Monthly bills for Central Maine Power Co. customers will go up by another $5 after state regulators on Tuesday approved the utility’s second rate increase in a week.

The rate hike is to cover a nearly 50% increase in the amount the utility pays solar developers. State law incentivizes utilities to subsidize certain solar projects to further Maine’s climate goals and reduce greenhouse gas emissions.

The higher rates, which take effect July 1 and extend through June of next year, follow a roughly $10-a-month increase that the Maine Public Utilities Commission authorized last Tuesday. That rate hike was to reimburse CMP for $220 million it spent to restore power after destructive storms last year and in 2022.

More increases could be authorized later this month, though they would have a much smaller impact on ratepayers’ monthly bills if approved.

This week’s rate increase allows CMP to bring in $179.3 million over the next year to pay solar developers. That is a 47% increase from the $91.1 million the utility now collects from ratepayers.

The difference this time is the billed amount is a pass-through payment to solar developers in what’s known as net energy billing. The rate recovery program is a feature of state law and minority Republicans in the Legislature blamed Democrats for the higher electricity costs. At a State House news conference, Senate Minority Leader Trey Stewart, of Aroostook, said Democrats sent “hundreds of millions of dollars to out-of-state and out-of-country solar developers.”

“Your bill is going to go up,” he said. “And when it does, if you’re represented by a Democrat in the Legislature, send them a thank-you note. It’s their fault.”

Republicans have unsuccessfully tried to make the policy “much more reasonable, much more market-based instead of five, six times what the going rate is … ” Stewart said. “There’s no reason to continue this incentive.”

Before 2019, eligibility for net energy billing was restricted to very small generators due to opposition from then-Gov. Paul LePage and many Republican lawmakers. Democrats and Gov. Janet Mills changed the rules in 2019, directing utilities to buy power from solar projects with up to 5 megawatts of capacity at fixed rates.

The changes led to growth in community solar projects, but also sparked complaints about rising costs. Legislation last year reduced the size of projects eligible for net billing to 1 to 2 MW of capacity from 5 MW.

Rep. Gerry Runte, D-York, a member of the Legislature’s Energy, Utilities and Technology Committee, said in an interview that he does not believe lawmakers will change the net billing program again when they return to Augusta next year. “You can’t have a market if every Legislature overrules itself,” he said.

He cited an April 1 cost-benefit analysis of Maine’s solar program that calculated expenses in 2023 for solar projects of about $104 million and benefits that were nearly $142 million. Benefits, Runte said, include solar power displacing natural gas, an expensive source of energy, and wire improvements paid for by solar developers.

“The benefits are real and genuine,” he said. “They’re not seen.”

Sen. Mark Lawrence, D-York, chair of the Energy, Utilities and Technology Committee, said the Legislature and Gov. Janet Mills this year enacted legislation that requires the PUC to include benefits of net energy billing in setting rates. “There will always be costs, but the legislation factors in benefits in rate setting,” he said.

Manufacturers, energy developers and the Maine Renewable Energy Association filed comments opposing the new rate. The renewable energy group said regulators have not established an efficient process for arriving at an “equitable rate design consistent with state law.” It said the state Office of Public Advocate and Efficiency Maine Trust, which administers state energy efficiency programs, are the only ones that support the PUC’s decision.

“All other parties remain opposed for reasons of basic fairness and statutory interpretation or declined to join the (decision),” the Maine Renewable Energy Association said.

Commissioner Patrick Scully said support for the decision by CMP, the Office of Public Advocate and Efficiency Maine “reflects a sufficiently broad spectrum of interest such that there is not an appearance or reality of disenfranchisement.”

Objections also were raised by renewable energy companies. Brookfield White Pine Hydro LLC and Rumford Falls Hydro LLC said PUC approval of the new rate “will only exacerbate the already seriously adverse, inequitable, unjust and unreasonable rate shock being experienced by Brookfield and similarly situated ratepayers.”

The Industrial Energy Consumer Group, which represents manufacturers and other large users of electricity, said the rate approved in June 2023 to collect revenue for renewable energy “continues as a matter of law” and is “just and reasonable.”

Any rate change can only be made following a formal rate design proceeding, the IECG said.

Scully and PUC Chairman Philip Bartlett said delaying a decision would push millions of dollars in current costs into the future, exposing ratepayers to even higher costs.

The Office of Public Advocate said that because regulators are following state law, denying recovery of the costs “would, in most circumstances, constitute an unconstitutional confiscation.”

The IECG responded by saying regulators and the Public Advocate “seem to be more concerned about hypothetical harm” to the utilities “than to more than $300 million” in net energy billing costs ratepayers.

The PUC soon will open a proceeding to evaluate the April 1 cost-benefit analysis of Maine’s 2023 solar energy market. In addition to examining net energy billing, the review will consider if the PUC may consider whether utilities can make money from solar programs that can offset costs, Scully said.

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