DPU must protect solar projects from utility rate proposal

Printer-friendly versionSend by email

From the Beacon, September 2017
 
The MMA and many cities and towns are voicing strong opposition to an electricity rate-setting proposal that Eversource Energy has submitted to the state Department of Public Utilities. The industry rate request would affect municipal and residential electric bills, and would harm the future development of solar energy in the Commonwealth.
 
Clean and renewable energy is a top priority for cities and towns in Massachusetts. Municipal leaders have been instrumental in expanding solar energy throughout the state, enabling us to surpass all initial renewable energy goals and become a national leader in solar. Massachusetts has been ranked number one in the nation in energy efficiency by the American Council for an Energy-Efficient Economy.
 
Eversource’s proposal would change the existing electricity rate structure and implement a 40 percent reduction in the value of solar energy net metering credits received by cities and towns. This would have a highly negative impact on municipal budgets, and would dramatically alter the economic factors that communities take into account when they develop and enter into contracts for solar projects.
 
Local projects have been the foundation of our state’s solar strategy. In 2016, the Legislature enacted a law to preserve the retail rate for net metering credits for municipal and governmental projects. But the proposal by Eversource would circumvent the Legislature and do the opposite of what lawmakers intended.
 
Over the years, state officials have encouraged communities to advance and develop solar energy in order to reduce carbon emissions and allow the state to meet its clean energy goals. However, this proposal, if approved, would penalize municipalities that have taken these steps and would make it extremely difficult for cities and towns to advance renewable energy projects in the future.
 
As an example, according to local officials from Arlington, Lexington, Natick, Newton, Wayland, Weston and Westwood, these seven communities stand to lose a combined $32 million over the next 20 years if the proposed rate change goes into effect. Extrapolating this to the entire state, the impact would easily be in the hundreds of millions of dollars.
 
Municipal officials are concerned that the utility industry proposal would not only jeopardize future projects, but would also affect current projects. For many existing projects, the net metering reimbursement rate would actually fall below the amounts being paid to developers, meaning that municipalities would lose money.
 
Municipal budgets are very tight, and the Eversource proposal would have a large and lasting negative impact on all municipalities with existing and future projects – and clearly could impact the savings that communities originally expected when they planned their solar projects. This would place an unfair and costly burden on municipalities that appropriately based their approvals, decision-making and budget frameworks on the understood and prevailing treatment of solar projects.
 
Eversource claims that its rate restructuring plan is based on more factors than a simple reduction in net metering credits, and says that their new rates would more accurately reflect the cost of providing electricity. We are highly skeptical of this, and have asked the DPU to postpone action on the Eversource proposal until a full review is conducted and all parties can agree on the impact. Then the DPU will be in a position to be fully informed, and, armed with complete transparency and public awareness, we are confident that the DPU would reject rate proposals that would diminish net metering credits or undermine the incentives to continue expanding solar energy.
 
In addition to rate changes, Eversource’s proposed rate design includes an additional monthly minimum charge and a demand charge for net metering customers for certain types of projects. We strongly oppose any such additional charges on municipal customers. We support a permanent exemption for new and existing municipal net metering customers. Municipalities want to continue to host solar facilities and use clean energy, and adding new costs would make it infeasible for communities to do so going forward.
 
Changes in solar financing through rate restructuring, the addition of monthly minimum or demand charges for solar projects, and a decrease in incentives for communities would all lead to increased costs for municipal customers, which would ultimately fall on local taxpayers in the form of higher property taxes or reduced services elsewhere in the budget.
 
Any community that hosts or plans to host a municipally backed solar energy facility has a stake in the Eversource rate case, because the outcome will affect local finances, current solar projects, and the future development of renewable energy. Concerned local leaders should contact their legislators, the Baker administration, and the DPU to call for the protection of municipal net metering credits and opposition to new rates or charges that would undermine the development of solar energy in Massachusetts.
 
Massachusetts cities and towns have been national leaders in the development of solar energy. The DPU decision in this case will determine whether our communities can continue their outstanding work building a cleaner and more sustainable energy future.