Republicans push to end Maine solar subsidies but key lawmaker says it's unlikely
"A job-killing solar tax. That is what many companies across our state are calling Maine's solar development subsidy program, otherwise known as net energy billing," Sen. Stacey Guerin, R-Penobscot, a sponsor of one of four bills to end the program, told the Legislature's Energy, Utilities and Technology Committee.
Her constituents and other residents and businesses in Maine "are already having a hard time keeping the lights on," she said. "They cannot afford the increases to their electric bills caused by this solar tax."
However, the committee's top Republican said it's unlikely majority Democrats will agree to repeal the net energy billing program and may instead agree to compromise legislation.
Rebecca Schultz, senior advocate for climate and clean energy at the Natural Resources Council of Maine, said the Republican legislation would end rooftop solar, barring the technology to individuals and households.
The "biggest culprits behind rising electricity bills are fossil fuels and the climate change impacts they are causing — not solar energy," she told lawmakers. Significant rate increases since 2021 have been the result of volatile natural gas prices, Schultz said.
Costs to recover from storms also is a significant factor driving up CMP bills, amounting to $220 million for storms in 2022 and 2023, adding $10.29 to monthly bills. The cost of net energy billing does not account for benefits such as a pullback in demand for fossil fuel supply, less strain on utilities' transmission and distribution systems and reduced pollution, Schultz said.
The debate in Augusta over solar subsidies and net energy billing is not new. Net energy billing is intended to encourage renewable power generation, providing generators with credit for renewable power they produce and send to the electric grid.
Before 2019, eligibility was restricted to small generators, reflecting opposition from then-Gov. Paul LePage and many Republican lawmakers. The rules changed in 2019, following the election of Gov. Janet Mills and fellow Democrats in the Legislature. One provision directed utilities to buy power at fixed rates from larger solar projects with up to 5 megawatts of capacity.
In 2023, state law limited project size again, changed the formula for subsidies and reduced the eligibility for participating commercial and industrial projects.
The most recent uproar — the hours-long legislative hearing drew an overflow crowd drawing scores of speakers on both sides of the issue — was at least partly due to skyrocketing electricity bills for some manufacturers and other businesses.
The Public Utilities Commission is again looking into how much of a power bill should be used to incentivize renewable energy projects. Manufacturers, policymakers, utilities and others agree that Maine must add more solar and wind energy to reach targets for reduced greenhouse gas emissions. Disagreements focus on how to apportion the cost.
Jason Woollard, an Aroostook County potato grower who farms 15,000 acres of crops in a family business dating to 1886, told lawmakers his business added a potato processing plant in the last few years. Net energy billing policies "are killing our business," he said, with a $690,000-a- year bill for electricity as part of a public policy charge.
"Our competitors don't have to pay that," he said.
Rep. Gerry Runte, D-York, said net energy billing represents a little more than 6% of monthly electricity bills. In addition, he said, solar projects have limited cost increases in larger components of electricity costs, such as supply that accounts for the kilowatt-hour rate and the amount of electricity a customer uses.
"I'm curious why we would prioritize the smallest component that actually has an impact on reducing the big components as opposed to looking at the big components," Runte said.
The Governor's Energy Office opposes repeal legislation, telling lawmakers that net energy billing has stimulated solar power development, increased renewable energy in Maine and has contributed to the state's emissions reduction goals.
Caroline Colan, legislative liaison for the Governor's Energy Office, said rate design is complicated and has resulted in sharp increases for some large commercial customers and lower monthly bill reductions for others. The programs have spurred the launch of Maine's solar industry and "revitalized other important clean energy sources, including small hydroelectric dams" that also participate in net energy billing, she said.
Sen. Matthew Harrington of York, the committee's ranking Senate Republican, said in an interview Monday it's unlikely minority Republicans will have the votes to repeal net energy billing.
"Ultimately, I'm personally looking at all of these as some sort of compromise with Democrats about net energy billing," he said. "I'd probably support all-out repeal, but I'm not realistic in this climate. I'm not very optimistic that any of the bills will get across the finish line."
Hydropower and nuclear energy are more reliable than wind and solar power that depend on the atmosphere and sunlight, Harrington said.
"These intermittent (sources) like solar and wind have a place in the renewable portfolio," he said. "I don't think we should be hitching our cart to those sources of energy."
Tony Buxton, a lawyer who represents large industrial users of electricity, told lawmakers that businesses do not expect the Legislature to repeal net energy billing. He and the Office of the Public Advocate; Competitive Energy Services, a Portland consulting firm; and several hydro, wind and other generators, asked the Public Utilities Commission in January to approve a settlement that would reallocate costs across various customer classes.
The settlement "could do much more to mitigate the injustices and inefficiencies of net energy billing than you are likely to be able to do in this legislative session," he said.
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