In its eagerness to address climate change, the Maine Legislature has given a multimillion-dollar windfall to solar farm developers that threatens to raise electric rates as much as 20 percent. It is not too late to amend this legislation before all these solar farms are built. This looming rate increase comes on top of the recently announced 30 percent rate increase in the average household Central Maine Power bill.

The Maine Public Utilities Commission had been entering into contracts to purchase renewable electricity at the competitive rate of 3 to 4 cents per kilowatt-hour before the Legislature opened the floodgates two years ago to invite developers to build solar farms in Maine with a subsidy of many times the wholesale rate without any competitive bid process. The legislation permitted these solar farms to produce up to 5 megawatts – the size of a small power plant – and failed to limit the number of these farms, essentially issuing a blank check on the state’s exposure.

The legislation usurped the authority of the PUC to exercise any discretion in limiting this giveaway and failed to require these solar farms to be built at strategic locations. Maine’s transmission and distribution system was built for large power plants to deliver power to customers. The system was not built to add small solar generators at any location along the distribution system.

The solar developers are paid retail rather than wholesale rates for the power they produce, which shifts all the costs for transmission, distribution, billing and storm restoration for this power to other customers. And because retail rates are increasing 30 percent, these developers will get that windfall paid on top of their already lucrative subsidy – all at the expense of other customers.

Maine has embarked on an ambitious agenda to reduce greenhouse gases by 45 percent by 2030 and by 80 percent by 2050. The plan calls for 80 percent of electricity to be generated from renewable sources by 2030 and 100 percent by 2050, which may explain the Legislature’s interest in bringing on as much solar power as possible.

The state’s aggressive goals to reduce greenhouse gases assume that Mainers will switch to electric heat pumps and electric vehicles because heating and driving account for most of the state’s carbon emissions. But these electric rate increases make switching to electric for heat and transportation less feasible. The Legislature’s overly generous subsidy to solar developers not only imposes an undue burden on the electric ratepayer but also will likely undermine the state’s goal of addressing climate change.

Utility regulation requires a balance among the three Rs – rates, reliability and renewables. This balancing act is particularly challenging because reliability, affordability and addressing climate change compete directly with each other. The more you have of one, the less you may have of the others. Solar generation produces power only during daylight hours, which makes it less reliable than sources that can produce electricity over a 24-hour period. All new power sources increase costs because Maine is a net exporter of electricity. They must be added judiciously with the ratepayer in mind.

Many large electric users have entered into contracts with these solar projects, which will provide them a portion of the windfall to hedge against the inevitable electric rate increases. This may provide these solar developers with political support, but it will not make this program good energy policy.

The Legislature should give the PUC the discretion to reject projects that are not in the public interest because of their expense or location. The state can move aggressively in the direction of renewable electricity by allowing the commission to enter into long-term contracts for renewable energy projects of any size under a competitive bid process.

We can address climate change and provide Maine with reliable power supplies while holding down electric rates, but not by providing huge subsidies to out-of-state developers.

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