As the battle between utilities and distributed renewable energy wages on, Massachusetts regulators have ruled in favor of the benefits renewable energy can bring to the energy system. In a recent regulatory decision, the Massachusetts Department of Public Utilities (DPU) denied National Grid’s one-sided proposal to impose new access fees to community solar projects and add new tiered rate structures on small business customers.
The utility’s filing comes as a last-ditch effort to protect revenue streams in an outdated utility system. With rapid deployment of renewable energy preparing the way for a not-so-distant clean energy future, utility companies continue to invest in large transmission projects and discourage local distributed energy systems. To compensate their ulterior motives, National Grid’s proposal falsely claimed that distributed energy, such as wind and solar, shifts the costs to maintain the grid to other customers who are not generating their own energy to offset their consumption. Under National Grid’s request, fixed charges for small commercial customers would have increased from $10 to up to $30 per month, based on the month of highest electricity usage. The DPU denied the proposal arguing National Grid did not quantify the amount of costs attributable to distributed energy customers and has not qualified the distribution benefits associated with small renewable systems.
The decision marks a turning point in utility regulatory proceedings regarding renewable energy. Distributed energy helps reduce system costs for the grid by providing energy closer to the point of consumption and reducing demand on the grid during peak hours. Analysts from Acadia Center have found that the value of distributed solar to the grid in MA, as well as consumers connected to the grid, ranges from 22-28 cents per kWh, with additional societal values. Additionally, the DPU emphasized that electricity rates should be designed to promote energy efficiency, fairness, and performance, to reward customers who engage in energy-savings, rather than discouraging it.
The ruling comes as a long-awaited step in the right direction, as rocky “stopgap” measures to solar policy prevent market certainty for the industry. The utility premise to disproportionately charge renewable energy customers more for the electricity they draw from the grid calls attention to the priorities set by an outdated utility structure. Today’s centralized electric grid is increasingly falling behind new technological advances and consumer engagement in a local energy system. As power distributors, utilities increase profits by building an ever-larger electrical grid.
Under the current structure, utilities receive a higher return for large-scale capital projects, like large pipelines and transmission lines, than they do for energy savings. Incentivizing utilities to over-build massive infrastructure, instead of promoting efficiency performance and renewable energy, will lead to higher rates and make it increasingly difficult to maintain the grid. A more distributed energy grid focused on consumer usability and engagement does not have to be a distant prospect, so long as utilities reform their business models to focus on energy savings, emissions reductions, and outcomes synonymous with goals of the Commonwealth.