Solar panels in Damariscotta, Maine. (Photo by Evan Houk/ Maine Morning Star)
When Maine’s solar energy incentive program was expanded in 2019, former state legislator Jeffery Hanley was at the table during those discussions.
“It was, in my eyes, a disaster then, and it’s a disaster now,” he told the current members of the Energy, Utilities and Technology Committee during a public hearing Thursday.
Hanley attended the hearing to speak in favor of a series of bills introduced by his fellow Republicans to repeal the state’s net energy billing program. The committee heard four such proposals with the stated goal of reducing energy costs for ratepayers. The bills drew hours of testimony from people who want to see the program tossed in the bin and those who believe it works but agree it could be improved.
Net energy billing is a utility program designed to encourage customers to install or participate in small-scale renewable energy projects like solar panels by offering credits to offset their electricity bills. It was expanded in 2019 so customers can use renewable energy generators located outside of their property but within the same utility service territory, such as a community solar project. That expansion, in particular, has come under fire for providing generous incentives to solar farm developers that utility customers are helping pay for.
The legislators seeking to repeal the program argue it is driving up costs for ratepayers, especially small businesses and low-income households who can’t afford to get solar panels. Opponents of the bills also want to lower energy costs, but many said that simply getting rid of net energy billing won’t fix the problem and could create an issue for those who have transitioned to renewable energy because of the program.
McCrum, a 15,000 acre potato farm and processing facility in Aroostook County, is paying $57,000 a month in public policy charges, according to an electric bill Senate Minority Leader Trey Stewart (R-Aroostook) shared with the committee while presenting LD 257. While Stewart specifically linked that charge to net energy billing, a representative from Versant Power told the committee he would get back to them with more information about what is included in that fee.
GET THE MORNING HEADLINES.
Legislators meant well when they enacted the net energy billing program; however, it grew too large, too fast and has now become a “job-killing solar tax,” said Sen. Stacey Guerin (R-Penobscot) when presenting her bill, LD 32. She said she has heard stories from her constituents who have had to close their businesses over mounting energy costs, which she also attributed largely to increased net energy billing costs.
However, the Natural Resources Council of Maine and others who testified at the hearing pointed out that volatile natural gas prices due to international events and other market factors have driven up energy costs in recent years.
Hanley argued that while it isn’t “all due to the solar issue…it certainly is a component.” And for those like himself who live on a fixed income and have seen their power bill more than double from four years ago, “This is just salt in the wound.”
The most recent analysis from the Office of the Public Advocate estimates the annual ratepayer cost of operational net energy billing projects to be more than $240 million, which is higher than expected, said Public Advocate Heather Sanborn at the hearing. Committee members said that number is higher than what they had recently been told, but Sanborn said her number includes a slew of projects that came online at the end of December.
While some ratepayers’ bills have increased, net energy billing has also helped launch a successful solar industry in Maine and stabilize rates for the schools, grocery stores, municipal governments and other customers who have participated in the program, said Caroline Colan from the Governor’s Energy Office.
Ending the program raises questions about what would happen to participants, which isn’t addressed in the bills, Colan added. The agency is open to modifying the program, but as written, the bills to repeal the program are “irresponsibly blunt.”
Legislature to again weigh whether clean energy credits are helping or harming Maine ratepayers
The Thursday hearing also included LD 450, which has nearly identical language to the bills proposed by Guerin and Stewart, and LD 515, which seeks more specifically to undo the 2019 expansion of the program.
Though she has concerns about how the program affects ratepayers, Sanborn testified neither for nor against the bill, echoing the need to modernize rather than completely scrap the program. With more than 100,000 participating ratepayers, Sanborn said she can’t support bills that would erase the program without a “legislative solution” for what would come next.
Instead of the blanket approach proposed in the bills, Maine State Chamber of Commerce President Patrick Woodcock, who spoke neither for nor against the bills, offered a series of suggestions to improve the current program, including a ceiling on credits, adjusting compensation rates based on the size of the project and more utilization of energy storage, among other considerations.
Though a renewable energy compensation program is not unique to Maine, Woodcock said the rates provided to large projects are more generous in comparison. Guerin touched on this during her testimony, saying that out-of-state developers have benefited by utilizing the tariff rate program, which offers a dollar credit to nonresidential customers.
In 2023, legislators passed some reforms to address those criticisms.
Sen. Bruce Bickford (R-Androscoggin) said he overpaid for a 9.5-acre parcel of land, but he has solar companies offering him nearly three times what he paid for the land.
“There’s a lot of land in the state that is overvalued due to solar,” he told the committee when presenting his proposal, LD 359, which would change how participants are credited for the energy they produce. More specifically, it seeks to cut out the compensation given for transmission and distribution.
Bickford said his bill would ensure that net energy billing remains fair, focused and beneficial to individual customers and argued it would prevent large-scale investors from dominating the resources.
Though he said the bill would not penalize existing contracts, environmental advocates testified against the bill arguing that it could hurt current participants.
YOU MAKE OUR WORK POSSIBLE.