With proposed change in cost-shifting definition, NH House Republicans seek to further limit net metering

Proposal would ‘tie the hands’ of Public Utilities Commission. critics argue

A last-minute change in an amendment’s wording about cost-shifting at the behest of the Republican leadership is an attempt to “tie the hands” of the Public Utilities Commission in setting net metering rates, House Democrats claim.

At issue is how much utilities should pay for customers who generate more energy than they use though renewable energy.

The change “will make it impossible for the PUC to set a net metering rate in the future,” said Rep. Lee Oxenham, D-Plainfield.

The PUC set the current rates after ruling that there was no significant cost-shifting, but agreed to do some further study into complex issues, from calculating the costs to the grid of multiple and variable power sources to the savings on transmission, distribution and energy production.

While renewable energy advocates await the outcome of the study and the PUC decision, utilities and some business groups and Republicans in the Legislature have argued that cost-shifting is taking place, and it will be significant if the net metering cap is increased from 1 megawatt to 5 megawatts. As a result, legislation that allowed the expansion has faltered, though there is a chance for a compromise pass that would apply only to governmental subdivisions.

‘Came out of nowhere’

Until now, the standard on setting net metering rates has been that the PUC must find “evidence of unjust and unreasonable cost-shifting”

But tucked into an amendment to Senate Bill 91, an omnibus energy bill, is a provision that would change that standard “to ensure that except for minimal allowances for metering and billing, other customers do not shift costs to customer generators and customer generators do not shift costs to other customers.”

The language, “came out of nowhere,” said Rep. Kat McGhee, D-Hollis, adding that it was not in any public hearing or discussed amount the committee.

Actually, said House Science Technology and Energy Committee Chair Michael Vose, R-Epping, it did come from somewhere: the Republican caucus, and it clarifies “our position on cost-shifting. Unreasonable cost-shifting could be read that there is reasonable cost-shifting.”

“This is completely new standard,” shot back Oxenham. “Cost-shifting happens all the time.” It can be as little as one neighbor going away for the weekend to the cost of urban dwellers who pay for rural electrification, she said. “It can’t be perfect. If something is one percent of a kilowatt it is in violation. The PUC’s hands will be tied.”

“It’s imposed from ideology,” said McGhee. “It almost as if the PUC needs to be policed, which they don’t. There is no evidence the agency is doing something incorrectly.”

But Vose defended the wording change, saying that advocates who claim there is no cost-shifting have nothing to worry about.  “If you are right, it should have no effect,” Vose said.

The committee recommended the amendment 12-8 mostly along party lines. If it passes the House, Vose said he was assured that the Senate would agree to the changes, which would mean the bill would go to Gov. Chris Sununu for his signature.

The change was “definitely a surprise to Madeleine Mineau, executive director of Clean Energy NH. She said it would make things more difficult for the PUC to come up with a new rate.

The issue spilled over a bit in a question during a presentation by state Budget Director Matthew Mailloux about the proposed Department of Energy included in House Bill 2, the trailer bill to the budget.

The DOE would incorporate the PUC, which would retain its judicial function but give up its administrative functions. While it would be able to keep some staff to help advise it on issues, as well as its legal counsel, other DOE staff would argue a position.

When it comes to the three-year-old net marketing docket, the DOE would take over the contract of a recently hired consultant to conduct the study. Mineau was hoping that reorganization would speed up the process in the future. On the other hand, the DOE would oversee the study, as well as take a side on what the PUC should do.

Oxenham said she worried that if the governor wanted a particular position, there might be some “editing” about what the DOE could say or present to the PUC.

Mailloux said that there would be no editing and instead there would be a “bright red line” between the DOE’s advisory and the PUC’s adjudicative roll.

“At the end of the day, it would be the PUC’s decision,” said Mailloux.