Green power vs. red tape

When a renewable energy installation produces more power than its location requires at a given time, the excess energy flows back into the electric grid. The owner of the project earns credits for the energy it contributed to the grid. The credits can be used to lower (or eliminate) a location’s electric bill, or can be applied to other accounts.

The town of Nantucket, for example, could use the credits earned by the landfill turbine to offset the electricity bills at other town-owned buildings.

This arrangement is called net metering.

State law places a cap on the amount of energy production eligible for net metering in the territory served by each power distribution company. This limit is calculated at 3 percent of the area’s peak load, or highest daily usage.

National Grid, however, operates as two separate distribution companies: Nantucket Electric Co., which serves just the island, and Massachusetts Electric Co., which serves the remainder of National Grid’s territory.

On Nantucket, the limit is 1,140 kilowatts: 380 kilowatts from private projects and 760 kilowatts from municipal or government installations, according to National Grid.

By way of comparison, the typical residential solar project is from three to five kilowatts in size; the turbines contemplated for use in Cape Wind have a capacity of 3.6 megawatts.

The renewable energy projects currently under consideration on Nantucket would exceed the island’s cap, making them far less financially feasible, Kuszpa said.

“It wouldn’t make sense economically for us to put the (landfill) turbine there because we wouldn’t be able to use the credits elsewhere,” she said. “It’s been stalled because of the net metering cap.”

For now, several renewable energy projects have been put on hold, Town Manager Elizabeth Gibson said. A solar installation planned by the town and another planned by the water company have both been delayed, she said.

The landfill wind project “hasn’t entirely been put on hold, but we’ve slowed down on efforts towards getting it permitted immediately,” she said.

In the rest of National Grid’s territory, the peak load is higher and, thus, the net metering cap is higher: 51 megawatts for private projects and 102 megawatts for municipal or governmental projects.

Any of the 165 towns in that service area, however, can have up to 10 megawatts of capacity eligible for net metering, as long as the territory-wide cap is not exceeded.

And that discrepancy, some contend, is unfair to Nantucket.

“We are quite perplexed by why this would only affect Nantucket,” Gibson said.

This spring, local lawmakers stepped in to try to find the answer.

“We just want to be on the same level playing field as all of National Grid’s other communities,” said state Rep. Timothy Madden, D-Nantucket.

In May, Madden and Wolf sent a letter to National Grid, asking for an explanation of the lower cap on Nantucket and requesting a meeting between town officials and company executives to resolve the issue.

“We have not yet received a satisfactory explanation of why the limit that National Grid is applying to Nantucket is so much lower than the limit that applies to all of the other Massachusetts municipalities served by National Grid,” the legislators wrote.

In its response, National Grid explained that it is simply complying with the law; as a separate legal entity, Nantucket Electric Co. cannot have a cap higher than 3 percent of the island’s peak load, the letter said.

“In our opinion, it would not be legally permissible to combine the peak loads for the two companies to develop one cap, as the statute is very specific that the cap is per distribution company,” the letter reads.

Keeping the island power company separate has allowed National Grid to take advantage of tax-exempt financing opportunities that made it less expensive to lay undersea cable to the island, therefore saving customers money, the letter explained.

Not satisfied with this response, Wolf and Madden wrote another letter, this time to the Massachusetts Department of Public Utilities, asking the state to get involved.

Madden is hopeful that National Grid will be willing to work with the town and state to resolve the issue.

“I don’t think they’re opposed,” he said. “It’s just the way the law is written it doesn’t have that latitude in it.”

It is not yet clear, Wolf said, if the administration can solve the problem with regulations or if legislation would be required to change the cap requirements.

“We have to get creative, because it’s in everybody’s best interest for the island to be developing more renewables,” he said. “In the long run it just makes sense for that to happen.”