Solar net metering changes could harm US market, affect energy storage

New York — Supporters of net metering policies are concerned that a petition to federal regulators from the New England Ratepayers Association, if granted, would devastate the retail solar power market across the US, with potential impacts on energy storage resources as well.

In comments filed with the Federal Energy Regulatory Commission (EL20-42) in accordance with a June 15 deadline, a group of solar generation investors said the NERA petition proposes the commission directly insert itself into "numerous purely retail supply and even self-supply arrangements, over which the commission has no legal basis to assert jurisdiction."

Net metering programs allow customers' retail electricity bills to be credited for generation from rooftop solar or other behind-the-meter resources that exceed their on-site needs. FERC determined in 2001 and reaffirmed in 2009 that as long as a customer's load during the retail billing period was more than the credited excess generation, there was no FERC-jurisdictional sale.

The debate unfolding over NERA's petition for a declaratory order to FERC centers on whether or not the commission has jurisdiction over state-level net metering policies.

The net metering provision of the Energy Policy Act of 2005 is "unambiguous in delegating net metering responsibility to the states and contains no provisions suggesting that FERC would retain a role in determining how to credit consumers for excess electricity generation," Greg Dotson, a University of Oregon School of Law professor, said in comments submitted to FERC.

However, NERA has asked FERC to declare that any state which sets net metering tariffs above a utility's avoided cost is preempted by the FPA and is in violation of the Public Utilities Regulatory Power Act, which stipulates that qualifying facilities like rooftop solar are to be compensated at the utility's avoided cost.

NERA responded to a comment request by directing S&P Global Platts to its petition and related press release.

"NERA has consistently argued that full net metering policies are socially regressive and overcompensate distributed generators at the expense of all other electricity consumers," Marc Brown, president of NERA, said in the release.

Market impacts

"I am extremely worried about the impacts of the petition on the solar market across the US, which would be devastating," Nathan Phelps, regulatory director at policy advocacy group Vote Solar, said in a phone call.

Dotson said the petition would "disrupt state efforts to develop, implement, and adjust carefully crafted well-considered net metering policies."

It is interesting that the petition did not mention energy storage, Phelps said, but it appears there could be an impact on resources beyond solar and particularly storage. Grid services where electric vehicles discharge to the grid or stand-alone storage systems that discharge could be affected by the petition, Phelps said.

There is also uncertainty regarding the degree to which the petition if granted, would impact state-level replacement programs like the Valuing Distributed Energy Resources proceeding in New York that developed a more sophisticated approach to valuing electricity sold back to the grid from DERs.

"It is unclear whether replacement programs like VDER in New York would be impacted," Phelps said. Vermont's feed-in tariff is another example. It would depend on the language in the order.

"This creates a great deal of uncertainty," he said.

Transparency

NERA says on its website that its membership is made up of New England based individuals and businesses who are concerned about high utility costs and their impact on economic growth, but it does not disclose its supporters without their express permission.

Advocacy group Public Citizen filed a motion with FERC June 15, arguing that NERA "might be a phony consumer group," based on tax records that shed light on its funding sources.

The documents showed that 15 entities have donated between $5,000 and $20,000 a year to the organization and that such funding is "more representative of an industry trade association than a consumer group defending the interests of households," Public Citizen said in a statement.

"Low-income families cannot afford to make $5,000 or $20,000 annual contributions to ratepayer associations," the group said while urging FERC to reject the petition, which it said threatens the public interest.