FERC Quashes Proposal to End State Net Metering Programs

Yesterday the Federal Energy Regulatory Commission (FERC) dismissed a proposal that called for the end of state net-metering programs.

The petition came from the New England Ratepayers Association (NERA), an organization that refused to identify its financial backers, and drew significant criticism from the solar industry, environmental activists, and state officials. The petition called for FERC to include ratepayer generation of solar power as wholesale generation and make it subject to FERC regulation, effectively ending one of the most successful incentives for rooftop solar adoption.

State net metering programs allow ratepayers with solar panels on their property to send unused power generated from the panels (often during the workday) back into the grid. Utilities then give them a credit on their electric bill for the contribution to the grid. In the absence of home energy storage, that energy would otherwise not be utilized. With net metering, panel owners can reduce their reliance on the grid and accumulate credits that may even make their “net” monthly bill negative. Many states require that utilities offer these programs.

From coverage in Greentech Media:

Members of Congress, including former Democratic presidential candidate Sen. Elizabeth Warren, filed a letter arguing that federal law “makes clear that Congress intended for net-metering programs to fall under state jurisdiction, not FERC’s,” and that granting NERA’s petition “would overturn long-held precedent and give the federal government decision-making power that has long belonged to the states.”

FERC Unanimously rejected the petition, but did not discuss the legal issues behind the decision.

From Commissioner McNamee’s concurrence statement:

Though I support the Commission’s Order dismissing, on procedural grounds, New England Rate Payers Association’s (NERA) Petition for Declaratory Order (Petition) concerning net metering, I write separately to make clear that today’s Order does not address any of the important, substantive issues underlying the Petition.

To that end, the Commission’s Order is not a decision on whether the Commission lacks jurisdiction over the energy sales made through net metering; nor is it a decision on the merits of the issues raised by and contained in the Petition. I also note, that as a general proposition, I think it is best to decide important legal and jurisdictional questions, like the ones raised in in the Petition, when applying the law to a specific set of facts, such as in a Section 206 complaint, or through a rulemaking proceeding.

Useful Links:

Previous Coverage on Conduit Street: Frosh Opposes Proposed End to State Net Metering Programs

FERC Dismissal Order

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