New England Ratepayers Association files net metering petition with FERC

By Kim Riley | Daily Energy Insider | April 16, 2020 | ~~

The New England Ratepayers Association (NERA) on April 14 filed a legal challenge with the Federal Energy Regulatory Commission (FERC) on full net metering transactions.

Specifically, NERA requested that FERC declare there is exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter, and order that the rates for such sales be priced in accordance with public law, according to the filing.

“We are not asking FERC to insert its jurisdiction on energy consumed on the customer side of the meter, only that which is exported to the grid and is then resold by a utility, which constitutes a wholesale sale under the Federal Power Act and should be regulated as such,” NERA President Marc Brown told Daily Energy Insider on Thursday.

In New England, Brown said that full net metering (FNM) policies have led to hundreds of millions of dollars in regressive cost-shifts from low- and middle-income families to higher-income families who take advantage of FNM policies, which grossly overpays them for the energy they export.

“Ending these policies will save ratepayers hundreds of millions of dollars in New England and billions of dollars nationwide,” Brown said.

According to NERA’s petition, “the inequities and inefficiencies” of existing FNM rates across the country are increasingly being recognized as both unjustifiable and unsustainable in a world where rooftop solar power has become a growing part of the nation’s energy sector.

“The long-term success of distributed solar as an energy resource must depend on it becoming truly cost-competitive with other resources, and rate reforms to more realistically compensate distributed solar are an important part of making this transition,” according to the petition. “It is clear that the energy price paid for the energy produced by rooftop solar is a matter of serious concern for the wholesale energy markets.”

FERC acknowledged that concern this week when one day after NERA’s filing the commission issued an April 15 notice setting a May 14 deadline for comments. “There is no deadline for commission action on the petition,” FERC spokesman Craig Cano wrote Daily Energy Insider in an email, adding that FERC does not discuss issues raised in pending matters.

In its petition, NERA points out that rooftop solar, through the application of FNM, is being compensated for the intermittent, mostly off-peak, energy it exports to the grid, at the full retail price of electricity rather than the wholesale energy price that all other resources are paid.

In addition, rooftop solar, under FNM – because of being paid the retail price for a wholesale product, and despite its intermittent nature – is being paid for capacity and demand products it does not provide, according to the petition.

“What is especially troublesome is that energy sold from rooftop solar installation includes the full retail price, while wholesale wind and solar units, which provide the same environmental benefits, are only compensated at wholesale rates despite the fact that wholesale wind and solar are both more efficient, both economically and in terms of carbon reduction,” NERA writes in the petition. “That disparity in compensation motivates investors to allocate more capital toward less efficient production and away from the more efficient.”

The result is more expensive rates for other consumers, and it’s also inconsistent with the future of solar energy, says NERA.
“While it is not suggested that the commission look to displace or preempt the states in regard to tariff structure, it would be a very positive step toward protecting the competitive nature of the wholesale market to take action within the scope of its jurisdiction over wholesale prices that would provide the country with fully competitive, non-discriminatory, energy and capacity markets,” according to the petition.

Basically, says NERA, net-metered customers still use the transmission and distribution system to ensure that they have reliable power when they aren’t producing it, but because of net metering they do not have to pay their fair share for the infrastructure that allows them to sell their product. The power for which they are compensated at well-above market (wholesale) rates does not have the attributes of retail power, which is firm, reliable and provides ancillary benefits.

Conversely, net-metered power is non-firm, unreliable and provides no ancillary benefits. And if an electricity circuit has too much solar on it, then the utility must invest additional capital to upgrade the system, pushing more costs onto customers, according to NERA.

“Furthermore, by increasing the amount of intermittent, non-dispatchable power that utilities are required to purchase, higher risk premiums are incorporated into electricity rates – further increasing the cost of electricity to all non-net-metered consumers. This cost shift is on the order of hundreds of millions of dollars across the country every year,” the association says in its filing.

The petition seeks a declaration that any state which sets net metering tariffs above a utility’s avoided cost is preempted by the Federal Power Act and is in violation of the Public Utilities Regulatory Power Act (PURPA), which stipulates that qualifying facilities, like rooftop solar, are to be compensated at the utility’s avoided cost.

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Comment by Dan McKay on April 19, 2020 at 7:54am

This is government forcing us to pay more for an inferior product.


Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power


Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT


(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.”

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Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

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