, will add an estimated $4 billion between now and 2020 to the electric bills of employers and citizens who already pay some of the highest energy costs in the nation.

While it is understandable that solar energy installers and even some participants want to keep the status quo, virtually all the savings (except for wholesale fuel costs) attributable to solar installations are basically a transfer from non-participating ratepayers to those who have solar, increasing costs for those who may not be able to take advantage of solar programs. The viability of the program depends on this inequity. If everyone took advantage of solar programs, there would be no ratepayers left to pay the cross-subsidy.

Additionally, as solar programs increase, there are fewer customers to pay the cost associated with maintaining the distribution and transmission system, which is still required to be ready willing and able to serve the customer when the sun is not shining. Solar customers also fail to pay their fair share of social costs embedded in distribution rates, causing a massive shift in who pays for programs that serve low-income customers.

Here are some important points from the Task Force report that should serve as a roadmap for any net metering legislation:

  • Reducing the cost of solar programs and electricity should be the priority: Massachusetts ratepayers are not only spending an enormous amount of money for solar power, we are spending at rates double that of any other state, including some nearby. Bring unsustainable costs in line with other state programs.
  • Competition in solar procurement will drive down costs: The current method of purchasing solar does not rely on the competitive market, which drives costs lower and allows ratepayers to take advantage of the declining costs of solar installations. For example, recent land-based wind contracts that were procured competitively under Section 83 of the Green Communities Act have lowered the cost of energy because competition reduced the cost of these projects to below wholesale electric rates. The same can be done in the solar market.
  • Those who are still “Connected” to the grid must pay their fair share of maintaining the grid that they in fact rely upon: The notion that those who use solar power are not using the electric grid is a myth. Even those who use solar for all their electricity needs rely on the electric grid to supply power when the sun isn’t shining. The cost of maintaining the grid, and backup power for the solar users, is not currently paid by the solar user and this cost is basically added to everyone else’s bill. In addition, those who net meter to zero (and those who receive rebates), are not paying any social costs embedded in rates, including low-income reimbursement, energy efficiency, and several other programs.
  • There should be no grandfathering of the current program when a new program is enacted: Any promises made about the sustainability of the current rebates and financial incentives were made by salespeople and not by the legislature or DPU.  There was never any guarantee given to solar users that the current program would continue to be as lucrative forever. Therefore, the current participants should immediately be brought under any new system.
  • The current net metering cap should not be increased until a new solar program is developed that is cost-effective and sustainable: The current cap has been hit in some utility territories. This cap was enacted by the legislature for the simple reason that is was needed to contain costs. Therefore it should not be raised until a new program is enacted. Additionally, contrary to reports of the demise of the solar industry, there is still some room in the caps in some territories and small solar systems are not under any cap. Raising the cap without reform will imbed millions of dollars into the long-term rates of ratepayers and make the situation worse. 

The Net Metering Task Force Report contains clear data that shows the current system is working best for solar developers and investors at the expense of business (and residential customers) trying to build and expand their businesses without the benefit of overly generous cross-subsidies.

 

Topics: Energy, Subsidy

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