Author: Maria Mc Coy Published: 4/15/2024 ILSR
With mounting pressure from both utilities and energy democracy advocates, state legislative decisions on community power were a mixed bag in 2023. These policy-making decisions underwrite local autonomy, clean energy access, and utility accountability. They also determine who will see the most benefit from the clean energy transition. Will monopoly utilities get total control and reward their shareholders? Or will communities take charge and create resilient energy systems that strengthen local economies?
Read on for a breakdown of how state policies passed in 2023 will impact community power, or more specifically, how they impacted ILSR’s 2024 Community Power Scorecard — a review of 18 state policies that help or hinder local clean energy action.
Six States Pass Poor Policies, Sinking Their Scores
Let’s start with the bad news; in 2023, six state legislatures handed policy wins to monopoly utilities at the expense of communities.
Despite the benefits of local ownership and evidence that building more distributed energy generation capacity reduces costs across the electricity system, monopoly utilities are still trying to squash distributed solar. Utilities see customer-owned solar as a threat, so they misdirect the public with inflated solar cost estimates that serve their own shareholder interests. This anti-solar messaging worked in Indiana, California, and now Arkansas, where legislators have dismantled the state’s net metering policy. The new Arkansas policy dramatically reduces residential solar compensation and makes it harder for households — particularly low- and middle-income households — to go solar. It will go into effect in 2025.
The Maine legislature passed a measure that limits net energy billing, the only community solar offering in the state. Under the new policy, community solar projects generating between one and two megawatts can only participate in kilowatt-hour crediting if they reach commercial operation by the end of 2024. Kilowatt-hour crediting is how residential customers subscribe to community solar. In other words, at year’s end, there will be no opportunity to build community solar projects for residential subscribers.
Learn more about Why Utility Execs Hate Distributed Solar.
Since 2020, fossil gas interests have successfully lobbied legislators in 24 states to pass bills that preempt local decision making over gas network expansion. Idaho, Montana, North Dakota, and South Dakota passed their gas ban preemption bills in 2023 and lost points in our 2024 scorecard.
Seven States Improve their Community Power Scores
Legislators in several states increased access to distributed solar by improving their community solar programs, despite resistance from utilities. Community solar provides a way for people who cannot install solar on their rooftop to share in the benefits of renewable energy — but it must be enabled by state policy.
- Maryland made its community solar pilot permanent in 2023. Maryland House Bill 908 made two key changes: there is no cap on overall program capacity, and 40 percent of each project’s energy generation must serve low- to moderate-income subscribers.
- Minnesota capped its previously uncapped community solar program, but also added key provisions for equity. The state now has a 30 percent low- to moderate-income subscriber carveout and prohibits developers from using credit scores to qualify new subscribers.
- New Jersey increased the cap on its community solar program, added provisions for consolidated billing, and will allow low- and moderate-income residential subscribers to self-attest their incomes — a good policy for promoting equity.
Legislators in Colorado, Connecticut, and Maine each stepped up last year to protect consumers from paying for political activities through their utility bills. This new attention on how utilities recover costs from their customers has become a promising trend, with many state legislatures considering similar bills this year. Solar United Neighbors and the Energy and Policy Institute have developed a model bill for these utility accountability measures.
In an amendment to its existing program, Minnesota expanded its intervenor compensation to proceedings other than rate cases. This will make it easier for community representatives to participate in proceedings at the Public Utilities Commission and make arguments in the public interest.
Lastly, an Iowa court struck down the state’s right-of-first-refusal law in 2023, restoring the state’s points for that policy and the competitive process for building new power transmission lines.
To compare state policy environments, explore our interactive Community Power Map.
Several states, including Maine, Maryland, Rhode Island, and Vermont, made slight amendments to their net metering rules with no effect on their community power scores. The Rhode Island and Vermont measures were passed to discourage deforestation and will also apply to community solar.
Michigan’s 100% Clean Energy Standard increased the state’s cap on distributed generation from one to ten percent, yet failed to restore net metering or allow community solar, resulting in no impact on the state’s community power score.
Three Consequential Governor Vetoes
Wisconsin nearly became the 25th state to preempt cities from passing gas bans, but Governor Evers vetoed the legislature’s preemption bill.
The Illinois General Assembly passed a measure that would have given utilities right-of-first-refusal — the exclusive right to build transmission lines through their own territory. Governor Pritzker vetoed the bill to protect consumers and require that transmission line construction happens through a competitive, least-cost process.
Finally, in a blow to those trying to represent New Yorkers at utility regulatory proceedings, Governor Hochul vetoed a bill that would have allowed intervenors to apply for reimbursement. Intervenor compensation helps to level the playing field and bring more voices before decision makers.
This article originally posted at ilsr.org. For timely updates, follow John Farrell on Twitter, our energy work on Facebook, or sign up to get the Energy Democracy weekly update.