SB333 Net Metering, Whats In Your Wallet?

by Harold Turner, PE
Net metering is the process by which small power producers, such as homeowners and
businesses, install their own technology (like solar panels) to produce electricity and
send what power they dont use back to their utility. In the utility industry, it is part of
what is called DISTRIBUTED ENERGY RESOURCES (DER) when those small power
projects are added to our grid.
Net metering allows customers to receive credits for any electricity that they generate,
but do not immediately use. Some customers get involved in net metering because of
an interest in the environment and renewable energy, but the vast majorities do it to
save money. A recently published National Survey of customers, utility executives and
regulators, performed by West Monroe Partners, showed that: 71% of customers
adopt renewable energy sources (through net metering) to lower their utility bill .
17% claim they invested in renewable energy generation in response to environmental
concerns.
First and foremost, the rapid growth in Solar PV is driven by customers wanting to lower
energy bills, not trying to save the planet. The West Monroe survey makes that very
clear. Unfortunately, too much public policy around energy is driven by misinformation
by both political parties.
It also doesnt serve the ratepayers interest if the media takes public positions against
Net Metering without digging down into the weeds to understand it better. Recent
written opinions such as The current net metering program .forces utilities to buy
high cost electricity, often when demand is low and Eliminating the cap without
lowering rates would be a boondoggle, forcing most ratepayers to foot the bill for those
who can afford to build solar simply are unfounded. Thats a debate Im willing to
have with anyone who wants to get into the data.
It also doesnt serve ratepayers, especially commercial ratepayers, when some
business associations advocate for wholesale rates for all sizes of net metering
installations. Currently wholesale rates only apply to projects sized between 100kW and
1000kW (1MW). Projects sized less than 100kW encompass all residential and most
commercial installations.
Legislators, especially my longtime Republican friends (I am a Republican), have to
stop drinking the utility company Kool-Aid, get informed, and understand that the single
most useful thing they can do for their rate paying constituents is to continue to give
them access to self- generation through net metering. The current SB333 legislation
will affect them for years to come, and it needs their help to improve the bill and raise
the cap higher than the paltry 75MW proposed, which is only about 2% of peak load.

Nearly half the states in the country have ongoing regulatory and/or legislatives efforts
underway regarding Distributed Energy Resources. This is not just a New Hampshire
issue. New Hampshire simply has been behind the curve compared to most of these
states for many reasons (too long for this article), but the current combined economics
of our high energy rates, greater competition from solar provider companies, and
dramatically lower costs of equipment are finally advancing Net Metering in NH to
create more Distributed Energy Resources.
Compared to most other states, New Hampshire still has a very low Net Metering
system cap of 50MW that was set in statute almost 20 years ago, and that cap limit is
finally being reached now in 2016. The real debate is how high the cap should be
raised, and should the current rate structure for projects less than 100kW be changed
so that customers who do self- generate receive a lower offset on their electric bill than
exists today (for the power they send into the grid). Currently, self-generators <100kW
receive an equal 1.00 kwh credit on their bill (not a payment) for every 1.00 kwh they
put into the grid. Thats really why its called net metering.
If your site generates less that 100kW under current NH law, your meter tracks and nets
out what you produced from the total of what your building actually consumed during the
month .. and then you simply pay for the net number of kwh on the meter at the full
retail rate. Most residential projects are sized less than 10kW. If your net is negative for
the month, the kwh credit rolls over into the next month. Once a year, after net
operating for 12 months, your utility gives you the option (only if your current credits
exceed 600kwh) to receive a check instead, at the wholesale (energy only) value of
electricity which is about 40% of the retail value. All installations above 100kW are
credited at just the wholesale energy rate.
New Hampshires current cap of 50MW is approximately 1.5% of the systems peak
load. Vermonts current cap is 15% of peak load (10 times higher). Massachusetts
current cap is 9%, plus all their small projects (less than 25kw) are excluded from the
cap, which virtually excludes all residential sized projects, plus all projects pre-dating
2013 are also excluded as well effectively making the cap much higher than 9%.
The Monroe report said that 49% of utility leaders feel DERs will reach a significant
tipping point impacting operations when they account for 11 to 25 percent of their
system generation which means that New Hampshires current 1.5% cap doesnt
even begin to warrant any changes to the current formula, ...other than to simply raise
the cap much higher. Additionally, only about 1% has actually been installed so far. The
current version of SB333 only raises the cap to 2%.
The costs of solar PV has been the biggest driver as Ninety percent of customers
that have adopted renewable energy sources in their homes use solar systems,
followed by wind turbines (7%) and hydropower systems (3%). In 2015 alone, 51

Gigawatts (GW) or 51,000,000 kW, of solar capacity was installed around the world, of
which 9.8 GW was in the US, a 56% increase.
If New Hampshire legislators fail to raise the cap quickly, and high enough to sustain
growth, there are three likely consequences:
1) The businesses, and their employees, who are currently providing Net Metering

energy installations in the state will need to go work in other states to survive.
2) All customer classes will be denied the ability to undertake self-generation

installations on their property to reduce their electrical energy bills by getting

some credit for their power that flows onto the grid at any time of day. Their only
other option would be to go completely off grid and store their own power in
batteries. Most people want to be connected to the grid.
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3) Industrial class customers, who currently have the 5 highest ranked rates in the

country, would have one less option to help lower costs in order to stay in NH.
Utility company executives argue that the money they dont collect from self-generators
must be collected from the non-generators to help pay for all their costs, excluding just
the cost of the energy (juice) itself which you can now buy from other sellers. That is
their cross-subsidy message that gets repeated everywhere they go. Of course they
dont want to talk about the true value of peak power period savings, renewable portfolio
requirements savings, distribution grid savings, transmission wire savings, and line loss
savings that are attributable to Distributed Energy Resources. They mostly want to talk
about new pipelines and natural gas fired generating projects, and new transmission
lines from Canada. I think all of you electricity consumers can figure that game out,
right? They have produced no New Hampshire data regarding this claim at the hearings
and the best they could do is to state that the Eversource net metering program in
Massachusetts has resulted in a of 1% cross subsidy cost to the non-generators.
This is a lame excuse for telling us we should drag our feet on raising the net metering
cap in New Hampshire, and restructure the rates now when self-generators are only 1%
of actual peak load.
New Hampshire currently has the 6th highest residential rates, the 8th highest
commercial rates, and the 5th highest industrial rates in the country. Here are three
ways to immediately help mitigate the impact of high rates to our large manufacturers
who now currently suffer to compete when saddled with the 5th highest rates (77%
above average) in the country, all three of which our legislature can do. Why?
because we still need large manufacturing jobs in New Hampshire, in fact we need
more:

1) Raise the project size limit under net metering from 1MW to 5MW and increase
the cap even further. This would immediately enable existing small QF
generators, which already reside in New Hampshire, to redirect their power sales
from going out to ISO-NE to staying inside to help New Hampshires big
energy consumers with lower rates. Win-Win.
2) Re-clarify/re-authorize the rights of <5MW QF generators in the state to wheel
power across utility distribution lines to a maximum of 3 retails customers under
the existing 1978 NH LEEPA law. Win-Win.
3) Pass a special tax package or modify/clarify the existing R&D tax credit for NH
Industrial Rate customers to allow them to invest in their own self-generation
projects, the same type of projects that currently qualify under Net Metering. Use
a defined period up to 5 years or more for those companies to take the tax credit
against their BPT/BET obligations .and help them stay in New Hampshire to
grow more jobs. Win-Win.

Other than politics, and the never ending efforts from our regulated investor owned
utilities (monopolies) to protect their stockholders at any cost to our ratepayers, there
are no good reasons for slowing down or stopping the growth of the 20,000 or so jobs
than now exist in New Hampshire that are associated with the Clean Tech industry.
Ratepayers/voters deserve the representatives they elect to serve in office. Props to
Sen. Sanborn for trying to improve SB333 in committee! Isnt it about time you let them
all know that the current version of SB333, which only raises the limit to a paltry 75MW
and seeks to lower the credits to your electric bill from your self- generation, doesnt
serve your interests? If it doesnt serve your interests, then whose interests does it
serve? Want to guess?

Harold Turner is an engineer and small business owner in Concord. In addition to his 30 years
of small business advocacy at the State and US Chamber levels, he also chairs the board of the
New Hampshire Center for Economic Policy, and is a member of the NH CleanTech Council
Advisory Board.