Massachusetts Governor Charlie Baker Releases Solar Net Metering Bill

One week after the Massachusetts legislature departed for its summer recess, Governor Charlie Baker released net metering legislation to rival the Massachusetts Senate’s recent bill on August 7, 2015.

Where the Senate bill would have simply raised the net metering cap to 1600 MWs and largely retained the current net metering credit calculations, the Governor’s bill would increase the metering cap but would substantially reduce the calculation of net metering credits. In some instances, the value of net metering credits could potentially be more than halved.

Big Picture:

Many of the features of this legislation are not unexpected. And yet the complete elimination of “wires” charges from the calculation of the value of the net metering credits appears to be at odds with the emerging conclusions of other statesinvestigations, and the report of Massachusetts’ own net metering task force, which have begun to develop clear economic analyses indicating that distributed solar provides value to the grid in excess of the value of the power generated and in many cases in excess of the “full retail” rate for power, including wires charges. When the legislature returns to session this Fall, the Joint Committee on Telecommunications, Utility and Energy will have substantial work to do to reconcile these rival bills.

The Details:

Immediate Net Metering Cap Increase:

Upon enactment, the so-called “private cap” would be increased to 6% of peak historic load from the current 4%. The so-called “public cap” for net metering facilities of a municpality or other governmental entity (“MOOGE”) would be increased to 7% from the current 5%. The DPU would be permitted by law to later further increase the caps if it finds it to be in the public interest.

DOER’s New Program Post-1600MW:

DOER would be required to implement a program to take effect upon 1600 MWs (DC) of SREC qualified solar (e.g. apparently measured by receipt of SOQs from DOER totaling 1600MWs of DC nameplate capcity).

Reduced Net Metering Credit Values Under the New Program:

(1) For most facilities:  The value of net metering credits for solar projects >10kW on single phase or >25kW on 3-phase will be the average monthly clear price in ISO NE; i.e. wholesale rates, period. In a big change from current law, the value of all wires charges (distribution, transmission and transition) is apparently excluded.

(2) For favored categories; i.e., only MOOGE facilities, facilities for low income off-takers and community shared solar facilities, the value of net metering credits will be the utility’s basic service kW charge. Apparently this also excludes wires charges.

Grandfathering Subject to Expiration:

Projects with existing Mass ACA cap allocations as of the date the 1600MW DC level is reached would continue to receive net metring credits under existing law, but subject to a reduction after 20 years, at which point only the wholesale rate would be provided.

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