Connecticut Dismantles Net Metering
Both the Connecticut House and Senate have voted to pass S.B. 9, a bill that would roll back the state’s net energy metering program, much to the relief of ratepayers across the state who have been saddled with increasing energy costs to support Connecticut’s government-favored solar industry. While the legislation expanded the state’s Renewable Portfolio Standard to a 40 percent mandate by 2030, it also included provisions that significantly reduced the negative impacts of net metering by eliminating the system and supplanting it with what is known as a “buy-all-sell-all” incentive that would require a solar owner to sell his or her power to the grid at a new rate to be determined by the Public Utilities Regulatory Authority for a 20-year period. The user would have to buy back all the power they use at a retail rate. The buy-all-sell-all design separates consumption from production, which helps address the cost shift associated with net metering.
As FBAE has argued before, net metering unfairly shifts the costs of maintaining the grid and transmitting electricity onto non-solar customers, many of whom are family businesses. As solar panels proliferate, the fixed costs of the power grid must be shared over a smaller number of users. Utilities are now paying premium retail rates for the ever-expanding net-metered solar being generated in Connecticut, and they are not seeing the reduction in capacity, transmission and regional grid costs. As a result, non-solar ratepayers have been feeling upward rate pressure. Last year, Connecticut’s standard generation service rates increased twelve percent. Eversource and UI’s generation rate for residential customers increased by nearly twenty percent. These increases translate to sizable added monthly costs for businesses across the state. Net metering aggravates the problem by saddling ratepayers with ever-increasing prices. For small businesses with tight margins, every dollar counts. Rate increases exacerbated by cost-shifting add another obstacle for “mom and pop” family businesses trying to survive in the state that the Tax Foundation ranks 44th in the country for their business tax climate. FBAE applauds the Connecticut House and Senate for working to make the user/producer system more fair and friendly to family businesses across the Constitution State.