PORTLAND, Maine — Lawmakers on Tuesday directed state utilities regulators to study and create a new way to reimburse homeowners or businesses that generate a portion of their own electricity.

LD 1263 picked up the two-thirds majorities in the House and Senate Tuesday afternoon to override a veto from Gov. Paul LePage, who blocked the bill alongside a batch of others he said the Legislature passed too hastily.

The bill started the session as a major expansion of the current incentives for solar and other distributed power generation in the state and was amended as directing the Maine Public Utilities Commission to put together a new policy for small-scale generators.

The current system gives customers who generate their own power a credit on their bills at the standard retail rate, which is known as “net metering.”

Tim Schneider, the public advocate representing ratepayers in utilities cases before the PUC, helped lead the bill toward a study of alternatives to net metering, starting with a proposal his office issued earlier this year. That proposal will form a starting point for the PUC’s study.

Schneider said net metering can create unfair costs for other power customers as more net-metered capacity comes online.

“As net-metered customers invest in self generation and reduce their electricity bills, non-net-metered customers must pick up a greater share of the overall costs to deliver energy,” the proposal from his office states.

Schneider said that problem becomes more severe as more people start generating their own power and putting electricity back into the grid.

“I think most people agree that net metering creates problems when it gets to scale,” Schneider said.

State law calls for regulators to review that system as soon as net-metered capacity becomes 1 percent of energy consumption through either Central Maine Power Co. or Emera, which is expected to happen later this year.

“If you want to get beyond 1 percent, you need a policy that can support that,” Schneider said.

Assistant House Majority Leader Sara Gideon, D-Freeport, said Tuesday that she supported amendments to her original bill in order to get ahead of the conversation to come about the state’s net metering policy.

“We had to think about the political realities of where we are,” Gideon said, noting net metering could come under review as early as this fall. “We have just this one policy that encourages solar energy and that is in a position where it might not last if we don’t take proactive steps.”

Gideon, who sponsored Legislation this session to reverse what she has called the PUC’s incorrect interpretation of a 2013 energy bill, said that she does not have concerns about handling the study process through the commission.

Democratic leaders on the Legislature’s energy committee said earlier this year that there was a “crisis of confidence” around the PUC, after it decided to review the terms of two long-term wind power contracts and that a missing “and” reduced the total possible state funding for building efficiency programs by about $36 million.

“The beauty of the process as it’s laid out is that it allows the stakeholders to continue to be involved,” Gideon said. That group includes utilities, environmental groups, solar installers and the Office of the Public Advocate.

Schneider said the approach outlined by his office — creating a central purchaser for solar power and installing new equipment to track real-time output information for distributed power resources — would be unique.

“It’s totally different than anything any other utility is doing,” he said.

The PUC has in other ways made moves toward studying how the state’s power transmission and distribution systems should adapt to incorporate small, distributed power generation resources.

Also on Tuesday, the PUC solicited comments on what it should require in proposals to create a smart-grid coordinator that would oversee Maine’s distributed generation projects — such as a pilot project on the Boothbay peninsula.

Utilities and regulators are considering those types of projects as a way to avoid costly upgrades to transmission lines that connect areas to power from the region’s major generators.

The bill that on Tuesday cleared the House 119-28 and the Senate 32-3 calls for the PUC to submit a report detailing its proposal for an alternative to net metering by Jan. 30, 2016.

Darren Fishell

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.