Not a day after Gov. Dannel P. Malloy’s state-of-the-state address with its brief mention of climate change and clean energy, the policy flurry over them reignited.
The governor’s office filed two bills (here and here) as companions to the long-delayed update to the state’s Comprehensive Energy Strategy, the near-future blueprint for energy use and development in the face of climate change.
The Department of Energy and Environmental Protection has reworked the CES, as it is known, in key areas from a draft version released last summer. That version had sparked widespread objections – some 2,000 comments were filed – mainly involving solar policy. But while one solar flashpoint has been somewhat resolved, another remains hot, with environmental advocates already girding for a showdown as the legislation needed to advance the CES gets ready to move through the three-month legislative session.
“That this massive switch in direction in solar policy in the state of Connecticut is dropped in the energy committee’s lap after the session started is unconscionable,” said Mike Trahan, executive director of Solar Connecticut, the industry trade group here.
The draft CES came in for withering criticism from the solar industry, environmentalists, and renewable power experts because it called for capping the kind of solar power known as distributed or behind-the-meter generation – that’s what people and businesses put on their roofs – at about 20 megawatts a year. In 2016 Connecticut added about 90 megawatts of solar in all.
The emphasis would have shifted to grid-scale solar – large solar fields that send power directly into the electric grid, generally cost less per kilowatt to build, and, DEEP argued, are far more cost-effective. But many felt that wasn’t practical in a state with limited open space and large portions of the year without much sun; that people who want to put solar on their roofs should have that right; and that putting limits on solar would undercut the state’s solar industry as well as any effort to increase renewable power use.
The final CES drops the 20 megawatt cap in favor of a financial cap of $35 million a year for all distributed renewable generation systems two megawatts or smaller.
While some worry that will hold solar at its current growth rate as opposed to helping that rate increase, DEEP believes the $35 million level will help force installation prices down to get more projects under the cap.
Despite equally withering criticism from solar advocates, the final CES keeps in place changes the draft made to the way residential solar customers are compensated for the excess power their systems make and send back into the grid during certain times of the day. The changes were supported by the electric utilities.
Under a concept called “net metering,” solar customers in Connecticut now are paid the retail electric rate for the power they sell back. Net metering broadly has been viewed as essential to solar energy adoption, especially at a time when systems cost more than they do now. When a customer sells power to the grid, his electric meter runs backward.
The utility industry nationwide, not just in Connecticut, has long argued that, because of the revenue they lose from solar customers who only draw power from the grid part of the time — chiefly at night — they have to charge non-solar customers more to maintain the grid. That belief, commonly called cost-shifting, is largely discounted by solar advocates, who say that solar power actually helps utilities spend less because there is less wear and tear on the grid, hence less need for maintenance. And it can help lessen congestion at peak energy-use times, thereby keeping prices down for everyone. Solar customers, they say, should be rewarded, not penalized.
“DEEP would have us believe that a program that created thousands of jobs in the state and millions of dollars in tax revenue is broken,” said Trahan of net metering. He predicted a “battle royale” in the legislature over solar policy.
Broken or not, nationally states are stepping away from net metering as the solar industry matures and costs come down, even though tariffs imposed by the Trump administration on imported solar cells threaten to stall that decrease. DEEP is fully embracing the net-metering retreat – proposing to end it entirely.
The proposal is to use what’s known as a “two-meter,” or “buy-all, credit-all” concept. Essentially a solar owner would be required for a 20-year period to sell all his or her power to the grid at a new, presumably lower-than-retail rate to be determined by the Public Utilities Regulatory Authority. Then he or she would have to buy back all the power they use at a retail rate.
It literally requires two meters – one to track incoming electricity at the retail rate and the other for exported power at the lower rate. Such a physically split system probably would make it impossible to install a battery storage system for use in a power outage or at any other time. There also would be little incentive to do that since an owner would now have to supply that battery with retail-rate power instead of the power that used to be free from the solar system.
It also probably would make it difficult to have any kind of home-based smart energy system that would help reduce energy demands and integrate with more modern grid concepts. Existing customers could retain their present net-metering system for a period of time.
“This is radically anti-consumer and, ironically, at odds with the grid modernization recommendations of the CES that want to explore integrating smart meters, efficiency and demand response, storage, solar, and other customer-sited resources for numerous grid benefits, including peak-demand management,” said Bill Dornbos, advocacy director and senior attorney for the regional environmental group Acadia Center, which in December spearheaded a statement of principles by energy and environmental activists.
“Maine is the only other state that has tried to end net metering by adopting the controversial two-meter approach, and it has been a solar policy disaster,” Dornbos said. Maine’s new solar rules are delayed until April while a court battle plays out.
James Schwartz, owner of Independence Solar, said the two-meter proposal prevents solar owners from exercising autonomy over their own systems.
“The CES is supposed to be an energy vision for the next five, 10, 20 years, but it’s nothing but a backward-looking model,” he said, focusing on the requirement that solar owners sell all their power to the grid without retaining any ability to manage its use. “Your relationship with the utility is exactly the same as it was in 1975. The only difference is you have generation on your roof.”
DEEP argues that the proposed rate system is easier, clearer, and more flexible in the face of electric rates that tend to go up over time. “The spirit here is to make sure we have a sustainable program that’s going to last a long time,” said DEEP Commissioner Rob Klee.
“It focuses on insuring we’re paying as much as we should, but not more. It also enables us to pay more where appropriate when that solar is providing extra to the grid.”
As the largest electric utility in the state, Eversource stands to benefit most from stepping away from net metering. “We support DEEP’s efforts to make the system more transparent,” said Eversource spokesman Mitch Gross.
Criticism is more muted over the CES’s plan to reconfigure a number of non-residential clean energy power supply programs into one competitive process in which the lowest bidders generally are the winners. Included are the highly successful zero- and low-emissions commercial renewable programs — which are on a one-year extension past their six-year life already — municipal renewables and shared renewables.
The shared program is mostly aimed at providing solar power to homes that can’t otherwise have it. It has been in pilot-project form and its inclusion in this group is likely to expand its reach dramatically.
“My first impression is it’s a step in the right direction but could be more robust,” said Paul Michaud, an attorney who works with commercial clean-energy projects and also runs the Renewable Energy and Efficiency Business Association.
He said the project sizes and totals allowed are too small, and there’s nothing that addresses the gnarly issue of siting. Connecticut residents have become notorious for balking at all kinds of energy projects because they don’t like the way they look.
There is also concern that if legislation does not pass this year those commercial programs on extensions will end abruptly, taking businesses, employees and tax revenue with them.
The CES is getting praise from renewable energy proponents on other fronts, starting with the fact that it differs dramatically from the 2013 CES, the state’s first, which focused on increasing natural gas as an energy source to bridge from oil and coal to more renewable energy.
The 2018 strategy is far more focused on the nexus of climate change and energy, offering multiple approaches for reducing the greenhouse gas emissions that cause climate change and its cascading impacts, such as sea-level rise. As if to underscore that point, one of the governor’s bills would change the name of the CES to the Comprehensive Climate and Energy Strategy.
“We’re more explicit this time around about the intersection between our energy choices and our climate challenges and the fact that we have such ambitious climate goals that are really driving a lot of our energy policy,” Klee said.
Those goals include a new interim target to reduce greenhouse gas emissions 45 percent below 2001 levels by 2030. The Governor’s Council on Climate Change (to be renamed the Connecticut Council on Climate Change) approved that last month as a way to force the state back on track to meet its 2050 reduction goal of 80 percent.
The CES bolsters that effort by extending and increasing the amount of renewable energy the state is required to use. The Renewable Portfolio Standard, as it is known, has been 20 percent by 2020. The CES is proposing 40 percent by 2030, below what some would like but substantially more than the 30 percent by 2030 proposed in the draft CES.
The new CES and accompanying legislation also propose ways to make the ratepayer funds destined for the Green Bank and for energy efficiency all or at least partially “raid-proof” so the legislature can’t do what it did last session and swipe a hefty chunk of those funds to plug budget holes.
To safeguard some energy efficiency money, the plan is to procure efficiency services in a way that doesn’t require accumulating a pool of funding like that raided last year.
For the Green Bank, which uses ratepayer funds to leverage private investment to help people buy clean energy systems, the plan would be to double the amount of ratepayer funding it gets – now about $27 million a year – for a few years. That would allow the bank to establish a strong, self-sustaining portfolio, so in 2025 it can be cut loose to run on its own without any further ratepayer funds.
Of course the danger is that while the portfolio is being built up, the legislature could again decide to take some of the money, which Klee admits worries him. “The legislature has already demonstrated some bad behavior,” he said, a good bit more diplomatically than he has recently.
Overall the CES is a more streamlined document than it was in 2013 offering eight strategies:
- Sustainable funding for energy efficiency, including new funding mechanisms for the Green Bank and Energy Efficiency Fund.
- An energy efficiency industry marketplace, including workforce training and preparation for new technologies.
- Zero-carbon generation, including increases in renewable energy sources and the amount of renewable energy that must be used, a reduction in dirtier landfill and biomass gasses, and incorporation of the Millstone Nuclear Power Station plan announced on Feb. 1. It allows Millstone to bid in energy auctions to sell its zero-carbon power against renewables – but with some restrictions.
- Distributed generation, including the controversial net-metering rollback and financial cap.
- Grid reliability and resilience, including addressing concerns about the limitations on energy sources for the New England grid and providing additional impetus for microgrids – systems that can separate from the main grid and supply power when the grid is down.
- Often-overlooked plans to increase the use of electric vehicles to help lower greenhouse gas emissions.
- Increased mobility connectivity, including land-use planning to promote less driving as a way to cut emissions.
- A study of grid modernization.
Legislative approval will be necessary for much of this – daunting in a long session let alone a short one like this. Some are comparing the measures already in the governor’s two bills to the massive legislation in 2011 that created DEEP and a laundry list of programs and entities – including the Green Bank. It took a Herculean effort to complete that.
Overhanging all of it is the economic state of the state, more dire than it was in 2011, and the economics of energy rates. The battle over energy rates – which often comes down to whether to keep rates lower now or pay more now to invest in technologies and efficiencies that can reduce energy usage and bills long-term – promises to flare yet again.
“We continue to be concerned regarding the level of attention being paid to the impacts of some of these climate-focused policy positions on Connecticut’s ratepayers,” said Eric Brown of the Connecticut Business and Industry Association.
Rep. Holly Cheeseman, R-East Lyme, a first term representative who serves on the Energy Committee, said she was concerned how to advance renewable energy goals and still keep the cost of energy affordable. “I’m staggered by the numbers of people who can’t afford utility bills,” she said.
She worried further that setting goals doesn’t mean they’re going to play out in terms of financing or the technology itself. “We have a puzzle with 1,000 pieces, and at the moment we’ve only been able to do the corner pieces,” she said. “We may be able to get the border, but the pieces in the middle — we don’t know how they’re going to fit together.”