Distributed Generation Buy-All, Sell-All Program

Program Distributed Generation Buy-All, Sell-All Program
Category Regulatory Policy
Implementing sector State
Last Update
State Maine
Technologies Solar Thermal Electric, Solar Photovoltaics
Sectors Residential

Note: In March 2017, the Maine Public Utilities Commission (PUC) issued an order replacing net metering with a "buy-all, sell-all" compensation structure, which will gradually reduce the credit rate for energy produced by customer-generators from retail rate to the avoided cost rate. Although this entry is categorized as net metering, the policy adopted by the PUC does not meet DSIRE's definition of net metering, as self-consumption will no longer be permitted and production will no longer be netted one-to-one against consumption over the billing period.

Maine offers a Buy-All, Sell-All Compensation Program for new distributed generation customers, where a customer's total system production and total household consumption are credited and billed at separate rates. The participating customer-generator's monthly bill reflects the difference between these two components. In contrast to net metering or net billing programs, customers participating in Maine's buy-all, sell-all program do not receive a retail rate credit for energy consumed directly on-site, behind the meter.

Eligibility and Availability

All of Maine's electric utilities -- investor-owned utilities (IOUs) and consumer-owned utilities (COUs), which include municipal utilities and electric cooperatives -- must offer participation in the buy-all, sell-all program for individual customers. IOUs are required to offer participation to eligible facilities with capacity up to 660 kilowatts (kW). COUs are required to offer participation to customer-generators up to 100 kW, but they are authorized to offer participation to eligible facilities with capacities of up to 660 kW at their discretion.

The Buy-All, Sell-All Program is available to owners of eligible, qualified facilities, including facilities generating electricity using fuel cells, tidal power, solar, wind, geothermal, hydroelectric, biomass, municipal solid waste in conjunction with recycling, and eligible combined heat and power (CHP) systems. It should be noted that CHP systems must meet certain efficiency requirements in order to qualify: micro-CHP systems 30 kW and below must achieve a combined electrical and thermal efficiency of 80% or greater, and micro-CHP systems 31 kW to 660 kW must achieve a combined efficiency of 65% or greater.

Aggregate Capacity 

There is no limit on the aggregate amount of electricity that may be generated by net-billed or net-metered customers. However, a utility must notify the Maine Public Utilities Commission (PUC) if the cumulative capacity of net-billed and net-metered facilities reaches 3.0% of the utility's peak demand. PUC review of current rules is triggered at this threshold. 

Credit Rates

Under the PUC's March 2017 order, the portion of production from a new customer-generator's system that may be netted against transmission and distribution (T&D) charges will reduce by 10% annually for 10 years. This effectively reduces the T&D credit rate by 10% each year. Note that "nettable energy" includes energy consumed by the customer behind-the-meter, in contrast to net metering or net billing. One hundred percent of production may be netted against the supply portion of a customer's bill.

 T&D Bill Nettable Energy   % of Output
 that is Nettable 
 Applicable through Dec. 31
of Year Shown 
 For existing customers as of Dec. 31 2017  100%   2032
 For customers with an in-service date during 2018 90%  2033
 For customers with an in-service date during 2019 80%  2034
 For customers with an in-service date during 2020  70%  2035
 For customers with an in-service date during 2021   60%   2036
 For customers with an in-service date during 2022  50%  2037
 For customers with an in-service date during 2023   40%   2038
 For customers with an in-service date during 2024   30%    2039 
 For customers with an in-service date during 2025  20%   2040 
 For customers with an in-service date during 2026  10%  2041
 For customers with an in-service date after 2026   0%  N/A

Until December 31, 2026, customers will receive the designated percentage of nettable energy at the time their system was placed in service for a period of 15 years. 

Net Excess Generation

If a customer's nettable energy exceeds their kilowatt-hour (kWh) consumption during the billing period, excess nettable energy may be carried forward to the next billing period, for up to 12 months, at which time any remaining net excess generation is granted to the utility with no compensation for the customer.

Renewable Energy Certificates

Customers may opt to have the renewable energy certificates generated by their system aggregated by the utility and sold into the regional market. COUs are not required to offer REC aggregation, but are permitted to.

Shared Ownership

IOUs are required to offer participation in the buy-all, sell-all program to shared ownership customers, while COUs may offer participation to shared ownership customers at their discretion. "Shared ownership" allows for community energy facilities, where several people invest in an eligible system and are therefore allowed to receive generation credits on their bills. 

Shared ownership customers must maintain ownership interest in an eligible facility. These customers share the responsibilities and costs of the facility and resulting proportional benefits. The shared ownership customers must designate one contact person to serve as the liaison between the owners and utility. Up to 10 meters can receive credits from a single eligible facility. Credits from nettable energy is allocated to participants according to each customer's ownership interest in the facility.

Grandfathering

Customers with facility in-service dates prior to January 1, 2018 will be grandfathered under the former retail rate net metering rules for a period of 15 years. The following provisions apply only to customers grandfathered under the former net metering rules:

Production from a net metering customer's system and household consumption over the entire billing period are netted at a one-to-one ratio, providing the customer with a retail rate credit for all energy produced up to the customer's level of consumption.

Net excess generation (NEG) (kWhs produced in excess of kWhs consumed over the entire the billing period) is credited at retail rate and may be carried forward to the following month for up to 12 months; at the end of a 12-month period, any remaining NEG is granted to the utility with no compensation for the customer. At its own expense, a utility may install additional meters to record purchases and sales separately. 

Shared ownership facilities placed in service prior to January 1, 2018 are also grandfathered under the former net metering rules.

History

Net metering was available in Maine from 1987 to 1998 for owners of qualified combined heat and power (CHP) systems and from 1987 until April 30, 2009 for owners of other small power production facilities with a maximum capacity of 100 kW. When Maine's legislature enacted restructuring legislation that provided for retail competition beginning March 1, 2000, the PUC amended the state's net metering rules to make the rules consistent with changes to the structure of the electric industry. The rules were modified to address issues related to existing contracts that extended beyond March 1, 2000.

However, in addressing net metering arrangements that took effect after the onset of retail competition, the PUC decided that new rules would be more appropriate than the regulations already in place for cogeneration and small power production facilities. Thus, the PUC issued new net metering rules applying to the resources and technologies defined in the state's restructuring legislation: fuel cells, tidal power, solar, wind, geothermal, hydroelectric, biomass, and municipal solid waste in conjunction with recycling. CHP was not eligible at this time. It was also clarified that net metering was exempt from sales and use tax with respect to the sale or delivery of kilowatt-hours of electricity to net energy billing customers as defined by the PUC for which no money is paid to the electricity provider or to the transmission and distribution utility (see MRSA Title 36, §1760, sub-§80).

The PUC issued an order amending net metering in early 2009 in order to allow shared ownership, subject to legislative approval. In April 2009, Gov. John Baldacci signed L.D. 336, authorizing the final adoption of the rule, further amending it to include high efficiency micro-CHP systems as eligible to net meter and to participate in the new shared ownership net metering opportunities. This resolve also increased the eligible system capacity limit from 500 kW (as in the proposed rules) to 660 kW.

L.D. 1652, enacted in April 2014, directed the Maine PUC to prepare a report on the value of distributed solar energy generation to the state of Maine. The final report was released in March 2015. The study determined the first-year value of distributed solar to be $0.182 per kilowatt-hour (kWh) and the long term (25-year levelized) value to be $0.337 per kWh.

L.D. 1263/H.P. 863, enacted in June 2015, directed the PUC to convene a stakeholder group to create an alternative to net metering. The legislation also provided a number of guidelines for this alternative policy. The solar stakeholder group submitted its final report in February 2016 detailing the net metering alternative designed by the group. A bill (L.D. 1649) was introduced in 2016 to adopt the alternative policy developed by the stakeholder group, but was ultimately vetoed. 

The PUC opened an inquiry into net metering in June 2016, and initiated a rulemaking in September 2016 to modify existing net metering rules. In March 2017, the PUC published a final order replacing net metering with a buy-all, sell-all compensation program.

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