Maine’s businesses are about to be hit with massive cost increases — in some cases of more than $50,000 for 2024 — thanks to a scheme devised by state lawmakers to subsidize solar power.
According to letters sent to customers by Versant Power, Maine’s second largest electrical utility, the portion of small business’ electrical bills described as “stranded costs” is set to increase from 2023 to 2024 anywhere from 20 percent to as much as 1,644 percent.
“A new, fixed monthly stranded cost dee is under review and would capture expenses and incentives to develop Maine’s renewable power generation and net energy billing programs,” Versant Power informed businesses in the rate hike letters.
Under the net energy billing program, Maine’s electrical utilities collect increased fees from residents and businesses, and that money is then used to subsidize the installation of so-called “community solar.”
In practice, the net energy billing scheme turns the utilities into tax collectors for the state — and bill collectors for the solar industry.
The price hikes coming for Maine businesses vary according to the customers rate class and level of electricity usage, but a review of several of the Versant letters shared with the Maine Wire shows that one business will see the stranded cost portion of their annual electrical bill spike from $24,419 to an estimated $77,261 — a 216 percent increase.
A smaller business with far less annual power consumption is looking at an increase from $196.75 to an estimated $3,432 — an increase of 1,644 percent.
Those costs only account for the annual increases in stranded costs, which is a small slice of the total annual electrical costs.
The names of the businesses were redacted from the letters provided to the Maine Wire, as several of the business owners were concerned with potential retribution from state officials and environmental activists he see the solar subsidies as a wall to lower global temperatures.
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According to the Office of the Public Advocate (OPA), which was created to advocate on behalf of rate payers, the solar subsidizes may increase electricity costs state-wide by as much as $220 million in 2025.
According to an analysis of electricity prices in paid for June 2024 by USA Today, Maine already has the sixth highest electricity costs in the country.
According to a 2023 analysis of Maine Public Utilities Commission (MPUC) records, the vast majority — 88 percent — of the companies profiting from the solar subsidies were headquartered outside of Maine.
If the rate hike requests are approved, businesses and residents will begin paying more for their electricity beginning in July.
In the 131st Legislature, Republican-backed efforts to rein in the cost of the solar subsidies were watered down into a bill that will leave the funding mechanism largely unchanged.
On Tuesday, Republican lawmakers pinned the blame for the rate hikes squarely on Democratic state lawmakers.
“If you are represented by a Democrat in the legislature, send them a thank you note,” said Senate Republican Leader Trey Stewart (R-Aroostook).
“It is their fault,” Stewart said.
Even with such costly subsidies, solar power remains a tiny sliver of New England’s total electricity production.
According to ISO New England, the nonprofit that operates New England’s power grid, less than four percent of New England’s electricity mix came from solar Wednesday afternoon — even as the skies were clear and temperatures were in the nineties.
In addition to the surge in electricity prices facing Maine’s businesses and residents, there are also concerns nationally about the solar industry’s connections to entities that benefit from forced labor in the People’s Republic of China.
A Maine Wire investigation last year found that a Maine Department of Transportation-led solar project in Augusta, for example, used solar equipment from a company whose suppliers had been blacklisted for suspected involvement with the Chinese government’s forced labor program.
NET ENERGY BILLING
Net Energy Billing (NEB) used to only apply to small-scale rooftop solar setups. The idea was to allow homeowners and businesses with solar panels to “sell” surplus electricity into the grid. But in 2019, lawmakers expanded NEB to include projects up to 5 megawatts.
To put that into perspective, Maine went from subsidizing roof-sized solar setups to subsidizing solar facilities that can cover 15-20 football fields. The amount of energy the vast solar facilities generate is correspondingly larger, and the law requires Central Maine Power and Versant, Maine’s top power utilities, to purchase that energy at an above-market rate.
The 2019 law placed few limitations on where the solar facilities could operate and how they could manage subscribers. For instance, the law allows a developer to build a solar facility most anywhere in the state of Maine, regardless of whether it makes sense from a grid management perspective, and then collect “subscribers” from anywhere in the state.
While lawmakers at the time said the change was about incentivizing renewable energy infrastructure, the Legislature set off a gold rush. By the end of 2022, solar developers had built out a whopping 295MW of solar capacity, according to ISO New England.
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