Bills would boost ‘net metering’

They call it “net metering.” When a customer generates power on site – with solar panels, say, or a wind turbine – the utility provides a credit for surplus power that goes back into the grid, so if the customer uses 500 kW, for example, and generates 100 kW, he’d only pay for 400 kW.
Most states and several countries have such systems in place, though the specifics vary, and in most cases, the credits are limited. In Rhode Island, net metering is now capped at 25 kW per site, with a maximum statewide capacity of 1 MW.
Now, with two separate measures, legislators want to expand the net metering system and make it more attractive for consumers and businesses.
One bill, H-5566, would allow for larger systems to participate in net metering, while H-5551, which has a companion bill in the Senate, would provide enhanced credits upfront, to allow for faster recovery of the cost of installing renewable-energy systems.
Matt Auten, an advocate with Environment Rhode Island, said H-5566 would help tremendously by allowing larger projects to benefit from net metering.
“Right now there are pretty restrictive caps on the size of the projects that can be considered and an overall system-wide cap,” Auten said. “That’s not allowing the expansive development that we would like. It would make a lot of sense to revisit the issue and bring Rhode Island in line with what surrounding states are doing.”
The bill, sponsored by Rep. David A. Segal, D-Providence, who did not respond to repeated requests for comment, would remove the overall cap and allow for systems up to 1 MW to be eligible for net metering. This would be more in line with states such as Connecticut, which recently raised its eligibility cap from 75 kW to 500 kW.
It also would help those with larger on-site systems, such as the 26 cities, towns, businesses and universities that make up the Rhode Island Wind Alliance. According to Paul Sanroma, administrator of the alliance and chairman of the Bristol Wind Power Group, the “bare minimum” system being considered within the alliance is 600 kW, and they go up to 2 MW.
The bill also would eliminate National Grid’s ability to zero out any credits still on an account at the end of the year.
The House Corporations Committee heard testimony on the measure last month, and Chairman Brian Patrick Kennedy, D-Hopkinton, said that while he is open to the concept, he is concerned that it might lead to rate increases. He based this on concerns voiced by officials from the R.I. Division of Public Utilities and Carriers.
“If you increase the renewables in Rhode Island, there may be an excess of electricity, and the division can then grant National Grid rate relief with a surcharge on everyone’s bills,” he said.
But David Graves, a spokesman for National Grid, said that currently that is not a concern.
“The technology is not there yet,” he said. “Most customers who have systems like solar panels are still using more electricity than they generate.”
Graves would not comment on the legislation itself, saying he was unfamiliar with the details.
Kennedy said he is even more concerned with H-5551, also sponsored by Segal, and its Senate companion, S-303, sponsored by Sen. Joshua Miller, D-Cranston.
That bill would help subsidize renewable-energy projects by paying three times the standard offer rate for electricity put on the grid by the system for the first five years. Following the first five years, the builder would be paid only half the standard offer rate for energy put on the grid until the cost of the incentive rate is recovered, or up to 12 years.
“The idea is that one of the biggest challenges is the upfront cost of buying the system. The energy savings will pay back over time, but the capital needed upfront can make it difficult,” said Auten. “This allows for faster cost recovery. The idea is to make that happen more quickly so it’s a more attractive option.”
In the end the money gained through the first five years would be paid back, but Kennedy said he is still troubled by the prospect of essentially giving a producer an “interest-free loan.”
“The negative effect is that it’s creating a subsidy to the person building the project, and the subsidy is paid for by every rate payer when it is sold at the grid,” he said. “If we have to go to that extreme, we’re going to hear it from residential and business customers.”
But Miller and Auten said they believe there is a way to reduce the effect on customers.
“As we go forward and look at those concerns, we talked about alleviating them by setting limits on the type of projects that could be brought in,” he said.
This would mean putting limits on the types and size of projects that would be eligible and also on how many could take advantage of the subsidy each year.
“We could bring it down to a point where it really wouldn’t be a concern,” Miller added.
All three bills have been heard in committee and held for further study and possible revisions.