States Tackle Net Metering

On the topic of grid modernization, perhaps no issue is as active, or as contentious, as net metering.  In general, net metering allows retail customers who generate their own energy (typically residents with rooftop solar panels) to be compensated for transferring excess generation back to the grid.  The controversy stems from questions about how much these customers should be compensated and whether, or how, these customers should pay for their use of the grid.  These questions are playing out in states across the country, including in legislatures, public utilities commissions, and courts.  Some recent developments include:

Arizona.  In Arizona, the issue of net metering has been especially contentious for years, and there’s no indication it’s going away anytime soon. Currently the Arizona Corporation Commission is considering a general rate application of UNS Electric, Inc. This application includes residential demand charges, designed to recover fixed costs based on customers’ use of the grid, which has attracted opposition from solar advocates, such as the Alliance for Solar Choice, and support from the dominant utility in Arizona, Arizona Public Service.  Sessions for public comments are scheduled for later this month.

California.  In California, several entities, including utilities, are seeking rehearing of the recent decision of the California Public Utilities Commission (CPUC) that largely continues the existing net metering program and orders utilities to pay retail rates for energy exported back into the grid. Central to these rehearing requests is whether or not the CPUC’s decision complied with the state legislature’s 2013 requirements in state law A.B. 327, particularly those requiring the CPUC to evaluate the costs and benefits of net metering. The CPUC has discretion over whether to grant rehearing, and parties will also be able to seek judicial review after the CPUC either denies rehearing or issues a decision on rehearing.

Florida.  The issue of net metering is currently pending before the Florida Supreme Court. A ballot initiative to amend the Florida Constitution would establish a constitutional right for customers to “own or lease solar equipment installed on their property to generate electricity for their own use”; however, it also contains a provision “to ensure that consumers who do not choose to install solar are not required to subsidize the costs of backup power and electric grid access to those who do.” Some supporters of net metering, who failed to get a competing solar-related amendment to qualify for the 2016 ballot, claim that this amendment would actually obstruct renewable energy in Florida.  Last week, the Florida Supreme Court heard oral arguments as part of its review of whether the proposed amendment can appear on the 2016 ballot. The court must determine whether the proposed amendment addresses only one issue, as required by the Florida Constitution, and whether the ballot language is misleading.

Hawaiʻi. In October 2015, the Hawaiʻi Public Utilities Commission issued a decision and order implementing major reforms to net energy metering (NEM). While existing NEM customers can still receive retail rates for energy they export and are not subject to these changes, new customers will have to choose between two options: a self-supply option and a grid-supply option.  Under the self-supply option, customers would be able to use solar to meet their own energy needs and be permitted to export a limited amount of energy to the grid, but they would not be compensated for any export.  Under the grid-supply option, customers would be able to export excess energy to the grid in exchange for energy credits that are worth less than those available to existing NEM customers.  The Alliance for Solar Choice challenged this order, arguing that the Hawaiʻi Public Utilities Commission failed to follow proper procedures. Recently a Hawaiʻi Circuit Court judge dismissed this challenge.

Nevada.  Net metering has been such a hot topic in Nevada that it has attracted the attention of several 2016 presidential hopefuls. In December, the Nevada Public Utilities Commission issued an order that decreased the rate paid to consumers who export power back into the grid. In January, the Commission rejected requests to stay the order, but later that month reopened the proceeding on the issue of whether existing customers’ rates would be grandfathered.  Then in February the Commission rejected requests to grandfather existing customers’ rates and ordered that new rates to be implemented gradually over a twelve year period.  In response, a new Nevada group has formed to attempt to get a net metering-related petition on the November 2016 ballot.

New Hampshire. The New Hampshire House of Representatives recently passed a bill that would raise the cap on net metering from 50 megawatts to 100 megawatts.  The New Hampshire Senate had previously passed a similar bill increasing the cap to 75 megawatts, and now Governor Hassan has urged the Senate to concur with the House version.

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