In net metering case, New Hampshire regulators focus on costs while ignoring benefits, advocates say

Solar customers and clean energy advocates are waiting to see if New Hampshire will continue its system for compensating customers who share excess power on the grid. 

State regulators at a recent hearing seemed unconvinced about the policy’s benefits, despite support from utilities, customers, and hundreds of residents who submitted public comments on a proposed extension. 

“This commission is highly skeptical of anything involving energy efficiency or clean energy, and focused almost solely on cost,” said Nick Krakoff, senior attorney for the Conservation Law Foundation in New Hampshire. 

These compensation plans, generally referred to as net metering, are widely considered one of the most effective policies for encouraging more solar adoption. Recently, however, several states have changed or considered changing their programs, as utilities object that the policies are too costly and some politicians and policy-makers push for more purely market-based approaches. 

New Hampshire’s net metering rules haven’t been modified since they were established in 2017. The state’s public utilities commission opened a case to consider the question of whether and how to adjust the rules in September 2022. A year into the proceedings, the state’s major electric utilities — Eversource, Liberty Utilities, and Unitil — came out in support of continuing the existing system of net metering, despite the tendency of utilities nationwide to consistently push for lower net metering rates. The move was a welcome surprise for environmental advocates. 

“If you don’t have a compensation rate that’s high enough, you’re not going to have customers that are going to want to invest in solar panels or other renewable energy,” Krakoff said.

Striking an agreement

In early August, a diverse coalition including the utilities, the Conservation Law Foundation, Clean Energy New Hampshire, Granite State Hydropower Association, Standard Power of America, and Walmart reached a settlement agreement about the future of the policy. 

The agreement calls for the state to keep the current net metering structure in place for two years; at the end of two years, utilities would propose time-of-use rates for net metering, so the compensation rate more closely matches the real-time value of the power being sent into the grid. Also, any projects that join the net metering program during those two years will receive the same compensation for 20 years before transitioning into whatever new system is created by then (currently the compensation ends in 2040). 

An influx of public comments has also reflected wide support for the tenets of the agreement. Nearly 450 comments were submitted since the beginning of the year, more than Sam Evans-Brown, executive director of Clean Energy New Hampshire, has ever seen in a public utilities case, he said. The vast majority urge the commission to maintain the current net metering system. 

Peterborough resident Brian Stiefel was among those who filed comments. He and his wife installed 37 solar panels on their home in 2021, at a cost of $51,000. Though the solar doesn’t fully cover their electric bills, it provides $2,000 to $3,000 in savings per year, in large part due to net metering. 

“A big part of the decision to do this was the fact that the state would approve us for net metering,” Stiefel said in an interview. “If that’s going to change it could have a significant financial impact on everybody who has panels and is set up with net metering.”

An uncertain path forward

However, clean energy advocates say they have seen some signs in recent months that the commission might not be paying much attention to the benefits the system creates, while seeking out evidence that net metering creates a cost burden for consumers who aren’t part of the program. 

“The concern is that the chair is looking for a cost shift and is going to do whatever it takes to find one,” Evans-Brown said. 

Last spring, the commissioner requested a series of records in the case, several focused on gathering information about other states’ net metering programs — information that did not seem relevant to the decisions needed in New Hampshire, Evans-Brown said. The commission also requested, in a different docket, information about stranded cost recovery, which it then placed into the record on the net metering case as well, a move energy advocates interpreted as an attempt to focus on costs to the exclusion of benefits.

Then, in hearings on August 20 and 22, the commissioners asked questions that seemed focused on finding costs being passed on to consumers, even though there is simply no such evidence on the record, Krakoff said.

Advocates’ concerns are magnified by the commission’s history: In 2021, the commission drastically reduced funding for the state’s energy efficiency rebate and incentives. Though the utilities, consumer advocates, and environmental groups had come to an agreement to raise funding for the programs, the commission claimed that the program would burden consumers and that the state should focus on promoting market-based energy efficiency services. 

Current commission chair Daniel Goldner was one of the commissioners who signed the energy efficiency decision. During his confirmation hearing earlier that year, Goldner expressed skepticism about climate science, and advocates raised concerns about his lack of experience in the energy field.

“They expressed strong skepticism of energy efficiency and actually gutted the program,” Krakoff said, comparing that case to the present-day net metering proceedings. “It’s very concerning.”

Now advocates, homeowners, and other stakeholders can only wait to see what the commission decides and when they decide it. An order could come by the end of the year, said Evans-Brown, or the commissioners could decide to push the matter well into the new year — there are no deadlines set on the process. 

Should the commission in some way reject the settlement, there is still hope the legislature would take action to protect net metering. As part of the proceeding, state Sens. Kevin Avard, Howard Pearl, and David Watters submitted a letter explaining their belief that reducing net metering compensation would be against the goals of the legislature. 

“It is the intent of the legislature to preserve a viable net metering program in the state of New Hampshire, and we will take action to do so if necessary,” they wrote.

Resolving the question through legislative action, however, would leave the matter open and undecided for even longer, making it harder to encourage solar development in the state, advocates noted. 

“We were expecting this to be a challenging docket when this was first announced,” Evans-Brown said. “It’s frustrating, but not surprising.”