Power to the People is a column by D. Maurice Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere. It is co-published by Manchester Ink Link and InDepthNH.org.
D. Maurice Kreis, Power to the People
What is the secret to effective ratepayer advocacy in New Hampshire?
My answer has not changed from the one I gave at a speaking engagement a few months ago in Dover: Avoid any discussion of net metering.
That has become more difficult since April 14, when the Concord-based New England Ratepayers Association (NERA) filed a petition with the Federal Energy Regulatory Commission (FERC). NERA asks FERC to declare essentially every net metering program in the country, including New Hampshire’s, to be in violation of federal law.
The small state agency that I lead – the Office of the Consumer Advocate (OCA) – is tasked by statute with representing the interests of New Hampshire’s residential utility customers. NERA is a private organization which, to the annoyance of many, has steadfastly refused to disclose the sources of its funding or the roster of its members.
I don’t care who is bankrolling NERA. When our interests align, we work with them.
That’s happened twice on my watch. Last year, we supported a similar effort by NERA to get FERC to declare a state-ordered subsidy for New Hampshire’s biomass-powered electricity generators to be in violation of federal law. NERA succeeded, and rightly so.
Back in 2017, we worked in coalition with NERA, and the state’s electric utilities, on a compromise net metering plan. Our proposal was an alternative to one advanced by a rival coalition of solar power developers and environmentally oriented nonprofits. Ultimately the Public Utilities Commission split the difference. The result was a fair deal for folks who net meter.
Given our history of working with NERA, my phone has been ringing off the hook in recent weeks.
Some callers have wanted insight about NERA and its executive director, the affable former ice cream entrepreneur Marc Brown (who used to own Memories Ice Cream in Kingston). Most have wanted the OCA to intervene formally in the FERC proceeding to oppose the NERA petition. They hoped to be able to argue that the real and legitimate ratepayer advocate in New Hampshire does not think net metering violates federal law.
We do not want be sucked into this vortex.
For one thing, net metering is not a big deal in New Hampshire, at least in relative terms. The regional grid operator ISO New England expects New Hampshire’s behind-the-meter solar panel capacity to reach 112 megawatts this year. That’s less than five percent of the net metering capacity for the entire New England region.
Yes, net metering has a cool, grassroots vibe to it. What’s not to like about a public policy initiative that began in the 70s when a mischievous engineer wired up some solar panels to his building’s utility hook-up in Massachusetts to see if the meter would spin backwards if he fed some of the solar power he was producing back into the grid?
But NERA raises a legitimate question about net metering. When you make electricity using the solar panels on your roof or backyard, feed the excess back into the grid, and get paid for it via credit on your bill, you’re producing wholesale electricity.
It’s not illegal to sell electricity at wholesale from home. Making renewable energy on your roof and selling the surplus to your neighbors through your utility is Yankee ingenuity at its best.
But under the Federal Power Act it is the job of FERC, and not the states, to determine the price of wholesale electricity. Moreover, the slice of the Federal Power Act known as the PURPA (the Public Utility Regulatory Policies Act of 1978) says the price paid to small-scale generators cannot exceed the so-called “avoided cost” — what it would have cost your utility to make or buy the power itself.
Here in New England, where we have an open market in wholesale electricity overseen by ISO New England, the prevailing market price is what determines avoided cost for purposes of PURPA. Market prices have been very low recently, sometimes even below zero. New Hampshire’s net metering rates as set by the PUC, though below the full retail rate you would get by simply spinning the meter backwards, are still well in excess of the prevailing wholesale market price.
FERC jiggered around this problem back in 2001 and again in 2009 by ruling that if the power exported to the grid is less than the power imported from the grid over the course of a month, the net effect (pun intended) is no wholesale sales. According to NERA, that legal theory is no longer viable in light of a 2012 decision of the federal appeals court with jurisdiction over FERC.
If so, the cynics ask, why did NERA wait for eight years to make that argument?
Spoiler alert: It’s not timed to coincide with the pandemic, the better to wreak havoc on the renewable energy industry, as some have speculated. Rather, on March 12, 2020, the Senate confirmed James Danly as a member of the FERC, giving appointees of President Trump a majority on the Commission for the first time.
Intervenors, including my counterparts in Connecticut, Maine, and Massachusetts, are popping up by the dozen to oppose the NERA petition. Ari Peskoe, who leads the Electricity Law Initiative at Harvard Law School, has been tweeting an interesting legal theory – that any federal regulation of net metering is unconstitutional because net metering is not interstate commerce.
Peskoe’s argument would have been of keen interest to Roscoe Filburn. He was the Ohio farmer who famously lost a U.S. Supreme Court appeal in 1942. Filburn was growing wheat for use by his animals, in violation of federally imposed production limits. The high court decided that growing wheat for use on your own farm is interstate commerce and is thus permissible for Congress to regulate.
Lawyers love that kind of stuff, and I’m definitely a lawyer. But I’m a lawyer with more urgent business here in New Hampshire.
As with every fight over net metering, this is really a struggle between the solar industry and those who think solar panels are unfairly subsidized. Maybe this is the one that makes it to the U.S. Supreme Court. If so, I’ll be there – in the audience.