Gov. Chris Sununu vetoed a bill to expand solar energy credits Monday, arguing it would burden electricity utilities even as advocates said it would help boost municipal and commercial solar projects.
In a letter released Monday, the governor said the law, House Bill 365, was a “regressive cost burden on citizens that benefits large-scale solar developers while hurting all ratepayers,” And he argued that the bill, which he called a subsidy, would cost “hundreds of millions of dollars” in higher electric bills.
“We should not allow our good intentions to mask a bad policy,” Sununu said.
HB 365 would seek to expand the ability for commercial and public entities to sell back renewable energy to the electric grid at market prices. Under net metering, entities that produce their own energy can “sell” unused energy back to the grid for credits on future energy bills, but they’re capped in the amount of energy they can send back.
The bill would expand that cap from one megawatt to five, dramatically increasing the size of the customer-producers that could participate in net metering. That, supporters say, could lead to cost savings for towns with hydropower facilities and make investments in large solar grids more economical for towns and businesses.
Sununu’s veto comes a year after he vetoed a similar bill. Back then, he raised the risk of cost shifting by utility companies. A utility forced to purchase energy at default rates — presently around 9 cents per kilowatt hour — but only allowed to sell it on at the wholesale rate — around three cents — could lead to losses that would result in higher bills for all ratepayers, opponents warned.
House Bill 365 sought to address that concern by mandating that utility companies use the energy acquired through net metering to offset their current load obligations. That means the extra energy would need to be factored in by the utilities when purchasing power at auction, supporters say. By using the acquired renewable energy to offset purchases at auction, utilities could purchase less energy at auction, advocates argue.
“That difference between this year’s bill and last year’s bill is that requirement of how they handle the power,” said Madeleine Mineau, executive director of Clean Energy NH, which advocated for the bill. “They have to account for the power that’s coming into their system and use the supply locally before they go out to procure power that’s going to come into their system to their customers.
The addition was hoped to assuage the governor on the cost concerns, after the House came several votes short of overriding his veto on last year’s bill. But Sununu indicated Monday that the change wasn’t enough to dislodge his concerns about price hikes overall.
The veto earned praise from the Business and Industry Association, which said the bill would still allow customers to benefit from credits at higher rates than the energy costs saved by utilities.
“To be clear, BIA does not oppose raising the cap on net metering,” President Jim Roche said in a statement. “However, we oppose HB 365 because the legislation would result in cost-shifting to the business community since the tariff (or credit) given to net metering customers would be above the utility’s avoided cost. That’s unfair to all non-net metering ratepayers.”
But supporters strongly disagreed.
“We’re very disappointed that he’s chosen to veto this bill again, considering the very strong bipartisan support and the millions and millions of dollars of investment (it would bring),” Mineau said.
Mineau disputed Sununu’s claims of hundreds of millions of dollars in additional costs to ratepayers.
“There’s not a demonstrable cost of net metering,” she said. “The Public Utilities Commission said there wasn’t. No one has been able to say that there is.”
Over the months, the proposal had attracted some support from renewable energy industries. At a press conference last week featuring businesses touting clean energy support, several business representatives praised the net metering legislation as key to unlocking new projects across the state.
Portsmouth Sen. Martha Fuller Clark argued that the net metering bill would make energy cheaper for many.
For one, she said, it would encourage more efficient energy use for those who benefit from the new energy projects. “The less energy you use, the lower your costs on your bill are going to be,” she said.
And she said that by shifting part of the energy load from traditional plant-centered energy production to user-generated renewable power, the net metering expansion would reduce transmission investments, which have contributed to higher bills.
“Despite what you may have read, this will ensure that we lower energy costs,” she said.