Rustic Crust wants net metering cap raised to keep its electricity costs low

  • GEOFF FORESTER—Monitor staff

  • GEOFF FORESTER—Monitor staff

Monitor staff
Published: 9/17/2019 5:00:07 PM

For a short spell, Doug Troy faced the same problems as every New Hampshire business executive: astronomical energy prices with scant signs of relief. But then he found a workaround.

The chief operating officer for Rustic Crust in Pittsfield, which produces ready-made pizza crusts and sauces, decided to tap into renewable energy. 

Under an arrangement set up by an energy broker, Rustic Crust joined a small group of businesses to buy electricity at lower rates than they might through utilities alone. 

The deal saved everyone money, Troy says, and it was nice to tap into renewable energy. Then it became a victim of its own success. With more businesses interested in jumping in, the energy producers faced a simple problem: They were running out of power to distribute. 

A cap in state law limited the amount that the hydroelectric producers could sell under the arrangement, a cap known as net metering.

Now, whether to raise or leave that cap be has become a political flashpoint that’s divided members of the state Republican party and dragged on for two years. 

This week, the debate will reach a head, as lawmakers attempt for the second year in a row to overtake a veto by Gov. Chris Sununu on a bill to raise that cap. 

House Bill 365 – which has attracted Republican and Democratic votes in the past – would raise the limit to a level five times higher. 

Sununu and other opponents say for all the perceived environmental benefits to net metering – a policy meant to encourage the expansion of solar and other “home-grown” sources across the state – the move will lead utility companies to charge higher rates. 

Supporters dispute that rationale. 

To Troy and Rustic Crust, an early adopter into group net metering, the set up is a win for businesses that choose to try it out. 

Back in 2015, the reasons for entering into the arrangement were clear, Troy says. Rustic Crust competes nationally, meaning when it comes to electric rates, its position in New Hampshire creates a disadvantage. 

“We were looking for a way to try to drive down our electrical rates so we could be more competitive in the marketplace,” Troy said. “Which we were able to do.”

The company saved money by finding alternate renewable suppliers and invested it back into the business, he said – about $100,000 worth over five years. It also helped that renewable energy fit with the mission of the company. 

The renewable energy purchased by Rustic Crust was arranged through a broker – Nashua based Standard Power of America. 

Under group net metering, renewable energy producers such as hydropower plants send the energy they produce back into the electrical grid, and are reimbursed by utility companies with credits for the value of that energy. 

Energy consumers within the group, which can include companies, towns, and schools, then purchase the energy from the utility at the standard rate. Through an arrangement set up by the broker, those consumers are then reimbursed by the hydropower payments for a portion of that – in effect getting a discount rate by buying green. 

For Robert Hayden, vice president of Standard Power, the situation is a win-win for everyone. 

The participating renewable energy producers get connected with ready and willing buyers, boosting business. Businesses and towns receive discounts on the standard rate through reimbursements from the producers. And utility companies are made whole at both ends. 

“It allows a business owner to make better and have a wider range of choices in how they power their business,” he says. “In most cases, it allows them to reduce their costs dramatically.”

Standard Power built the group metering arrangement from two hydropower producers and one interested customer in 2015, Hayden says. Now, they’ve expanded to 20 producers and 120 customers. 

But the state’s net metering cap is putting a damper on expansion, Hayden says. The limit means that only small or medium-sized energy producers can sign on; the others must go it alone. Standard Power now has established a waitlist for new companies to jump in. 

Those against the net metering expansion say it means one thing: higher electric rates for everyone else. By mandating that electric utilities like Eversource and Unitil buy more renewable power from home and business generators rather than sourcing it through contracts from larger producers, the proposed law would subject those utilities to the unpredictability of those green energy sources, says Marc Brown, president of the New England Ratepayers Association.

Because solar wind and even hydropower output can fluctuate depending on changes in weather or seasons, utilities could be saddled with unexpected costs by needing to source energy elsewhere, Brown said.

Brown called the bill a “solution looking for a problem,” and argued that large renewable energy producers can already cut direct agreements with consumers without net metering. 

“HB 365 would directly benefit subsidy-dependent solar developers by unnecessarily increasing the cost of electricity by tens of millions of dollars and push those costs onto all New Hampshire residents and businesses,” Brown said. “These ratepayers already bear the burden of some of the highest electricity prices in the nation.”

Net metering advocates have pushed back on the argument. This year’s bill, HB 365, mitigates any cost increases by requiring utilities use any energy they get from renewable producers to offset the energy they’re planning to purchase elsewhere. That, advocates say, should limit the amount utilities could lose. 

Either way, Troy knows what’s worked for him. Facing the cap, Rustic Crust has had to reduce the amount of energy bought through net metering from 100% to about 30%. The company now uses third-party energy sources to help make up the gap and find savings elsewhere.

“We’re buying local energy,” he said. “They’re small businesses; we’re buying power from the businesses.”

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