With only days to spare, the most consequential energy legislation in years appears to be just about ready for a vote in the General Assembly.
But Senate Bill 9, proposed by Gov. Dannel P. Malloy to implement the state’s updated Comprehensive Energy Strategy (CES), is still facing controversy, even though it has undergone massive changes since it was approved by the Energy and Technology Committee – albeit with most committee members holding their noses.
The plan at that time was to move it along, but to continue negotiating its provisions. There have been days of discussions over the last month among the committee’s leaders and the Department of Energy and Environmental Protection. The governor’s office, the environmental advocacy community, business interests and affected industries have kept close watch.
The result is massive changes – items are out, new ones are in and just about everything else has been altered somehow. Details matter and most are wonky, if not downright arcane. Discussions are continuing, but many expect the bill to be taken up in the Senate by the weekend.
The biggest issues continue to involve solar energy policy, especially how solar customers are compensated for the excess power their systems make and send back into the grid during certain times of the day. Dissatisfaction with compromise language is causing rare splits within the environmental advocacy community and the solar industry.
Some organizations are willing to balance support for provisions in the bill they feel are needed with a system they don’t like for compensating residents for solar they sell to the grid. Others are calling for defeat of the bill because of that system.
“We have to look at this holistically,” said Claire Coleman, climate and energy attorney for Connecticut Fund for the Environment. “It’s a difficult and not ideal situation. We have to keep in mind Connecticut’s climate goals when we look at the tradeoffs we’re being forced to make.”
That tradeoff involves the state’s current solar compensation system, known as “net metering.” Solar customers are paid the retail electric rate for the power they sell back to the power grid. Many states, like Connecticut, are looking for a new paradigm as the solar industry has matured and prices have come down.
The Comprehensive Energy Strategy (CES) and original legislation did away with net metering, replacing it with a “buy-all/credit-all” concept. Essentially a solar owner would have to sell all his or her power to the grid at a rate to be set by the Public Utilities Regulatory Authority (PURA) and buy back what he or she needed at the retail rate.
Such a system would mean higher fees for solar owners and would probably make it impossible to install battery storage or home-based smart energy systems that would help reduce energy demands and integrate with more modern grid concepts.
The bill contains both for residential solar customers. They will be allowed to choose either buy-all/credit-all or net metering, but at a to-be-determined rate – known as a tariff – set by PURA.
What was debated heavily was how frequently the net-metering calculations would be done. DEEP had wanted it often. Environmental advocates had argued consumers would benefit more if it were less frequent. PURA will make the determination.
A coalition that includes the environmental groups Acadia Center, Vote Solar, Environment Connecticut, Citizen’s Campaign for the Environment and Connecticut Citizen Action Group, as well as the solar companies Vivint and Sunrun, announced their opposition to the bill in a statement: “We favor smart, simple, and gradual net metering reform for rooftop solar, and not the complex and drastic reforms that exist in the present bill language,” it said in part.
But Tim Schneider, owner of the solar company Earthlight Technologies said in a letter to legislators that he could support the bill, even with flaws. “There is too much at stake here to end up with nothing,” the letter said.
Utilities nationally generally have opposed net metering, and Eversource has been no exception. “We support DEEP and PURA’s efforts to establish greater transparency in customer energy costs. The proposed tariff system would help to achieve that,” spokesman Mitch Gross said in an email statement.
Eversource and other utilities often refer to an impact known as cost shifting – a concept widely disputed by the environmental community – in which those without solar are said to have to pick up additional costs to compensate for people who do have solar.
Connecticut Consumer Counsel Elin Katz has been vocal about her opposition to the existing net metering system because of that. She is on board with SB 9 and with PURA setting rates, known as tariffs. “Having the full administrative proceeding before PURA enables us to have a full dialogue,” she said. Others have argued it puts too much power in PURA’s control.
But it’s the idea that a brand new policy is being instituted without first figuring out what parameters will work that has Rep. Jonathan Steinberg, D- Westport, a member of the energy and technology committee, concerned. “I believe tariffs are inevitable. I have no problem philosophically, but that doesn’t mean we have to do it now. What if PURA doesn’t act fast enough?” he said.
At the same time Steinberg called the bill “vastly improved.”
“I’m somewhat impressed,” he said.
The bill also deals with the existing program for commercial solar and other renewable and clean energy – such as that from fuel cells – which is already on a one-year extension and in need of a replacement. The program will be extended for another year while a new program to combine commercial and other non-residential programs into a single competitive process is designed and implemented. Members of the solar industry have concerns about some of the new program’s details and timing.
The bill also tackles shared solar – a way for those unable to install their own solar to get access to it by buying a share of a larger solar project. The arguments over shared solar have been going on for several years. Initially it was over whether the state should just plunge into a full program based on the many examples around the country. But a small pilot project was started instead.
Its balky start further enraged advocates who backed a separate bill to start up a full program, even with the pilot still underway. That bill has been rolled into SB 9, though modified somewhat. There’s a 25-megawatt annual cap on it and it’s largely focused on low- and moderate-income homes, small businesses and state and municipal projects. Homeowners broadly will face a high bar to participate.
The one piece of original language still intact is an extension of 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 legislation follows the recommendation in the CES to reach 40 percent by 2030.
DEEP declined an interview request noting that negotiations were still underway.
While not a full-throated endorsement, the Connecticut Business and Industry Association’s Eric Brown called the bill a good attempt to balance economic, environmental, resiliency and reliability factors. “Our primary focus is to try to bring down the cost of energy in Connecticut,” he said. “Are there still some things in there that are going to put upward pressure on energy prices? Yes there are. But there are other things to help slow those increases.”
Sen. Paul Formica, R-East Lyme, Energy Committee co-chair and part of the leadership team that revised the bill, called it a rolling stone bill. “You don’t always get what you want, but you get what you need,” he said, calling it a genuinely bi-partisan bill. “I think it’s a good step — there are things that everybody doesn’t like about it.”
“Net metering kind of deserved a transition instead of clear ending. That’s what we tried to do,” he said.
But he and others worried that the bill could fall victim to circumstances that have nothing to do with its merits. “Anytime you enter the last week of the session, this could be held hostage or promoted depending of the flavor of the day,” he said.
A number of environmental and solar advocates wouldn’t mind that, since it would leave the current net metering plan in place. But others are playing a longer game. Specifically they worry that if SB 9 dies, a companion piece of climate legislation – SB 7 – will become collateral damage. It sets new interim targets for greenhouse gas emission reductions, recalibrates sea level rise levels and institutes new resiliency standards to deal with climate change.
“While the current version of the bill reflects enormous progress, we regret that the net-metering language is still flawed and falls short of what is needed to satisfy many of our allies. And we continue to push for further improvement,” said a statement by John Humphries, who runs the Connecticut Roundtable on Climate and Jobs.
So the Roundtable, he said, “has decided to support this bill and work to get it passed, along with SB7.
“But if these bills pass in the coming week, the fight is not over,” Humphries said. “We will be back next session to work alongside allies to fix the remaining problems in this energy bill.”