We are members of the Maine Legislature’s Energy, Utilities and Technology Committee, from both sides of the aisle – Republican and Democratic – and we urge our fellow legislators to protect Maine ratepayers by supporting the bipartisan amendment on L.D. 1347, An Act to Reduce the Cost of Net Energy Billing for Ratepayers.
We want community and residential solar development by and for Maine residents. L.D. 1347 is a bipartisan compromise that ensures stable, fixed rates for the small-scale and residential projects net energy billing was originally designed to support. We ask our fellow legislators to join us – along with Maine’s Public Advocate, AARP Maine and energy consumer groups – in the bipartisan effort to allow further solar growth in Maine while reducing the harm to Maine ratepayers.
L.D. 1347 as amended will save money for Maine ratepayers. No other choice does. This bill will not end net energy billing. It will not destroy solar expansion in Maine. Those supporting this bill are not against solar energy or a clean energy transition. It is a bipartisan view that solar energy can be a just and reasonable choice for Maine people. The promise of solar is as a low-cost renewable energy resource, but the unintended consequences of 2019 legislation expanding net energy billing subsidies reverse that promise and place a very high energy cost burden on Maine ratepayers. This bill is a fair solution to net energy billing developers and ratepayers. Maine has the most expensive solar program in the nation, and without the compromise offered by L.D. 1347, Maine ratepayers will continue to pay windfall profits to developers – profits the Legislature never intended.
The proposal changes the existing price setting mechanism, which is flawed. Currently, net energy billing costs follow the same price increases as the cost of natural gas and other fossil fuels. That’s how the Public Utilities Commission formula is designed. It’s complex, but the bottom line is that the price of net energy billing is based on the cost in electric rates of fossil fuels, which doesn’t make any sense. Renewable energy is supposed to be a solution to the price spikes of fossil fuels, not a means for solar developers to profit off the price differential. If L.D. 1347 passes, gas will no longer determine most of the price of net energy billing. Instead, the price will be set based on what a net energy billing developer actually invests. Developers are ensured to recover their costs and receive a fair profit on their investment.
For four years, consumer groups have predicted that net energy billing would impose unnecessary costs on Maine ratepayers – unnecessary because we can have unlimited competitively priced solar at far lower cost. For four years, net energy billing supporters have universally denied this, arguing that not many projects would be built, and the costs wouldn’t get out of hand. However, data collected by neutral parties and confirmed by the PUC show that a gold rush of net energy billing projects came to Maine. When the PUC projected the annual cost of even a fraction of net energy billing projects coming online, the probable cost soared to more than $200 million a year. The Office of the Public Advocate tested those estimates and agreed.
An annual rate increase of $135 million, mostly because of the cost of Maine’s net energy billing program, was approved last month by the PUC. This increase is just the first wave of anticipated price hikes. As more net energy billing projects come online, the higher this energy cost burden will be on Maine ratepayers, which will hit low-income, fixed-income and hardworking Mainers supporting families the hardest. Those rates become effective for all of us and our constituents July 1 – as you’re reading this.
Commercial rate increases are enormous. Many of these ratepayers are shocked and frightened. These increases are mostly because of net energy billing, and would be unnecessary if we had procured competitively priced solar. We’ve had calls and emails from our constituents. The rubber is hitting the road.
The bipartisan compromise that is L.D. 1347 will save ratepayers at least 20%, likely more. The OPA analysis says up to 50%. That’s between 20% and 50% of the $220 million cost to Maine ratepayers of net energy billing – money that stays in the pockets of hardworking Mainers. We cannot have a clean energy transition at the expense of Maine people and our most vulnerable populations, which is exactly what the current net energy billing program is asking us to do.
Correction (July 1, 2023): A previous version of this op-ed misstated the Public Utilities Commission’s position on the Office of Public Advocate’s analysis of ratepayer savings of L.D. 1347 .
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