Seven suburbs blast Eversource solar proposal

Seven suburbs blast Eversource solar proposal

Communities say rate change could cost them $1.6m annually

SEVEN WESTERN SUBURBS of Boston are crying foul about an Eversource proposal that would cut the amount of money they receive for selling solar energy to the power grid, resulting in a $1.6 million loss of revenue annually.

The proposal, contained in a massive $96 million rate request filed by Eversource in January, would cut the so-called net metering rate from 22 cents a kilowatt hour to 13 cents a kilowatt hour, a 41 percent decrease. The details were included in a letter sent by the seven communities to the state Department of Public Utilities on Wednesday.

The letter said Lexington stands to lose $372,000 in annual revenue under the proposal. Newton would lose nearly $365,000, Natick $300,000, and Weston nearly $284,000. Wayland, Westwood, and Arlington would lose lesser amounts.

The letter was signed by town officials in each of the communities, including Newton Mayor Setti Warren, who is running as a Democrat for governor.

Ann Berwick, the director of sustainability in Newton, said the proposed rate change went largely unnoticed until two weeks ago even though the Eversource proposal was filed initially in January. “It just flew under the radar,” she said.

Berwick, a chair of the Department of Public Utilities under former governor Deval Patrick, acknowledged that electricity rates are not set in stone and are subject to change. But she said a rate reduction of such great magnitude would have a devastating impact on the solar power purchase agreements the municipalities have entered into with developers building solar facilities on city land.

The letter sent to the DPU by the municipalities said the rate change could undermine existing power purchase agreements that rely on the net metered rates. “Many of these solar projects will become uneconomic from the perspective of the municipalities,” the letter said.

Meet the Author

Bruce Mohl

Editor, CommonWealth

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The municipal officials urged the DPU to reject Eversource’s proposal because the “instability in policy” it would foster would make communities less likely to enter into similar long-term energy deals in the future.

“If there is an area in which the Commonwealth should not be projecting that kind of instability, it is with regard to the development of renewable resources,” the letter said. “The Global Warming Solutions Act evidences a commitment to meet certain greenhouse gas emission requirements, which cannot be met without clear and consistent policies to facilitate the development of solar electricity and other forms of renewable resources.”

  • And, so, we see Eversource at its true nature, aligning with the worst actors in the utility business, like Arizona utilities, and the utility on Hawaii. They do not know how to compete in this modern world, not even as well as National Grid, and so they fight to maintain their own status quo and regulatory capture, using the devices of the Associated Industries of Massachusetts, regulatory capture, pressuring media outlets to limit presentations of issues to their perspective, and campaign contributions.

    It doesn’t matter. As is developing with the utility in Hawaii, Eversource is digging its own financial grave. I welcome the day when it goes bankrupt.

  • NortheasternEE

    On our bills Eversource charges less than 10 cents a kilowatt hour for the electricity it passes on from the power plants that generate it. To stimulate the advancement of renewable energy, state laws and regulations force Eversource to compensate solar generators at 22 cents a kilowatt hour. That is more than twice the going rate. So, for every kilowatt hour of solar energy Eversouce is forced to buy, it loses some 12 cents. Those loses are passed on to those of us who cannot afford to participate in the generation of solar energy. Even at 13 cents a kilowatt hour Eversource would be suffering losses that the rest of us would be forced to make up.

    Some ten years ago, it might have made sense to stimulate renewables by compensating them at more than twice the going rate, but as the penetration of wind and solar on the grid increases, wind and solr need to show that they can compete with existing sources of energy. Vilifying Eversource for trying to level the competitive wholesale market for electricity may sound good. But forcing them to keep swallowing the extra cost of wind and solar energy as we head to 100% renewables is not sustainable.

    • MarkfromLexington

      What you have to remember is that once Eversource pays for that kWh of electricity at the net metering credit rate (slightly less than the full retail electricity rate) – they then turn around and sell that kWh of electricity to one of the nearby neighbors at the full retail electricity rate. There is no lost revenue to pass around to anyone else. In fact, that whole transaction is slightly positive for Eversource.

      Plus we all save money because the utilities don’t need to build as many power plants and transmission lines.

      In addition, because solar produces its power during the day – it lowers the price of power when it is needed most – again saving ratepayers money. Study after study shows that solar produces more value for the grid than it costs. And that isn’t even counting the health benefits of cleaner air and cleaner water.

      • NortheasternEE

        The scenario you describe is not sustainable. If everyone installed enough solar panels to cover the electricity they use, Eversource revenue would approach zero. Without a healthy Eversource there is no one to maintain the transmission lines that provide electricity at night and on cloudy days. Next time you see an Eversouce crew working on a pole in your neighborhood, remember that all your neighbors with solar panels on their roof are not contributing their fair share to pay for this service.

        Net metering also covers community solar fields whose power must be bought by distribution companies like Eversource. These installation require additional transmission lines whose cost shows up in our bills. As for power plants, since power from wind and solar cannot be depended on to be available when needed, the amount of conventional power cannot be reduced, and no power plants can be retired without replacement. As more and more intermittent solar and wind power is added to the grid, the demand for baseload coal and nuclear power is reduced to the point where coal and nuclear power plants are forced into early retirement. These are being replaced by flexible natural gas and hydro power from Quebec. In support of this effort, new pipe lines to Pennsylvania are proposed to bring in more natural gas, and high voltage power lines to Canada are required to get more hydro power from Quebec.

        All of these grid upgrades in support of mandates for renewable energy have to be funded by the difference between the wholesale price of electricity and the retail price we pay. Folks with solar panels on their roofs are getting a free ride at the expense of the rest of us. It is only fair that the Net Metering rate is reduced down to the wholesale price of electricity which is less than 10 cents per kWh.