Ahead of review vote, Pennsylvania agencies at odds over net metering changes

Dive Brief:

  • The Pennsylvania Independent Regulatory Review Commission is expected to vote today on new limits to the state's net metering program, restricting the size of systems that can receive full retail rate credit, in an effort aimed at merchant generators who might impersonate customer systems.
  • The state Department of Environmental Protection is opposed to those changes, saying they are unnecessary and put new limits on a successful renewable program.
  • The new language would require that net metered distributed generation systems “be sized to generate no more than 200% of the customer generator’s annual electric consumption.”

Dive Insight:

Pennsylvania's Independent Regulatory Review Commission will vote today on rules the Public Utility Commission finalized in February, opening up the chance for a last challenge to the new limits on net metering systems.

The PUC previously voted 3-2 to allow utility customers with distributed generation to produce up to 200% of their annual electricity consumption and receive retail rate electricity prices for electricity they send back to the grid. 

The rule aims to prevent merchant generators from receiving the benefits of net metering under the guise of being customer-generators, but the state's Department of Environmental Protection argues the new limits are unnecessary and a hindrance.

"While we appreciate the concerns raised by the PUC in this regard, we believe that the system size
limitations in the [Alternative Energy Portfolio Standards] were selected by the legislature for this very purpose, and provide the necessary backstop to prevent merchant generators from taking advantage of the program," DEP said in comments filed May 10. "A further limit on the ability to benefit from net metering is not authorized by law."

Currently, "customer generators" under the AEPS law are restricted to “nameplate capacity of not greater than 50 kilowatts if installed at a residential service or not larger than 3,000 kilowatts at other customer service locations.” Exceptions were made in limited instances, allowing systems of up to 5,000 kilowatts to qualify as customer-generators.

In the DEP letter, Secretary John Quigley said that concerns about merchant generators taking advantage of the program are already addressed by caps on the program, and that changes to that policy should come from the legislature, not regulators. He noted that Pennsylvania in 2015 installed less than 5 MW of new solar PV capacity, "even as surrounding states install hundreds of megawatts per year." 

“Concerns about net-metering customers imposing significant costs on other customers are entirely illusory,” Quigley wrote, noting that net metering accounted for less than 300 MWh of generation in 2014. "Pennsylvania is very far from the threshold at which the legislature might need to consider action."

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Filed Under: Distributed Energy Regulation & Policy
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