Committee backs clean energy credit reform estimated to produce $67M yearly in ratepayer savings
Natural gas meter. (Photo by Bill Oxford/ Getty Images)
The legislative committee tasked with wading through the many proposals brought forward this session to address the problems with the state's clean energy credit program is advancing a bill that critics say doesn't go far enough.
On Thursday night, the Maine Legislature's Energy, Utilities and Technology Committee voted along party lines with the majority in favor of an amended version of LD 1777. The bill Democrats advanced to the full Legislature asks the Governor's Energy Office to develop a successor program for front-of-the-meter net energy billing projects sometime next year. The Public Utilities Commission would need to approve the plan, but only if the benefits to ratepayers outweighs the costs.
Net energy billing is a utility program designed to encourage customers to install or participate in small-scale renewable energy projects like solar panels by offering credits to offset their electricity bills. It was expanded in 2019 so customers can use renewable energy generators located outside of their property but within the same utility service territory, such as a community solar project.
Front-of-the-meter projects include community solar projects and those included in the state's current tariff rate program, which is used by nonresidential customers. If LD 1777 is enacted, front-of-the-meter projects would no longer be eligible to participate in net energy billing once the successor program is in place.
'I hope that it will lead to the survival in a sustainable way and, perhaps, in a more economically just way for this really important set of programs and for the value that it has produced, as it certainly has,' said Rep. Sophie Warren (D-Scarborough), the bill's sponsor.
While the committee rejected other proposals, including those to repeal net energy billing entirely, it carried over some legislation such as LD 1936 that could serve as vehicles for further tweaks to the program in the next legislative session.
As LD 1777 advances to the full Maine House of Representatives and Senate, proponents of solar energy fear these changes could harm the future of the industry.
During the committee discussion Thursday, Public Advocate Heather Sanborn said if passed the annual savings for ratepayers statewide over the next 16 years are estimated to be an average of $47 million from proposed changes to the tariff rate program and $20 million from changes to the kilowatt hour program.
Currently, the kilowatt hour program is open to all customers and provides kilowatt hour credits on participating customers' bills if they install renewable energy generators such as solar panels or join a community solar project, where customers receive a portion of a solar farm's credits. The credits expire after 12 months. This program, in particular, has come under fire for providing generous incentives to solar farm developers that utility customers are helping pay for.
LD 1777 creates a monthly charge for kilowatt hour projects starting January 2026 to offset the associated costs currently passed on to ratepayers.
There are 1,000 kilowatts in a megawatt and most community solar projects run between one and five megawatts. As of May 20, Maine has 300 community solar projects with a total capacity of just over 1,000 megawatts, according to the Governor's Energy Office's solar dashboard.
The proposal outlines a charge of $4.10 per kilowatt of capacity for projects between three and five megawatts and $1.20 per kilowatt of capacity for projects between one and three megawatts. However, Warren said those may be adjusted to whatever number is necessary to achieve $20 million in ratepayer savings in the first year.
The tariff rate program for nonresidential customers provides dollar credits for those who use their own projects or share in someone else's. The Public Utilities Commission sets an annual rate for the credits, which also expire after 12 months, depending on the customer's size and utility provider.
However, Warren's legislation establishes new, tiered tariff rates for certain projects starting January 2026. The new rates would vary depending on the project's capacity.
Republicans on the energy committee opposed the bill, with multiple of them saying it doesn't go far enough to fix the problems net energy billing has created in the state.
Sen. Nicole Grohoski (D-Hancock) agreed, but voted in favor because 'doing nothing would be completely irresponsible,' she said. However, she said that if more needs to be done to modify net energy billing in the future to support Maine people who are struggling to keep up with electricity bills, she vowed to 'be loud' about it — whether she's still in office or not.
Similarly, Rep. Chris Kessler (D-South Portland) said he was voting in favor 'with a heavy heart.'
Admitting it may make him a 'unicorn,' committee co-chair Sen. Mark Lawrence (D-York) said he has been pleased with net energy billing.
Though she was disappointed the committee couldn't come to a unanimous vote, Rep. Valli Geiger (D-Rockland) said her fear would be that the legislation goes too far in potentially deterring solar. She said climate change is an existential threat and renewable energy is the only path forward.
Maine's clean energy sector has admitted net energy billing can be improved, but has cautioned lawmakers against retroactive changes to the program that could undermine investor confidence. Many of them were disappointed in the committee's decision to advance LD 1777, which they feel includes 'drastic' concessions for the solar industry, according to a news release after the vote.
'The Legislature today chose to both harm participants retroactively and threaten the future of the industry,' said Eliza Donoghue, executive director of the Maine Renewable Energy Association. 'While the program can certainly be improved, it should not occur at the expense of the people and businesses that invested in good faith for our clean energy future.'
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