Veto Override: Md. Lawmakers Enact Clean Energy Jobs
Maryland state lawmakers have proven that even a governor’s veto can’t keep them from their desire to support solar and wind power.
In late January, the Maryland House of Delegates voted 88-51 to override Gov. Larry Hogan’s veto of the Clean Energy Jobs Act, legislation to increase the state’s renewable energy goals. Just a few days later, the state Senate followed suit and voted 32-13, a decision that brought the legislation into law.
The Clean Energy Jobs Act (S.B.921/H.B.1106) boosts the state’s renewable portfolio standard from 20% by 2022 to 25% by 2020, as well as raises the solar carve-out from 2% by 2022 to 2.5% by 2020. According to the Maryland Climate Coalition, the legislation will lead to roughly 1.3 GW of new clean energy in the state, as well as reduce greenhouse-gas emissions by more than 2.7 million metric tons per year.
In his veto message in May, the governor said, “This legislation is a tax increase that will be levied upon every single electricity ratepayer in Maryland, and for that reason alone, I cannot allow it to become law.” Specifically, he argued the bill would have led to a rise in taxes of between $49 million and $196 million by 2020.
Celebrating the override, Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association, says in a statement, “We are pleased that Maryland lawmakers listened to their constituents, paving the way for increased renewable energy in communities across the state. The Clean Energy Jobs Act is named that for a reason. Today, the solar industry employs thousands of Marylanders who know firsthand that when you expand clean energy, you increase the number of well-paying local jobs.”
Separately, Tom Kiernan, CEO of the American Wind Energy Association, adds, “Making the Clean Energy Jobs Act law is the right decision for Maryland.”
“The Senate voted for the Clean Energy Jobs Act because it is sound economic and environmental policy,” comments Sen. Brian Feldman, lead sponsor of the Senate version of the bill. “Not only will this legislation create thousands of good-paying green jobs, it will put the state on the road to meeting our renewable energy goals – a vision shared by both Democrats and Republicans across Maryland.”
Delegate Bill Frick, top sponsor of the House bill, adds that the legislature is “rejecting the disingenuous and inaccurate posturing of Hogan’s politically motivated veto message.”
“With the Clean Energy Jobs Act, we will see more renewable energy on the grid, more solar installers working across the state and less pollution from dirty coal plants,” says David Smedick, the Sierra Club’s Maryland Chapter representative. “In the current face of fear, uncertainty and, at times, outright denial of environmental problems at the federal level, the Clean Energy Jobs Act proves that states like Maryland will not remain quiet on our country’s toughest challenges like climate change.”
Maine Regulators Rule To Phase Out NEM Rates
The Maine Public Utilities Commission (PUC) has made a ruling to gradually phase out retail-rate net energy metering (NEM) in the state, and although it appears the commission tried to find a balanced approach to appease NEM supporters and opponents, some stakeholders from both sides have denounced the outcome.
NEM, a policy under which utilities compensate solar customers for their excess energy, has been a contentious issue in Maine. After Gov. Paul LePage, R-Maine, vetoed a compromise bill to reform the state’s solar policy in April 2016, the fate of NEM was handed over to the PUC. In December, the commission said it was postponing its decision in order to fully weigh all of the feedback it collected.
In a press release announcing the PUC’s final rule in late January, Chairman Mark Vannoy says, “The commission received many useful comments over the last several months regarding this rule, and all the comments were reviewed and analyzed carefully.”
The PUC emphasizes the rule only applies to residential rooftop solar, not large-scale installations.
“Many projects are being built across the state today based on existing market mechanisms,” the PUC explains in the release. “The commission decided not to address larger-scaled projects and community projects as part of the [NEM] rules to ensure we stayed within our regulatory function and in light of legislative initiatives in these areas.”
Although grandfathering has been a problem in other states that tackled NEM reform, especially in Nevada, the Maine PUC rule grandfathers in all existing residential solar customers under the current retail NEM rates for 15 years. In addition, the compensation changes don’t go into effect until Jan. 1, 2018, meaning that anyone who signs up for NEM over the next year will also cash in on the full rates for a 15-year period.
Starting in 2018, the current retail NEM rate will drop 10% annually until it is phased out over the next 10 years. Notably, though, a customer’s rate will be locked in for 15 years at whichever level it is when the customer enters the NEM program.
In the PUC release, Vannoy says the rule “maintains incentive margins consistent with the declining costs of solar technology.”
The release adds, “The incentives to [NEM] customers under the new rule should not change the length of time it takes for a customer to recoup their investment. The estimated payback for new installations will be similar to what it has been historically.”
Despite the PUC’s efforts to strike a balance, some stakeholders argue the new rule goes too far, while others claim it doesn’t go far enough.
Solar advocates, such as the Natural Resources Council of Maine (NRCM), say the NEM phase-out will hurt the state’s market. In fact, Dylan Voorhees, clean energy director for the NRCM, charges that the rule will “gut the long-standing ability of Maine consumers to generate their own power.”
“That is the wrong direction for a state that is already in last place regionally on solar per capita and has so much to gain from growth of solar power,” comments Voorhees. He hopes state legislators, who worked with solar stakeholders on the compromise bill LePage ultimately vetoed last year, will again try to address the solar issue.
“The rules make it clearer than ever that it is critical for lawmakers to regain control of Maine’s solar policy and pass legislation this session,” says Voorhees. “Continued policy and regulatory uncertainty is crippling Maine’s ability to grow a large, mature solar industry.”
At least one state lawmaker, Rep. Seth Berry, D-Bowdoinham, has indicated he is ready.
In a statement, Berry, who is the House chair of the legislature’s Energy, Utilities and Technology Committee, says, “Clean renewable energy sources are the best pathway our state has to lower energy prices, more good-paying jobs and a smaller carbon footprint. The rule adopted by the PUC seems to take us in the wrong direction by making major and disruptive changes despite overwhelming public input regarding risks to our energy and jobs markets. This rulemaking only underscores the need for the legislature to move quickly to protect jobs, ensure market stability and keep Mainers in control of their energy future.”
Meanwhile, it seems LePage, a long-time critic of NEM, is also unhappy with the final rule. A Press Herald report cites a statement from the governor saying, “Net energy billing customers should be compensated for the electricity they generate at fair market rates. Other ratepayers should not be subsidizing those installations to make solar viable. If it cannot stand on its own two feet, they should not have to pay higher rates to some of the more affluent ratepayers.” – Joseph Bebon
The Top 10 Solar Battleground States Of 2016
Forty-seven states and the District of Columbia took some form of action on distributed solar policy and rate design changes during 2016, according to the N.C. Clean Energy Technology Center’s (NCCETC) latest edition of its “50 States of Solar” report.
The report says a total of 212 state- and utility-level distributed solar policy and rate changes were proposed, pending or enacted last year. NCCETC notes this represents an increase in solar policy activity over 2015, when 46 states and D.C. took approximately 175 actions.
In its report, NCCETC also ranks what it considers the top 10 most active states in 2016 for solar policy developments, as follows:
1. Arizona, where a value of distributed generation proceeding took center stage and the state’s three investor-owned utilities proposed major changes to net energy metering (NEM), residential demand charges and increased fixed charges.
2. Nevada, where a debate ensued and was eventually resolved over grandfathering in existing NEM customers.
3. Maine, where a NEM successor bill was vetoed and the work toward a new policy was undertaken at the Public Utilities Commission.
4. New York, where the state’s Reforming the Energy Vision proceeding continued and led to the noteworthy “LMP + D” valuation methodology for distributed energy resources.
5. California, where a NEM successor tariff was adopted early in the year.
6. Massachusetts, where a compromise bill increased the state’s aggregate cap on NEM and made other changes to the state’s solar policy.
7. Florida, where a contentious ballot initiative would have prohibited cross-subsidization due to NEM.
8. Hawaii, where the state’s utilities hit their caps on the new grid-supply option, leaving customer self-supply as the remaining option.
9. New Hampshire, where the Public Utilities Commission initiated the development of a NEM successor tariff following legislation enacted earlier in the year.
10. Colorado, where Xcel Energy’s proposed grid-use charge was dropped in a settlement agreement in favor of time-of-use rates.
“Overall, we saw an increase in solar policy action from 2015 to 2016,” says Autumn Proudlove, lead author of the report and senior policy analyst at NCCETC. “Notably, states considered more specific changes to net metering policies in 2016 and undertook fewer studies related to net metering. Many of these states have already conducted studies by now and are ready to take action.”
Specifically, the report found the following in 2016:
• 71 utility requests in 35 states and D.C. to increase monthly fixed charges on all residential customers by at least 10% were pending or decided;
• 28 states considered or enacted changes to NEM policies;
• 16 states and D.C. formally examined or resolved to examine some element of the value of distributed generation or the costs and benefits of NEM;
• 13 states took policy action on community solar;
• 16 utility requests in 10 states to add new or increase existing charges specific to rooftop solar customers were pending or decided;
• Eight states had policy action on third-party solar ownership laws or regulations; and
• Five states had action on utility-owned rooftop solar policies or programs.
According to the report, half as many residential demand charges were proposed in 2016 as in 2015, while requests to increase residential fixed charges rose over last year. No public utilities commission approved a mandatory residential demand charge in 2016, and 79% of requests to increase fixed charges were either not approved or partially approved.
In the fourth quarter of 2016, 42 states and D.C. took some type of action on distributed solar policy or rate design. A total of 131 actions were tracked in the fourth quarter, making it the busiest quarter of the year. NCCETC says it expects this high level of state and utility action on solar policy and rate design to continue into 2017.