Published on June 19, 2020 by Kim Riley
Several national groups on June 15 filed comments in support of the New England Ratepayers Association’s (NERA) legal challenge of full net metering transactions.
NERA in April filed a petition requesting the Federal Energy Regulatory Commission (FERC) “declare that there is exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter.” NERA also wants FERC to order that the rates fall under federal purview, contrary to the current standard that places these programs under state authority.
The Competitive Enterprise Institute (CEI), a public policy organization that advocates for free markets and limited government, supports NERA’s stance and specifically asked FERC to exercise its jurisdiction over wholesale electricity sales to eliminate unlawful ratepayer subsidies to distributed generation from rooftop solar units, according to its filing.
“We are particularly concerned about government interventions in the marketplace that may potentially result in serious harm to consumers, are fundamentally unfair, or exceed the legal authority of federal or state agencies,” wrote CEI Senior Fellows Marlo Lewis and Ben Lieberman.
Retail net metering also is unlawful under the Federal Power Act and the Public Utility Regulatory Policies Act (PURPA), according to CEI.
“FERC has jurisdiction over electric transmission and wholesale power sales in interstate commerce, not retail sales within state boundaries,” according to CEI’s filing. “Because utilities compensate NEM [net energy metering] participants at retail prices, the transactions appear to fall within the jurisdiction of state legislatures and public utility commissions.”
But, CEI added that compensating wholesale sales at retail prices does not change the nature of the transaction. “NERA correctly argues that the sale of electricity from a homeowner to a utility, which in turn resells the electricity to other customers, is, by definition, a wholesale sale,” according to its filing. “Thus, such sales are within FERC’s regulatory jurisdiction.”
Similar support came from Tim Andrews, executive director of the Taxpayers Protection Alliance (TPA), a nonpartisan, non-profit taxpayer and consumer advocacy organization.
“Despite TPA’s strong support of the fundamental principles of federalism and devolution to the states, such a decision would nevertheless be in line with a correct application of federal law, which designates wholesale energy sales as under the purview of FERC,” according to TPA’s filing.
Approval of NERA’s petition by FERC also would be in the public interest because it would provide certainty to utility providers, ensure a level playing-field with resulting benefits in capital allocation and environmental investments, and bring immediate relief to consumers, ratepayers and taxpayers around the country, TPA argued.
Please continue reading at:
Boston organization challenges validity of state net metering laws
Bruce Mohl Jun 16, 2020
.............The New England Ratepayers Association, an organization whose financial backers are unknown, filed a petition with the Federal Energy Regulatory Commission on April 14 challenging a billing practice called net metering, which is used in 45 states, including Massachusetts.
Here’s how net metering works for a homeowner with solar panels on the roof. When the sun is shining, the homeowner produces electricity, which is used to run the lights, the TV, the refrigerator, and everything else that runs on power. When the solar panels don’t generate enough energy to meet the house’s power needs, electricity is brought in via the meter from the local utility. When the solar panels generate more power than is needed, the excess electricity flows out to the power grid and from there is distributed to other customers who need it.
Each month, these inflows and outflows of energy are netted out. If the homeowner uses more electricity than he produces, he pays his local utility for the energy he consumes just like any other customer. If he produces more electricity than he uses, the utility pays the homeowner for the energy that flows into the grid and is resold.
In most states, the utility pays the homeowner the retail price of electricity, which is the same price that the utility charges customers for the power it sells. The retail price includes the cost of the power itself, which is purchased from power plants via wholesale markets, as well as a lot of other charges related to transmission, delivery, billing, and a host of state-mandated assessments designed to promote clean energy development. The retail price of electricity in Massachusetts is around 20 cents a kilowatt hour, while the wholesale price – the cost of the power alone without all those other charges – ranges between 2 and 8 cents.
In its filing with the Federal Energy Regulatory Commission, the New England Ratepayers Association argues that homeowners with solar panels on their roof are essentially mini-power plants selling energy to the grid and therefore should be compensated at the much lower wholesale rate instead of the retail rate. “In these circumstances, energy is being delivered to the local utility for resale to the utility’s retail customers for compensation, making the transactions wholesale sales in interstate commerce,” the filing says, pointing out that the transactions should be regulated by federal, not state, law.
The filing has provoked an enormous backlash, with US senators, state attorneys general, hundreds of environmental groups, and the solar power industry pressuring FERC to deny the association’s petition. Attorney General Maura Healey is leading the charge, arguing in a press release issued on Monday that approval of the petition could deprive states of a vital clean energy program and place an estimated 240,000 jobs at risk.
“Net metering is a smart, consumer-focused program that saves customers money on their electricity bills, and supports our state’s thriving $13.2 billion clean energy economy,” Healey said in a press release. “We won’t allow this meritless petition from a shadowy lobbying firm to take away decades of precedent and undermine the progress our states have made toward meeting our climate goals and saving money for our ratepayers.”
Healey neglected to mention that net metering saves money primarily for ratepayers who have solar panels on their roofs. Ratepayers without solar installations probably end up paying higher electric bills because utilities are allowed to recover the cost of net metering from all of their customers.
Ashley Brown, executive director of an electricity policy group at Harvard’s Kennedy School of Government, describes this effect of net metering as “Robin Hood in reverse” in a report attached to the New England Ratepayers Association filing.............................................
The association’s executive director, Marc Brown, is a New Hampshire resident who works as director of government affairs at a lobbying firm called Advantage Government Affairs, according to Roll Call. Brown told CommonWealth in 2013 that he founded the association to fight the false promises of alternative forms of energy. He opposed Cape Wind, backs natural gas development, and, according to the CommonWealth story, runs an ice cream shop in Kingston, New Hampshire.
“We use a lot of electricity in what we do,” said Brown in 2013. “Some of these policies are just plain bad for businesses like mine. There comes a point when you just have to ask, ‘When is enough enough?’”
Please read the full article at:
Fair Use Notice: This website may reproduce or have links to copyrighted material the use of which has not been expressly authorized by the copyright owner. We make such material available, without profit, as part of our efforts to advance understanding of environmental, economic, scientific, and related issues. It is our understanding that this constitutes a "fair use" of any such copyrighted material as provided by law. If you wish to use copyrighted material from this site for purposes that go beyond "fair use," you must obtain permission from the copyright owner.