Fox Island Electric Cooperative Wants Out of Net Energy Billing, Cost and Reliability Problems
Fox Island has reached 21.30% of its peak demand.
CMP has reached 53% of its peak demand
Versant has reached 102% of its peak demand for the Bangor Hydro District
Versant has reached 154% of its peak demand for the Maine Public District
FOX ISLANDS ELECTRIC COOPERATIVE, INC. NOTIFICATION AND REQUEST FOR WAIVER
Fox Islands Electric Cooperative, Inc. (“FIEC”) is a nonprofit member-owned electric transmission and distribution (“T&D”) cooperative utility organized pursuant to 35-A M.R.S. §§ 3701, et seq. FIEC provides electric service to the Vinalhaven and North Haven Island communities in Knox County, Maine.
FIEC hereby notifies the Maine Public Utilities Commission (“Commission”) that it has exceeded the cumulative net energy billing (“NEB”) capacity of 10% of peak demand as directed by the Commission’s Rules. FIEC’s installed capacity of NEB facilities has reached 21.30% of its peak demand. FIEC recognizes that this notice may trigger a Commission review of NEB in a separate rulemaking docket involving all T&D utilities.
Combined with this notification, FIEC respectfully requests that the Commission waive FIEC’s obligation to enter into new net energy billing (“NEB”) arrangements as of April 1, 2025, for good cause and in the best interest of FIEC’s member-owners as set forth herein. The NEB capacity in FIEC’s service territory is (1) shifting costs to non-NEB customers at an unsustainable level, (2) impacting FIEC’s grid operations, and (3) frustrating FIEC’s renewable energy-independent small grid goals.
FIEC is the first electric utility to notify the Commission that it has reached the 10% cumulative capacity threshold.1 NEB reaching 20% cumulative capacity of peak demand in FIEC’s service territory and the cost and operational impacts of such installations substantively support FIEC’s request for a waiver in this combined filing. The requested waiver would be narrowly applied to FIEC’s service territory on a forward-going basis for the good cause justifications outlined in this combined notification and request and subject to the Commission’s future rulemaking.
I. Notification of Cumulative NEB Capacity
Pursuant to §3(O) of Chapter 313 of the Commission’s Rules, FIEC hereby notifies the Commission that the cumulative capacity of generating facilities in FIEC’s service territory subject to the provisions of Chapter 313 has exceeded 10% of FIEC’s peak demand.
The Commission has consistently recognized that the NEB mechanism results in a shift of T&D utility revenue responsibility from NEB customers to non-NEB customers with corresponding impacts on the rates of non-NEB customers. The Commission adopted a “cap” on net billing load that triggered a review of the benefits and costs of “additional net billing.” The Commission’s initial requirement notification requirement when net billing load reaches 0.5% of its total peak load was increased to 1% in 2016, and then to 10% in 2019. A review trigger is included in the NEB rules so that the Commission can monitor the operation of the rule and its benefits and costs to ratepayers.
FIEC reached its peak demand of 2,483 kW in February 2023. With the considerable growth in electrification on the Fox Islands due to heat pump installation, FIEC anticipates reaching a peak demand of 2,500 kW in 2025.
Based on FIEC’s historical and anticipated demand, the cumulative installed NEB capacity in FIEC’s service territory has more than doubled in the past five years, surpassing 20% of FIEC’s anticipated peak demand.
The installed capacity of NEB facilities in FIEC’s service territory increased slowly from 18.49
kWh to 78.18 kW from 2010 to 2016 – about 10 kW per year. During this period, NEB had a
relatively small cost to FIEC in terms of reduced utility revenue and the expenses related to
additional equipment. From 2017 to 2020, 142.55 kW were installed, increasing pace to about 47 kW a year. From 2021 to the date of this request, installed NEB capacity in FIEC’s service territory has increased 267.88 kW – an alarming 67 kW a year.
kWh to 78.18 kW from 2010 to 2016 – about 10 kW per year. During this period, NEB had a
relatively small cost to FIEC in terms of reduced utility revenue and the expenses related to
additional equipment. From 2017 to 2020, 142.55 kW were installed, increasing pace to about 47 kW a year. From 2021 to the date of this request, installed NEB capacity in FIEC’s service territory has increased 267.88 kW – an alarming 67 kW a year.
NEB facilities are not helping to reduce FIEC’s peak demand/capacity. Even during morning peaks and in the summer months when daylight extends into the evening, NEB facilities deliver
minuscule amounts of power to FIEC during FIEC’s peak. The 15-minute interval metering data
shows that FIEC is delivering power to most NEB customers during peak periods.
minuscule amounts of power to FIEC during FIEC’s peak. The 15-minute interval metering data
shows that FIEC is delivering power to most NEB customers during peak periods.
FIEC received the following power from NEB facilities during FIEC’s peak demand for 2024:
The rapid increase in NEB facilities is impacting FIEC’s ability to provide affordable, reliable
service to its customers. As peak demand continues to rise, net sales to pay for the construction, operation, and maintenance of the grid are decreasing. Maintaining an appropriate power factor is also becoming increasingly difficult as more small generators operate on FIEC’s small grid.
service to its customers. As peak demand continues to rise, net sales to pay for the construction, operation, and maintenance of the grid are decreasing. Maintaining an appropriate power factor is also becoming increasingly difficult as more small generators operate on FIEC’s small grid.
II. Request for a Waiver
Pursuant to §5 of Chapter 313, FIEC requests that the Commission waive FIEC’s obligation to
enter into any new NEB arrangements beginning April 1, 2025, until such time as FIEC’s peak
demand reaches 5.5 MW or earlier if the waiver is superseded by Commission Rules.
enter into any new NEB arrangements beginning April 1, 2025, until such time as FIEC’s peak
demand reaches 5.5 MW or earlier if the waiver is superseded by Commission Rules.
§5 of Chapter 313 of the Commission’s Rules states:
Upon the request of any person subject to this Chapter or upon its own motion, the
Commission may, for good cause, waive any requirement of this Chapter that is not
required by statute. The waiver may not be inconsistent with the purposes of this
Chapter or Title 35-A. The Commission, the Director Electric and Gas Utility
Industries, or the Presiding Officer assigned to a proceeding related to this Chapter
may grant the waiver.
Commission may, for good cause, waive any requirement of this Chapter that is not
required by statute. The waiver may not be inconsistent with the purposes of this
Chapter or Title 35-A. The Commission, the Director Electric and Gas Utility
Industries, or the Presiding Officer assigned to a proceeding related to this Chapter
may grant the waiver.
The authority to grant the waiver is within the Commission’s implied and inherent powers, which are interpreted and construed liberally according to 35-A M.R.S. §104. FIEC’s request for a waiver was contemplated in the Commission’s deliberations as a reasonable means to address the concern that the costs of NEB could become significant over time.
NEB Statutory Requirements for Consumer-Owned Utilities
FIEC recognizes that a waiver must be consistent with the purposes of Chapter 313 and Title 35 A of the Maine Revised Statutes. 35-A M.R.S. §3209-B and the Chapter 313 rules implementing the section apply only to investor-owned utilities. Therefore, FIEC requests a waiver specifically for the provisions applicable to consumer-owned utilities in Title 35-A M.R.S. §3209-A and Chapter 313.
Title 35-A M.R.S. §3209-A authorizes the Commission to adopt or amend net energy billing rules. The Commission is required to allow a customer to participate in net energy billing, but only if the customer has a financial interest in a distributed generation resource or in a generation resource with a net energy billing arrangement on the effective date of the section, which was in 2019.
The right to NEB benefits is not absolute or indefinite. The Maine Legislature granted the
Commission the authority in §3209-A to adopt and amend NEB rules. The Commission adopted a “cap” on net billing load that triggered a review of the benefits and costs of “additional net billing.” The cap is not provided for in §3209-A; the cap was adopted by the Commission and approved at various percentages by the Maine Legislature as part of the major substantive rule review. Therefore, the Maine Legislature has recognized the Commission’s statutory authority to apply the cap for good cause at its discretion.
Commission the authority in §3209-A to adopt and amend NEB rules. The Commission adopted a “cap” on net billing load that triggered a review of the benefits and costs of “additional net billing.” The cap is not provided for in §3209-A; the cap was adopted by the Commission and approved at various percentages by the Maine Legislature as part of the major substantive rule review. Therefore, the Maine Legislature has recognized the Commission’s statutory authority to apply the cap for good cause at its discretion.
As discussed in the adoption of NEB rules following deregulation, upon notification, the
Commission will review the merits of net billing to determine whether new net energy billing
arrangements should be entered into on a forward-going basis.8 FIEC requests the waiver on a
forward-going basis, not affecting current NEB arrangements in its service territory.9 No customers will be deprived of established NEB benefits, which will be grandfathered in FIEC’s service territory.
Commission will review the merits of net billing to determine whether new net energy billing
arrangements should be entered into on a forward-going basis.8 FIEC requests the waiver on a
forward-going basis, not affecting current NEB arrangements in its service territory.9 No customers will be deprived of established NEB benefits, which will be grandfathered in FIEC’s service territory.
The NEB Cost Shift to Non-NEB Customers is Unsustainable
FIEC currently provides NEB benefits to 63 customers across 74 metered accounts; monthly
billing is a manual process. FIEC serves 2,102 meters; NEB customers make up 3.5% of FIEC’s
customers. Because FIEC serves a small, isolated grid, FIEC’s delivery revenue losses due to NEB amount to over 20% of its annual margin (difference between revenue and cost of service).
billing is a manual process. FIEC serves 2,102 meters; NEB customers make up 3.5% of FIEC’s
customers. Because FIEC serves a small, isolated grid, FIEC’s delivery revenue losses due to NEB amount to over 20% of its annual margin (difference between revenue and cost of service).
The following graph shows that the gap between kWh delivered and kWh sales (customer-paid
delivery service) is growing unsustainable for FIEC’s non-NEB customers. Without a waiver, the
projection of this trend over the next five years will result in FIEC incurring significant losses and an increased risk of financial instability.
delivery service) is growing unsustainable for FIEC’s non-NEB customers. Without a waiver, the
projection of this trend over the next five years will result in FIEC incurring significant losses and an increased risk of financial instability.
Due to the increasing amount of delivered kWh offset by NEB, FIEC can no longer rely on kWh
sales to recoup enough revenue to cover system costs. In 2024, FIEC delivered 304,564 kWh to
NEB customers, which was offset on customer bills by their NEB-related distributed generation
credits. Based on FIEC’s Residential Delivery Rate of $0.13708/kWh, this resulted in FIEC not
collecting $41,750 of services that FIEC provided – a significant amount for a small, nonprofit
utility and more than 2023 losses of $30,577. The not collected amount represents 21% of FIEC’s margin (the annual difference between operating revenue and cost of service), which was only $203,120 in 2024.
sales to recoup enough revenue to cover system costs. In 2024, FIEC delivered 304,564 kWh to
NEB customers, which was offset on customer bills by their NEB-related distributed generation
credits. Based on FIEC’s Residential Delivery Rate of $0.13708/kWh, this resulted in FIEC not
collecting $41,750 of services that FIEC provided – a significant amount for a small, nonprofit
utility and more than 2023 losses of $30,577. The not collected amount represents 21% of FIEC’s margin (the annual difference between operating revenue and cost of service), which was only $203,120 in 2024.
FIEC passes NEB energy and transmission cost losses on to non-NEB customers monthly in its
Transmission Charge and Energy Charge, which are calculated and billed at cost. FIEC typically
receives NEB power from 10:00 a.m. to 2:00 p.m. when FIW is generating, and there is not much demand on FIEC’s grid. FIEC sells the unused energy to the ISO-NE energy market via Vermont Public Power Supply Authority for $0.03/kW - $0.05/kW, incurring an 8% line loss over FIEC’s submarine transmission cable from North Haven to Glen Cove.
Transmission Charge and Energy Charge, which are calculated and billed at cost. FIEC typically
receives NEB power from 10:00 a.m. to 2:00 p.m. when FIW is generating, and there is not much demand on FIEC’s grid. FIEC sells the unused energy to the ISO-NE energy market via Vermont Public Power Supply Authority for $0.03/kW - $0.05/kW, incurring an 8% line loss over FIEC’s submarine transmission cable from North Haven to Glen Cove.
During evening peak periods, when NEB customers are neither generating nor contributing power to the system, FIEC must deliver peak power to NEB customers at a cost of $0.11/kW - $0.17/kW, incurring another 8% of line losses as well as transmission charges at a cost of $0.04/kW. Because NEB customers have received kWh credits in their accounts from their non-peak generation, FIEC’s non-NEB customers must pay the difference in energy and transmission costs on a monthly basis, the cost being the most significant in the winter months when abundant summer kW credits in NEB accounts offset expensive winter energy.
FIEC is seeking a fixed cost rate increase of 11% pursuant to Commission Docket No. 2024-00355. FIEC proposes to increase fixed monthly costs for all customers to recover costs regardless of how much power is billed. Unfortunately, this approach also raises monthly bills for FIEC’s middle and lower-income customers who cannot afford NEB systems, even with State and Federal rebates and tax deductions. At the current rate of NEB implementation, FIEC will need to raise rates again in 2027. FIEC requests a waiver for new NEB arrangements to prevent the cost shift from increasing and avoid future rate increases due to lost delivery revenue.
NEB is Impacting FIEC’s Grid and Threatening Reliability
FIEC provides T&D service to two islands via an 11-mile 35 kV submarine transmission cable and an on-island 4.5 MW wind farm that produces intermittent power. Maintaining the appropriate power factor is essential to match energy consumption with production and delivery while protecting the system from damage. NEB facilities are inverter-based resources that do not provide the inertia necessary to balance power supply with demand, leaving FIEC to detect and respond to grid imbalances without a conventional fossil, nuclear, or hydropower generator nearby for frequency response.
While FIEC is upgrading its system and modernizing the grid to adapt to these challenges, NEB
has reached a cumulative capacity that is now working against FIEC’s efforts. So far in 2025, FIEC While FIEC is upgrading its system and modernizing the grid to adapt to these challenges, NEB has reached a cumulative capacity that is now working against FIEC’s efforts. So far in 2025, FIEC has responded twice to NEB system issues that blew cutouts and de-energized a portion of FIEC’s system. FIEC’s system worked correctly, preventing damage to FIEC’s infrastructure and other customers. However, FIEC only has four linemen and insufficient resources to respond to the increasing instances of NEB facility issues.
has reached a cumulative capacity that is now working against FIEC’s efforts. So far in 2025, FIEC While FIEC is upgrading its system and modernizing the grid to adapt to these challenges, NEB has reached a cumulative capacity that is now working against FIEC’s efforts. So far in 2025, FIEC has responded twice to NEB system issues that blew cutouts and de-energized a portion of FIEC’s system. FIEC’s system worked correctly, preventing damage to FIEC’s infrastructure and other customers. However, FIEC only has four linemen and insufficient resources to respond to the increasing instances of NEB facility issues.
NEB is Impeding FIEC’s Renewable Energy Goals
NEB is actually impeding FIEC’s goals to develop cost-effective, reliable, renewable energy in the State of Maine by diverting resources from small grid and renewable projects, restricting FIEC’s rate capacity for new capital infrastructure components.
FIEC is a leader in island renewable energy development. Pursuant to 35-A §3771, FIEC organized Fox Islands Wind, LLC (FIW), a 4.5 MW wind farm on Vinalhaven Island. FIW provides an average of 60% of FIEC’s power requirements. The USDA Rural Utilities Service recently
awarded FIW a $3.625 million grant and a $10.875 million loan at 2% interest, pursuant to the
Inflation Reduction Act’s New ERA program, to repower FIW’s wind turbines and install a 1 MW
solar array. The New ERA projects are expected to achieve a 99.8% greenhouse gas-free energy supply for FIEC’s customers beginning in 2031. FIEC is also developing a 5 MW battery energy storage system to integrate and efficiently use its intermittent renewable energy.
awarded FIW a $3.625 million grant and a $10.875 million loan at 2% interest, pursuant to the
Inflation Reduction Act’s New ERA program, to repower FIW’s wind turbines and install a 1 MW
solar array. The New ERA projects are expected to achieve a 99.8% greenhouse gas-free energy supply for FIEC’s customers beginning in 2031. FIEC is also developing a 5 MW battery energy storage system to integrate and efficiently use its intermittent renewable energy.
The projects are subject to many complex steps, including approval by the Maine Department of Environmental Protection and the Town of Vinalhaven, extensive engineering studies, and various approvals. FIEC recoups project development and long-term debt financing costs from its ratepayers. As revenue decreases due to NEB, FIEC must raise rates to cover the fixed costs of operating and maintaining the existing system. Rate increases perpetuate the affordability gap among FIEC’s middle and low-income customers, suppressing FIEC’s ability to raise rates further to support new infrastructure financing.
FIEC’s request for a waiver is consistent with Maine's policy to encourage electricity generation
from renewable sources. The waiver will allow FIEC to use future resources for renewable energy infrastructure that benefits all of its customers, not just NEB customers.
from renewable sources. The waiver will allow FIEC to use future resources for renewable energy infrastructure that benefits all of its customers, not just NEB customers.
Conclusion
FIEC is a consumer-owned utility that operates on a nonprofit basis with limited resources to serve two island communities in a reliable, affordable, and responsible manner. This notification and request was reviewed and approved by FIEC’s democratically elected board of directors at its regular public meeting held on February 26, 2025. FIEC supports Maine’s renewable energy goals and is implementing them in an equitable and technically feasible manner that benefits all its customers. FIEC requests that the Commission waive FIEC’s obligation to enter into any new NEB arrangements until FIEC’s peak demand reaches 5.5 MW, at which time FIEC should be able to integrate more NEB facilities without unreasonably shifting costs to other customers or risking the integrity and reliability of its grid. FIEC recognizes that the Commission may supersede the waiver in future rulemaking proceedings. FIEC’s request falls squarely within the Commission’s authority under §5 Chapter 313 and is consistent with §3209-A and the Maine Legislature’s goal in granting the Commission authority to waive future NEB benefits in circumstances like those presented here.
Respectfully submitted this 27th day of February 2025.
FOX ISLANDS ELECTRIC COOPERATIVE, INC.
By: /s/ Amy M. W. Turner
Amy M. W. Turner, Chief Executive Officer
Fox Islands Electric Cooperative, Inc.
66 Main Street
P
.O. Box 527
Vinalhaven, ME 04863
(207) 863-4636
ATurner@FoxIslands.net
FOX ISLANDS ELECTRIC COOPERATIVE, INC.
By: /s/ Amy M. W. Turner
Amy M. W. Turner, Chief Executive Officer
Fox Islands Electric Cooperative, Inc.
66 Main Street
P
.O. Box 527
Vinalhaven, ME 04863
(207) 863-4636
ATurner@FoxIslands.net
Views: 38
Comment
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Comment by Stephen Littlefield on March 1, 2025 at 10:40am
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They are doing what the citizens of Maine want (fair billing) not the scam we have now supporting solar and wind developers and getting over priced power in return!
Maine as Third World Country:
CMP Transmission Rate Skyrockets 19.6% Due to Wind Power
Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.
Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT
******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********
(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/
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Hannah Pingree on the Maine expedited wind law
Hannah Pingree - Director of Maine's Office of Innovation and the Future
"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."
https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/
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