Energy Department proposes new plan to encourage renewable projects cut out of net energy billing
The Maine Department of Energy Resources is looking to launch a new regulatory framework for large scale renewable generators across the state, floating a draft proposal for projects recently cut out of the state’s clean energy credit program. The proposed program would make it easier for renewable energy to be included in ratepayers’ standard offer, […]
The Maine Department of Energy Resources is looking to launch a new regulatory framework for large scale renewable generators across the state, floating a draft proposal for projects recently cut out of the state’s clean energy credit program.
The proposed program would make it easier for renewable energy to be included in ratepayers’ standard offer, and projects could work directly with utilities to bring more power generation to particularly stressed areas of the distribution system.
The department worked with policy advisors with DNV and Current Energy Group to develop the draft proposal, which was published at the end of August. The groups then held a webinar last week to begin to gather feedback.
The proposal is designed to encourage new renewable energy projects, said Christina Thayer, a consultant with Current Energy Group. It aims to support “affordability, reliability, and clean energy. Each part delivers a critical component of electricity service and is capable of meeting grid needs today and in the future.”
The proposal is the latest development in the state’s efforts to boost renewable energy while reforming the net energy billing program — which is designed to encourage renewable energy projects by offering customers credits to offset their power bills.
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But last year, the Legislature passed a law so that projects that produce energy off-site are no longer eligible for net energy billing. Often called front-of-the-meter projects, these typically involve larger scale installations, like community solar.
That same law directed the department to create a successor program for front-of-the-meter projects, to encourage the development of renewable energy and still benefit ratepayers.
“Significant load growth is expected in the state,” said Dan Cross-Call, director of regulatory and policy innovation at Current Energy Group.
Cross-Call said renewable energy projects can “be built cost effectively and in a modular, scalable fashion to meet that load growth, or and contribute to the load growth that’s expected.”
The proposal
Rather than creating a credit like net energy billing, the draft seeks to establish a regulatory framework to create a new type of business model for renewable projects.
The first part would allow a project to sell energy to standard offer providers — the provider selected by the Maine Public Utilities Commission to provide energy as the default “standard offer” rate to utility customers.
“This will secure an increasing amount of long-term energy supply, serving to protect a portion of Maine’s energy needs from short-term market volatility,” Thayer said.
The second part would deploy renewable projects in parts of the state where the electric distribution system is stressed. By adding new local energy at specific times, the renewable project can ease the stress on the infrastructure.
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For example, a utility would identify that a specific transformer is overloaded in the summer, because a new housing development has been built in the area, increasing the electricity use in the area.
The utility would need to make upgrades to the transformer, or other pieces of the local distribution circuit. But instead, the utility could install a solar panel project, which could provide energy to the nearby area and take the load off of the transformer, and extend its lifespan for five to ten years.
Thayer said that will allow renewable energy projects to “provide sophisticated real-time grid support in response to system conditions.”
Under the draft proposal, utilities would have to consider adding a renewable project, and evaluate if it is a more cost-effective option.
Neither element of the proposal would directly affect a ratepayer’s utility bill. The standard offer proposal aims to make it easier for providers to buy renewable energy, so in the long run that should help reduce energy costs. And it could mean that standard offer customers then get more of their energy from renewable sources.
“We see the standard offer service as a reliable, established avenue for securing project revenues,” Thayer said.
Similarly, the second piece of the proposal is meant to extend the lifetime of distribution infrastructure, so ratepayers pay for less frequent upgrades. And it should also result in more renewable energy projects in some areas.
The proposal is not yet finalized, and the department is accepting public comments emailed to doer@maine.gov through Friday, Sept. 11. The department has said it is particularly interested in comments regarding price setting for the proposal and cost allocation and recovery.
The department has until Sept. 30 to finalize the proposal and submit it to the Maine Public Utilities Commission. The commission will then begin its review process before the program could be implemented.