The good, the bad and the strange of net metering policy changes

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One step forward, one back, and one that is both. Last week net metering policies in three states saw significant changes: a bill to restore net metering in Maine and one to strengthen distributed solar policy in Arkansas contrasting with a vote in Kentucky to gut the policy and allow utilities to set rates.

These bills show the very different fortunes of net metering across the United States, as utilities continue to push to get rid of a policy which lowers their revenues and their control over the electricity system. And each situation is different.

Maine: gross metering eliminated

If there was one change to net metering that was clearly not backed by evidence, it was one implemented by the administration of former Maine Governor Paul LePage. The “gross metering” policy deemed that all of the electricity produced by rooftop solar — whether consumed on-site or not — should be valued at rates set by state regulators.

And with the idiosyncratic former governor gone, a number of his policies are also being reversed. Only two and a half months after the first post-LePage legislative session took place, both houses have passed LD 91, whose title is “An Act to Eliminate Gross Metering.”

Even under the LePage administration, the policy had been reversed for large consumers, when it was demonstrated that the cost of installing meters to measure electricity consumed on-site increased the system costs that must be spread across all ratepayers.

LD 91 passed the House on March 14, after previously passing the Senate, and will now go to Governor Janet Mills (D) for approval. As Mills will likely sign the bill, Maine is expected to move back to the no-frills net metering policy that it had before the state elected the French-Canadian version of Donald Trump.

Kentucky

While Maine has restored net metering, Kentucky has gutted the policy. On March 14, the Kentucky House passed SB 100, which allows utilities to replace net metering with compensation set by regulators, and explicitly gives utilities the green light to impose discriminatory fixed and demand-based charges on their customers who dare to go solar.

This can be done when the cumulative capacity of net metered systems reaches 1% of a supplier’s single-hour peak load during a calendar year — one of the lowest caps for net metering that pv magazine staff have seen to date.

The policy further requires two-directional meters, and will allow those who install solar to “roll over” any credits from one month to the next.

One of the few rays of light in this bill is that it grandfathers existing systems under the current net metering arrangement for 25 years. And, as it doesn’t take effect until January 1, 2020, it is likely to result in a rush of customers installing solar until that date is passed and the 1% cap is reached, and a dead rooftop solar market after that. At the time of publication, it was unclear whether or not Kentucky Governor Matt Bevin (R) was expected to sign the bill.

Arkansas

While Maine is restoring net metering and Kentucky is dismantling it, we’re not quite sure what to make of what Arkansas has done. Last week Arkansas Governor Asa Hutchinson (R) signed SB 145, which opens the door to third-party solar in the service areas of both investor-owned and municipal utilities, but also would allow state regulators to gut net metering. The bill had earlier passed both houses of the state’s legislature.

Specifically, SB 145 states that if regulators deem that it is in the public interest, they can take a number of actions that would essentially dismantle the policy. These include reducing compensation to the utility’s avoided cost plus extra benefits, which are not to exceed 40% of avoided cost, impose a per-kilowatt-hour fee on net metering customers, meter and compensate the electricity generated separately, or “take other actions that are in the public interest of and do not result in an unreasonable allocation of costs to other utility customers.”

In other words, just about anything.