Why HB365 raises your electric bill

This explanation comes from Rep. Fred Plett

There is no cap on the ability build a generator of any size and selling the output, albeit at wholesale. The net metering bill raises the current cap from 1 to 5 MW of the ability, not to sell at wholesale, but the ability to sell to the local utility at retail, roughly 3 times the price. The proponents claim that selling at retail rather than wholesale, reduces electric bills. Their logic is that the amounts sold to the utility at retail will be treated not as generation, but as a load reducer, so when the utility goes out to bid for default service for the remainder, the load serving entities will play nice since they are under competitive pressure so the rate per kWh the LSE bids won’t go up, and the kWh are smaller, so the extra amounts paid to the net metered generation comes out of the hides of the LSE’s. The problem with that logic is that LSE’s are smart, they’ve got certain costs to cover, and they will cover them by raising bids per kWh, even if the load profile were the same. Furthermore, since the remaining load profile is much spikier due to the vagaries of wind and solar, bids will go up for that reason as well. Nothing comes for free. There is 40 MW of hydro (each unit under 5 MW), now selling wholesale, that will de-list from the wholesale market and sell retail instead. Since they are not bidding into the wholesale market as a price taker (bottom of stack), the clearing price for every hour in the day ahead market could be higher, raising wholesale rates, which then get tripled to retail levels. The proponents also argue that the NH load profile as a percentage of New England’s will be smaller, shifting the payment for transmission to other states. If other states do the same, it becomes a zero sum game, and no costs will be shifted, and since the costs are still there, the rate per kWh will go up to raise the same $$. I heard an argument from a proponent that distribution costs will also go down. False. The distribution costs are still there, charged against fewer kWh, so the rate per kWh goes up, paid for by all load not having net metering – i.e., you. The last argument proponents make is that if a municipal or county does this, tax bills could go down. True enough, but by the logic enumerated above, the savings will be paid for by non-participating rate payers.

About Rep. Steven Smith

Steven Smith is a member of the New Hampshire House of Representatives, serving his 7th term. Rep. Smith currently represents Charlestown, Newport, and Unity. Rep. Smith is the Deputy Speaker of the NH House.
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