New Hampshire Shines In Solar Compromise
The grid is changing. It is decentralizing, becoming two-way, and is increasingly a platform for consumer empowerment and innovation, yielding efficiencies for all grid participants. Rooftop solar is the engine driving this future. The New Hampshire Public Utilities Commission (PUC) recognized this in its newly issued net energy metering (NEM) order.
For context, over one year ago, then-Gov. Maggie Hassan signed H.B.1116, which doubled the NEM cap and directed the PUC to determine next steps for rate design in the state. That triggered a robust and collaborative PUC process, resulting in the new order.
Issued in late June, the order is a win for everyone. It ensures market stability by removing all NEM caps, offering grandfathering until 2040, and creating an implementation date of Sept. 1, 2017. There were also incremental changes introduced by the PUC as the commission begins the process of gathering data to consider a future rate design. The commission recognized that monthly netting should be maintained – and that the utilities’ push for “instantaneous netting” (i.e., no netting) would cause rate shock and present “inefficient customer price signals.”
The order also maintains full retail credit for monthly net excess generation for supply and transmission while no longer giving credit for policy-based, non-bypassable charges like the system benefits charge.
Perhaps the biggest change is that monthly net excess will only receive 25% of the distribution component. While we at The Alliance for Solar Choice do not believe this is justified by the existing data – and thus is arbitrary – the commission made the right decision in rejecting the utilities’ position that the distribution component should be zeroed out. Further, this new rate is temporary until the state can implement a rate based on real data and real value.
“We have our long-awaited net metering order – and it is a qualified victory for consumers,” wrote the New Hampshire Office of the Consumer Advocate in a statement, later adding, “We’ve charted a path forward for the further implementation of new technologies and new rate designs that will make consumers more powerful and autonomous users of the grid.”
We agree with the consumer advocate that this is a qualified victory. While we do not agree with everything in the order, the PUC conducted a robust docket and closely reviewed all of the evidence. This process should serve as a national model.
And we certainly agree with the PUC’s ultimate conclusion that more data must be gathered before the state can set a long-term, granular tariff structure. New Hampshire has a fast-growing solar industry but extremely low solar penetration. And now, it will be a leading state to watch for distributed energy policy as New Hampshire embarks on the second phase laid out in the order.
During the second phase, a time-of-use (TOU) pilot will be conducted to “inform future net metering and general rate designs, including a potential transition to TOU rate alternatives for all customer rate classes.” Time varying rates have been part of the path forward in many states, including California, Colorado and New York.
In addition, a non-wires alternative (NWA) pilot will begin with the utilities identifying “all distribution circuits or substations that are planned for upgrades within the next five years, the reason for the planned upgrades, the reliability criteria and benefits of the planned upgrades, and the estimated costs of the planned upgrades.” NWAs have been successfully implemented throughout the Northeast, including Maine, Rhode Island, New York and more, and have been shown to be more flexible and efficient than traditional utility infrastructure spending. This pilot will solidify New Hampshire as a national leader in grid modernization.
Additionally, the order triggers a real-time pricing pilot, which will test out innovative ideas for rate design in the state. There will also be a low-income pilot, which, in our opinion, could have been broader to expand access to solar savings to more New Hampshire residents.
Finally, and most importantly, phase two also mandates a value of distributed energy resources (DERs) study. Although we believe the time horizon should have been longer, the 10- to 15-year framework will provide a reasonable lens through which to view the benefits that DERs provide to the grid. This collaborative study and the data from the pilots will then feed into a future, more granular rate structure in New Hampshire.
The ruling is a big win for the state of New Hampshire. It’s the latest example of states taking action to support solar energy and provide consumers with more clean energy choices. While there are some obvious states moving to expand access to renewables (California, Hawaii, etc.), there are some surprising moves that deserve notice, too.
The New Hampshire order came on the heels of Republican governors in two states embracing solar energy. In Nevada, Gov. Brian Sandoval recently signed legislation that re-opened the doors to rooftop solar after a very public force-out over one year ago. Public demand and outcry forced the hands of policymakers to bring back clean energy choices and jobs to the state.
In Florida, Gov. Rick Scott recently signed legislation that will open the door for much more solar in the Sunshine State. Again, these are states with Republican governors, proving once again that solar energy is about more than partisan politics.
Recent polling shows that 85% of the public, including 84% of Republican voters, supports rooftop solar. The solar movement is about the freedom to make your own decisions with energy and making folks less dependent on the expensive, dirty energy they are often forced to purchase from utilities.
It’s hard not to be encouraged by the outcome in New Hampshire. Utilities, businesses, and consumer groups worked for months to produce this measured step forward that will enable lower energy costs for homeowners, continued economic growth, and local job creation for the state. This is the future. It will drive New Hampshire and our country to a more sophisticated and efficient grid – and that benefits everyone. – Chris Rauscher
Chris Rauscher is a director of public policy at Sunrun and spokesperson for The Alliance for Solar Choice.
Massachusetts Sets Energy Storage Target
In accordance with bipartisan energy diversification legislation signed by Gov. Charlie Baker, R-Mass., in August 2016, the Baker-Polito administration has announced a 200 MWh energy storage target for Massachusetts to be achieved by Jan. 1, 2020. The target, set by the state’s Department of Energy Resources (DOER), builds upon Baker’s Energy Storage Initiative (ESI), a $10 million commitment to analyze opportunities to support local storage companies and develop policy options to encourage energy storage deployment.
In order to continue supporting the development of energy storage in Massachusetts, the administration has also announced up to $10 million in additional funding for energy storage demonstration projects that are consistent with the findings of the ESI’s “State of Charge” study. According to a press release, the administration has also committed DOER to examine the benefits of amending the Alternative Portfolio Standard to expand the eligibility of energy storage technologies able to participate.
“As the commonwealth continues to make unparalleled investments in renewable energy, energy storage technologies have the potential to play an integral role in effectively deploying these new resources,” says Baker in the release. “This target, paired with our Energy Storage Initiative, will cause the state and industry to lead the way on exploring the most cost-effective deployment of energy storage for Massachusetts’ ratepayers.”
The State of Charge report, released by DOER in September 2016, identified hundreds of millions of dollars of potential ratepayer benefits from the deployment of energy storage in Massachusetts. Since issuing the report, DOER has already implemented a number of the study’s recommendations to promote energy storage in Massachusetts, according to the press release.
“State of Charge showed that energy storage has the potential to be a game-changer for Massachusetts,” says Massachusetts Secretary of Energy and Environmental Affairs Matthew Beaton. “The 200 MWh target, developed with the feedback of a wide range of stakeholders, will build upon the Baker-Polito administration’s commitment to growing the deployment of energy storage throughout the commonwealth.”
“The commonwealth is leading the nation in opportunities to pair energy storage with renewable energy, from our new solar incentive program, SMART, to the newly authorized clean energy procurements,” adds DOER Commissioner Judith Judson. “This target is an important next step in developing the energy storage market in Massachusetts and better informing the state and industry on best deployment practices.”
Under the 2016 energy diversity legislation, DOER was directed to determine “whether to set appropriate targets for electric companies to procure viable and cost-effective energy storage systems,” and the agency has been working on setting such a storage target ever since the agency later found it “prudent.”
According to the press release, the new 200 MWh storage target is meant to fulfill the intention of the legislation in a way that complements the planned course of the ESI so that the state can learn about the most cost-effective and viable deployment of energy storage and inform future policies. Additionally, the target sets a flexible goal for the electric distribution companies to identify the most cost-effective applications and the best locations for energy storage deployment, including in both front-of-the-meter and behind-the-meter applications.
“Massachusetts should be congratulated for their holistic efforts to incorporate energy storage into multiple state programs focused on clean energy and grid reliability,” says Matt Roberts, executive director of the Energy Storage Association. “We look forward to working with the Baker-Polito administration and leaders in the legislature to build upon this initial target so that Massachusetts residents can reap the benefits of a more reliable, flexible and affordable electric grid.”
Based on lessons learned from this initial target, DOER will determine whether to set additional procurement targets beyond Jan. 1, 2020, according to the press release.
Connecticut Selects Community Solar Projects For Pilot Program
After denying previous proposals, the Connecticut Department of Energy and Environmental Protection (DEEP) has selected three projects to participate in a shared clean energy facilities pilot program, which was designed to make access to renewable power available to more state residents.
In response to a recent request for proposals (RFP), DEEP selected two projects in utility company Eversource Energy territory totaling 3.6 MW and one project in The United Illuminating Company (UI) territory that is 1.6 MW.
According to DEEP, the three selected proposals are for solar facilities that met program requirements to offer power at a price under a cap of 17 cents/kWh and to subscribe low- to moderate-income customers to at least 20% of the output of the generation facility. One project is located on a landfill, another project is located on a vacant industrial site, and the final project is on another vacant parcel that requires no tree clearing.
“These projects will help increase access to clean energy resources for those customers that cannot participate in rooftop solar programs and focuses on outreach to low- to moderate-income customers,” says DEEP Commissioner Robert Klee. “The proposal prices for power from these facilities came in under the price cap we established as part of this initiative – and they will be sited on land with limited development opportunities, such as a landfill.”
A 2015 law requires DEEP to establish a two-year shared clean energy facilities pilot program and authorized the agency to run a competitive solicitation for projects totaling no more than 6 MW, with 4 MW in Eversource territory and 2 MW in UI territory. After public meetings and accepting public comment, DEEP released its first solicitation in July 2016 and received 19 proposals. This past February, though, DEEP notified bidders that it declined to accept any of these proposals because the prices were markedly higher than the average accepted bid price in a recent Small Scale RFP, subscribers under the proposals did not have significant participation in the shared clean energy facility, several sites had negative environmental impacts, and several proposals would result in a higher proportion of commercial and industrial subscribers over residential subscribers, according to the agency.
After further public meetings and comments, DEEP released a second solicitation in March and received nine proposals in April. The three community solar projects selected include a 2.0 MW project in Thompson, 1.62 MW project in Bloomfield, and 1.6 MW project in Shelton, Conn. The selected projects will now go to the Public Utilities Regulatory Authority for regulatory approval.
Although it appears Connecticut’s pilot program may finally lead to the installation of community solar projects in the state, nonprofit and some state legislators recently called for a 200 MW, statewide community solar program. According to a Vote Solar report, such a program could spur thousands of jobs and millions of dollars in local economic benefits.