Net metering windfall in works?
Energy subsidy expanded in spending bill
A state program designed to help homeowners and municipalities launch renewable energy projects is getting a makeover on Beacon Hill that could give private wind power developers a financial bonanza.
The state program is called net metering. It was approved as part of the Green Communities Act of 2008 as a way of giving municipalities and homeowners an incentive to put up a wind turbine or solar panels. But a measure pending before the Legislature would transform this small-scale incentive program into a much broader, and costlier, renewable energy initiative.
“This really isn’t net metering anymore,” said one industry official familiar with the legislative proposal. “This is wholesale power production but with retail rates.”
Two concerns about the program soon emerged. The law set a cap on net metering projects equal to 1 percent of the local utility’s peak load. The cap hasn’t been reached yet, but the program has attracted so much interest that participants have become concerned they might spend months putting up a wind turbine only to discover that the 1 percent cap has been reached and they don’t qualify for net metering.
Utility officials are also concerned about the types of net metering projects being proposed. They say some of the private projects are not designed to offset a homeowner’s or municipality’s electricity usage, but instead are being set up as small power-generating facilities selling electricity directly to the grid to take advantage of the ratepayer subsidy. Current law limits the size of these private projects to no more than 2 megawatts.
Legislation currently pending on Beacon Hill would dramatically change net metering by raising the overall cap on the program from 1 to 3 percent of a utility’s peak load and allowing private developers to launch much bigger projects as long as they work in tandem with a municipality.
Lawmakers inserted the net metering provision in the wind siting reform legislation that stalled in the Senate at the end of the legislative session in July. With that bill going nowhere, an identical provision was slipped into a more-likely-to-pass spending bill that squeaked through the House this week and is currently pending in the Senate.
State officials say the net metering provision will spur wind power development, reduce fossil fuel use, and save electric ratepayers money in the long run. Opponents complain that the net metering approval process is largely hidden from public view, unregulated, and costly. Some officials estimate the customers of some utilities could be on the hook for $30 million in extra costs from net metering.
The net metering provision allows private renewable energy developers to build projects much bigger than 2 megawatts as long as they assign all of the power output to a municipality. The provision doesn’t spell out how this will work, but presumably the town would receive compensation for helping the developer obtain net metering subsidies for his power.
A proposed wind farm project in Kingston, which is represented on Beacon Hill by Senate President Therese Murray, stands to benefit from the net metering changes. Mary O’Donnell, the owner of a large piece of property adjacent to the former town landfill, wants to put up four, 2-megawatt wind turbines and assign all the power output to the town. Under net metering, she would be paid the retail price for her power instead of the much lower wholesale price, with ratepayers picking up the much higher tab.
“However, if and when the legislation passes, this issue would ultimately be clarified by the Department of Public Utilities, which would need to revise the state’s net metering regulations to reflect this provision,” she said.