CT Governor’s Legislation: Detrimental Or Helpful To Solar?

Editor’s note: This article was updated on March 20 to include testimonies on S.B.9.

Gov. Dannel P. Malloy, D-Conn., and Rob Klee, commissioner of Connecticut’s Department of Energy and Environmental Protection (DEEP), are advocating for the passage of the Malloy administration’s environmental protection and resiliency bill, as well as the governor’s energy bill, both of which have received public hearings in recent weeks. However, given the energy bill’s effects on the state’s net energy metering (NEM) policy, the legislation could actually hurt Connecticut’s solar industry, according to a solar business group.

Taken together, according to a press release from the Malloy administration, the two bills would represent a major step in Connecticut’s efforts to reduce greenhouse-gas (GHG) emissions, increase accessibility of residential rooftop solar, and combat the effects of climate change.

However, speaking out against one of the bills, Mike Trahan, executive director of Solar Connecticut, a group that connects homeowners and businesses with solar installers in Connecticut, says the energy bill, S.B.9 – An Act Concerning Connecticut’s Energy Future, would be detrimental to the industry.

According to Trahan, the legislation poses several problems:

  • In a “buy-all, sell-all” arrangement, the bill “forces solar users to sell all generation back to the utility at sub-retail rates, meaning solar users cannot use their generation on-site to offset load and reduce their energy costs.”
  • The bill “allows the electric utility behind-the-meter to control solar technology,” in turn, “violat[ing] a property owner’s right to self-generate, retain, store and consume their own generation.”
  • The bill “snuffs out” battery storage: “Who would want a battery if the state requires you to push all your generation back to the grid as a condition of staying connected to the grid?”

On the other hand, as claimed by Malloy’s press release, S.B.9 would do as follows:

  • Increase the renewable portfolio standard (RPS) to 40% by 2030.
  • Make the compensation for clean distributed generation simpler, fairer and more sustainable by doing as follows:
    -Simplifying the current net metering/virtual net metering structures through the introduction of one competitive auction process resulting in a long-term contract for winning bids.
    -Establishing a fixed rate for residential programs (i.e., rooftop solar) through a Public Utilities Regulatory Authority rate setting process that ensures that developers cover their costs and earn a fair rate of return.
    -Most significantly, this proposal would increase the megawatts deployed of renewable energy at a savings of over $1 billion in ratepayer dollars over 20 years compared with the continuation of current programs.
  • Establish a procurement process for energy efficiency as a resource and set a minimum efficiency target based on current investment levels in order to mitigate the impact of the 2017 energy efficiency fund sweeps.
  • Fortify the CT Green Bank in the marketplace. With a leverage rate of 8:1, this legislation would allow the CT Green Bank to establish a sufficient portfolio to become a self-sustaining enterprise by 2025, reducing the need for future ratepayer support while continuing to be an economic engine for Connecticut.

In regard to changing the state’s NEM policy, Trahan recently argued – in a testimony before the Connecticut General Assembly’s Energy and Technology Committee – that there is currently no need for a change.

Trahan said research conducted by the DEEP “leans heavily on the cost-shift argument to make the case that a successor to net energy metering is ‘urgently needed.'”

“Our view is that transitioning away from NEM will be necessary at some point to ensure fairness in electricity costs across all ratepayers,” he said. “Although, numerous studies, including a report from U.S. Department of Energy researchers, clearly show that the small amount of solar installed in states like Connecticut does not merit a policy change at this time. There is no analysis showing how much Connecticut ratepayers not using solar are impacted by ratepayers that do. None.”

He added, “Given that the U.S. DOE research finds rooftop solar penetration levels remain so low that the cost-shift issue is of little significance outside a few states, the fact that an overwhelming number of Americans support NEM, and the absence of data collected in Connecticut demonstrating need to upset the current NEM system, we see no basis for abandoning Connecticut’s NEM policy in favor of an untested new tariff, as DEEP proposes.”

On the other side, the Connecticut Council of Small Towns (COST), citing the success of net metering, testified in favor of the bill.

“Virtual net metering has been a successful program in assisting municipalities in reducing costs and improving energy efficiency,” said Kathryn Dube, membership and legislative services director of COST. “Given the importance of this program in improving energy efficiency and helping the state meet its renewable energy goals, expanding opportunities for VNM should be incorporated in the bill.

“Incentive programs along with alternate energy programs, such as virtual net metering, are essential to municipalities in managing electric rates. Many municipalities view VNM as a way to reduce overall costs for their residents. These opportunities will allow towns to reduce their energy costs while continuing to deliver essential programs and services,” Dube claimed.

Separately, the governor’s climate change bill focuses on the Connecticut Institute for Resilience and Climate Adaptation’s (CIRCA) recommendations that Connecticut plan for the upper range of sea level rise projections of nearly two feet by the year 2050.

According to Malloy, S.B.7 – An Act Concerning Climate Change and Resiliency, would do as follows:

  • Implement an interim target to reduce GHG emissions 45% from a 2001 baseline by 2030, as recommended by the governor’s Council on Climate Change.
  • Update current statutory references to sea level rise to reflect CIRCA’s planning recommendation of nearly two feet by 2050.
  • Require all future state projects located in the Coastal Boundary that are either undertaken by a state agency or funded by a state/federal grant or loan to meet CIRCA’s projections.
  • Update Connecticut coastal boundary maps to move the boundary landward distance represented by the approximate two feet in sea level rise.

“Climate change is real, it’s man-made, and it’s here,” Malloy says. “We see the effects everywhere: unprecedented drought and wildfires in Western states, global temperatures increasing every year, and more powerful and unpredictable storms than we have ever encountered. And sea levels are expected to rise by nearly two feet over the next 30 years, causing great harm to our coastal communities. Fairness to future generations of Connecticut residents demands that we adjust our current practices to prevent climate disaster. My administration’s two proposals do just that.”

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