Maine Supreme Court Hears Arguments In Solar Incentives Battle

Dec 14, 2017

Maine’s Supreme Judicial Court is weighing the future of incentives for residential solar power. The court heard arguments Wednesday in a challenge to state regulators’ efforts to reduce and eventually phase out those incentives.

The case for maintaining more generous incentives for solar installations was argued not by a solar operator, but by an attorney for some of the state’s largest industrial energy consumers, such as paper mills, that aren’t actually in the solar power business at all.

But because many of those companies generate their own power on site, Tony Buxton says they have a stake in preventing new rules that would allow electric utilities to value transmission charges to solar generators based in part on how much energy they create and use entirely on-site.

Buxton calls it a charge on self-generation — an exit fee — that is barred by state law.

“Even though you use the power yourself on your own property and generate it yourself. That’s the prohibited exit fee. That’s why the Legislature did away with this. That’s why industrial consumers are here today, because it is a huge change in the regulatory paradigm,” he says.

Buxton argues it’s as if an oil delivery company charged fees to a farmer who reduces her oil consumption by installing a wood-furnace and heating with fuel from her own woodlot. He provides another example.

“This is like our grocers charging us for vegetables we grow in our gardens,” he says.

“I’d just really like to go to this vegetable analogy really quickly,” says Mitchell Tannenbaum, a lawyer at the state Public Utilities Commission, which imposed the new rule.

Tannenbaum says its effect is not to charge extra for electricity generated on-site, but to reduce credits solar generators get when they put excess energy back on the grid — credits that in recent years have grown more valuable, even as the cost of installing solar infrastructure has gone down.

“You grow your own vegetables, sure. But under net billing, if you grow more vegetables than you use, you can go the grocery store and sell it back to the grocer at about twice as much as it’s worth. That’s exactly what’s going on there. And then the grocer loses revenue,” he says.

The justices peppered both sides with skeptical questions about process and policy. Several, including Chief Justice Leigh Saufley, questioned whether state regulators need to do a more rigorous analysis of the costs and benefits of keeping solar generators hooked up to the grid, and more closely tie utility fees to that analysis.

The Public Utilities Commission, meanwhile, this week delayed the effective date of its new solar rule until May 2018, giving the Supreme Judicial Court — and possibly the Legislature as well — time to act.

This story was originally published Dec. 13, 2017 at 5:29 p.m. ET.