NREVSP-460-21651 December 1996

Net Metering Programs

Yih-huei Wan

National Renewable Energy Laboratory A national laboratory of the U.S. Department of Energy

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Net Metering Programs

Yih-huei Wan

Prepared for:

Office of Utility Technologies Energy Efficiency and Renewable Energy U.S. Department of Energy �·� - �­ •.....·-� ···� ·�� --· •

�enter for Energy Analysis and Applications Natiomil Renewable Energy Laboratory Golden, Colorado 80401-3393 Operated by Midwest Research Institute for the U.S. Department of Energy Contents

Abstract ...... v I. Introduction...... 1

II. Net Metering Programs ...... 2

Eligi ble GeneratingTechno logies ...... 2

Eligi ble Cus tomer Classes ...... , ..... 2 Individual Capacity Limitations...... 2 Total Generating Capacity Limitations ...... 2 Treatment of Excess Generation ...... 2

Other Features of Net Metering Programs ...... 4

III. Rationale for Net Metering Programs ...... 4

Stakeholder Motivati on ...... 4

Electric Utility Industry Restructuring ...... 5 Legislative Process ...... 5 IV. Impact on Renewable Energy Technologies ...... 6 V. Conclusions and Recommendations ...... 6

VI. Notes ...... 7

Appendix: ...... 9

Arizona's Net Billing Rules ...... 9

California'sNet Metering Law ...... � ...... 9

Colorado's Net Metering Program ...... 10

Connecticut's Net Metering Order ...... 10

Hawaii's Net Energy Metering Law ...... 10

Idaho's Net Metering Order ...... 10

Indiana's Net Billing Order ...... 10

Iowa's Net Billing Order ...... ·.··· ...... 1 0

Maine's Net Metering Program ...... 11

Massachusetts' Net Metering Program ...... 11

Mi nnesota's Net Bi lling Law ...... 11 New Hampshi re's Net Metering Order ...... 12

New Mexico's Net Metering Rule ...... 12 New York's Proposed Net Metering Bill ...... 12

North Dakota's Net Metering Order ...... 13 Oklahoma's Net Billing Order ...... 13

Rhode Island's Net Metering Order ...... 13

Texas' Net Metering Order ...... 13 Wisconsin's Net Billing Order ...... 14

Notes to Appendix ...... 14

Tables

Table 1- Summary of State Net Metering Programs ...... 3

Table 2- California's Net Metering Capacity ...... 9

Table 3 - Iowa's Net Metering Capacity Cap ...... 11

Net Metering Programs • iii Abstract

Therehas been a recent surge of interest fromthe funding. Because more of the cus tomer-generated electric­ renewable energy industry and environmental groups in ity can receive a utility's retail price, it can lower the net metering.1 The reason for this interest is that net economic thresholdof small renewable energy facili ti es. metering is a simple, low-cost, andea sily administered method to encourage di rect customer investment in There are various net metering programs in the renewable energy technologies . The renewable energy country. Most are available to customer-owned small industry supports net metering because it removes an generating facili ties only, some further restrict the eligibi l­ economic disincentive for potential cus tomers by increas­ ity to renewable energy technologies. This Topical Issues ing the value of the electricity generated by renewable Brief discusses how thesenet metering programs have energy technologies. Environmental groups support net been implemented by differentutilities and states, what the metering because it promotes cleanenergy production. rationales are behind many net metering programs, and what the potential impact of net metering may be on the The concept of net metering programs is to allow deployment of renewable energy technologies. the electric meters of customers wi th generating facilities to turn backwards when their generators are produci ng Net Metering Programs was prepared by the more energy than the customers' demand. Net metering Center for Energy Analysis and Applications for the allows customers to use their generation to offsetthei r Office of Utility Technologies (OUT) of the U.S. Depart­ consumption over the entire bi lling period, not just ment of Energy (DOE).The author is grateful for the instantaneously. This offsetwould enable customers wi th support of Joe Galdo of OUT. In addition, Larry generating facilities to receive retail prices for more of the Goldstein, Blair Swezey, JeffFang, Karin Sinclair, Kevin electricity they generate. Wi thout a net metering program, Porter, and Kathleen O'Dell of the National Renewable utili ti es usually install a second meter to measure any Energy Laboratory deserve credits for their comments and electrici ty that flows back to the utili ty grid and purchase editorial contributions. The author also wants to acknowl­ it at a rate that is much lower than the retail prices. edge the following individuals for providi ng information and comments: Thomas J. Starrs of Kelso Starrs & The strength of net metering lies in its simplicity: Associ ates, L.L.C., Michael Tennis of the Union of the use of a single meter. It does not need constant ConcernedSci entists, Les Nelson of California Solar regulatory interaction or supervision afterthe program is Energy Industries Associ ation, Vmcent Schwent of in place. No requirements are made of utilities. It allows CaliforniaEnergy Commission, Joe Bryan of Natural customers to make renewable energy technology choices Resources Defense Council, and Michael Bergey of and only impacts the cus tomer's meter. As a policy Bergey Wi ndpower. Although the issue brief benefits from option, net metering provides economic incentives to the assistance of many, the author alone is responsible for encourage renewable energy technologies wi thout public its content.

Net Metering Programs • v Net Metering Programs

I. Introduction energy storage devices to maximize the value of their generation. They also have more latitude in sizing their Net metering is the practice of using a single generating facilities because they do not have to precisely meter to measure the difference betweenthe total genera­ match the load to minimize excess generation. tion andtotal consumption of electricity by customers with small generating facilities by allowing the meter to Utilities may also benefitfrom net metering. turn backward. Without net metering, small customer­ When customers generate electricity during high system owned generators are usually treated by electric utilities as demand periods they improve a utility's system load other qualifying facilities (QFs) under the Public Utility factor. PV systems are good examples of technologies that Regulatory Act of 1978 (PURPA) and subsequent imple­ improve a utility's system load factor by generating mentation rules by the Federal Energy Regulatory Com­ electricity during high demand periods. By encouraging mission (FERC).2 As QFs, the customers enter a simulta­ distributed customer generation through net metering, neous purchase and sale agreement with the utilities. utilities can also improve their distribution voltage profile and reduce losses. More significantly, under net metering, With a simultaneous purchase and sale agree­ utilities can reduce their administration costs because ment, utilities will install two meters for each QF: one to there is only one meter to read and no special accounting record energy used by the customer and one to record for customers with small generating equipment. energy produced by the customer's generating facilities that flows into the utility grid. Under the two-meter plan, Net metering programs exist because of state if customers who own generating facilities cannot use initiatives. Few non-utility generators existed before the electricity the instant it is generated, the excess electricity enactment of PURPA, and utilities dealt with these will flowinto the utility grid through the second meter. scattered, customer-owned generators (many of them were Customers pay retail rates for the energy they use, and the small wind systems) on a case-by-case basis. PURPA utilities reimburse customers for the energy that flows into encourages cogeneration and renewable energy technolo­ the utility grids at the utility's avoided energy cost.3 The gies by requiring utilities to interconnect with differences between utility'sretail rate and avoided energy cogenerators and renewables and purchase the power cost can be substantial. In some instances, they are as generated by them. When designing regulations to imple­ high as 10 ¢per kilowatt hour (kWh). In addition to ment PURPA and FERC rules, some state public utility lowering the economic value of self-generation, this commissions (PUCs) took the intent of PURPA one step arrangement also makes many customers feel that the further by including net metering as an option for smaller utilities have gained an unfair advantage.4 QFs. For example, in 1981, Arizona Corporation Com­ mission allowed net metering for small QFs of 100 Net metering can increase the economic value of kilowatts (kW) or less, and Massachusetts PUC ordered small renewable energy technologies for customers. It net metering in 1982. allows the customers to use the utility grid to "bank" their energy: producing electricity at one time and consuming it Minnesota was the first state to enact a net at another time. This form of energy exchange is espe­ metering statute in 1983. Since then, 13 additional states cially useful for renewable energy technologies. For have enacted net metering laws or regulations: California, example, a residential customer with a small wind or Connecticut, Idaho, Indiana, Iowa, Maine, New Hamp­ photovoltaic (PV) system would produce electricity when shire, New Mexico, North Dakota, Oklahoma, Rhode the wind is blowing and the sun is shining and consume Island, Te xas, and Wisconsin.5 In addition, one utility in electricity at another time when it is needed. This banking Colorado offers net metering tariffsto their customers ability affords self-generating customers more flexibility. without a commission order or state law. They do not have to alter their consumption or install

Net Metering Programs • 1 This brief is organized in five sections. Section IT owned generators regardless of energy source to be discusses existing net metering programs and how they are eligible for net metering. implemented by utilities and states. The state motivations and rationales for enacting net metering laws or regula­ Eligible Customer Classes tions are examined in Section ill, and Section IV explores the potential impact of net metering on renewables. Two states, California and New Hampshire, limit Section V provides conclusions and recommendations. their net metering programs to a utility's residential customers. Facilities must be customer-owned and II. Net Metering Programs installed on the customer's premises. Programs in other states are available to all customers who meet the QF Today's net metering programs have a number of requirements. characteristics in common that define who is eligible to participate and under what conditions. Several of the Individual Capacity Limitations programs limit the eligible participants to retail customers that own generating facilities using only renewables. Most net metering programs set a limit on allow­ able individual generating capacity. California, and Net metering programs have three sources of Colorado restrict their individual capacities to 10 kW or implementation authority: state law, PUC orders, and less, while Arizona, Connecticut, Idaho, Maine, New individual utility tariffs. The programs required by a state Mexico, North Dakota, and Oklahoma allow QFs and law are applicable to all utilities in the state, regardless of cogenerators up to 100 kW. Most of the otherstates set whether a utility is under the jurisdiction of the state limits within this range. Two states set energy limits for utility commission or not. Only two states have enacted net metering. Indiana has a total generation limit of 1,000 laws to require electric utilities to offernet metering kWh per month. Oklahoma allows 60,000 kWh per year programs: Minnesota in 1983 and California in 1995. for net metering in addition to its capacity limit. Only Public utility commissions in 14 states have issued orders Iowa has no capacity limits on individual installations. requiring utilities to file net metering tariffs: Arizona, Connecticut, Idaho, Indiana, Iowa, Maine, Massachusetts, Total Generating Capacity Limitations New Hampshire, New Mexico, North Dakota, Oklahoma, Rhode Island, Texas, and Wisconsin. Generally, only rate­ In addition to capacity limitations on individual regulated utilities in those states are affected by such instalhitions, three states established limits on the overall orders. One utility in Colorado offered a net metering capacity for each utility. California, for example, limits tariff on their own as part of their guidelines for intercon­ the total generating capacity under the net metering necting small QFs. program to 0.1% of each utility's 1996 peak demand, which amounts to a total of 53.3 megawatts (MWs) Table 1 on the next page summarizes various statewide. Iowa set a statewide cap of 105 MW. Each features of state net metering programs. Detailed descrip­ utility's share of the 105 MW is fixed and is based on its tions of individual state net metering programs are estimated contribution to the state's peak demand. New included in the Appendix. Whether required by state Hampshire set an initial statewide capacity limit of 500 statutes or PUC orders, utilities file special tariffs to kW for net metering. implement net metering programs. Treatment of Excess Generation Eligible Generating Technologies Excess generation occurs when a customer-owned Most net metering programs are available to generator produces more electricity than the customer's customer-owned QFs (cogenerators that meet certain total electricity demandduring a utility's billing cycle. efficiency standards or generators that use renewable The amount of excess generation depends on the size of energy resources). Eligible technologies varyaccording to the load and the installed generating equipment. Most state. For example, California allows only solar energy rooftop PV systems seldom generate more electricity than generating facilities.6 Iowa,? New Hampshire, and Texas that a residence or a commercial building can use during a restrict the eligible technologies to renewables only. On month. However, a residential wind system in a good wind the other hand, Idaho and Wisconsin allow all customer- resource region may produce between 20% to 40% more

2 • Net Metering Programs Table 1. Summary of State Net Metering Prog rams

State Allowable Technology Allowable Customer Allowable Capacity Statewide Treatment of Net Excess Authority Enacted Citation/Reference Limit Generation (NEG) Arizona Renewables only All customer classes of �10kW None NEG purchased at avoided Arizona 1993 Tariff EPR-4 Arizona Public Service cost Corporation Qualifying facilities All customer classes of �lO OkW Commission 1996 TariffsNo. 101 &No. 102 Tucson Electric Power NEG purchased at fixed rate California Solar only Residential ouly �lO kW 0.1% 1996 AnnualizedNEG purchased at Legislature 1995 Senate BillNo. 656 (e ffective 1-1-96) peak avoided cost Colorado Qualifyiug facilities All customer classes of �JOkW None No purchase ofNEG, excess Utility tariff 1994 Safely, Interference and Interconnection Public Service of is granted to utility Guidelines for Cogenerators,Small Power Colorado Producers , and Customer -Owned Generators Connecticut Renewables & All customer classes �50kW for None NEG purchased at avoided PUC 1990 CPUC A No. 159 co generators cogenerators cost � 100kW for renewables Idaho All technologies All customer classes �JOOkW None NEG purchased at applicable PUC 1986 Idaho PUC Order 1116025 retail rate Tariffsheets 86-l thru 86-7 Indiana Qualifying facilities All customer classes � 1, 000 kWh/month None No purchase ofNEG , excess PUC 1985 Indiana Administrative Code 4-4.1-7 is grantedto utility Iowa Renewables All customer classes No limit per system 105MW NEG purchased at avoided PUC 1993 Iowa Administrative Code paragraph 15.11(5) cost

Maine Qualifying facilities All customer classes . �lO OkW None NEG purchased at avoided PUC 1987 Code Me. R.Ch . 36, §I (AX18) & (19). §4(C)(4) cost Massachusetts Qualifying facilities All customer classes � 30kW None NEG purchased at avoided PUC 1982 220CMR §8.04(2){C ) cost Minnesota Qualifying facilities All customer classes � 40kW None NEG purchased at average Legislature 1983 Minn. Stat. §261B.l 64(3) retail utility energy rate New Hampshire Renewables Residential only �25 kW per system 500kW No purchase ofNEG, excess PSC ofNH 1994 PSNH Order No . 21,163 is grantedto utility New Mexico Qualifying facilities All customer classes � 100 kW None I.No purchase of NEG, no PSC ofNM 1988 PSC Rule 570 additional customer charge 2.NEG purchased at avoided cost with additional customer charge North Dakota Reuewables & All customer classes � JOOkW None NEG purchased at avoided PUC 1991 North Dakota Admiuistrative Code §69-09-07-09 col!enerators cost Oklahoma Renewables & All customer classes �100 kW and None No purchase of NEG ,excess Oklahoma 1988 OCC Order 326195 cogenerators � 60,000kWh I year is granted to utility Corporate Commission Rhode Island Renewables & All customer classes � 25kW for larger None NEG purchased at avoided PUC 1985 Supplementary Decision and Order, Docket No . ....� cogenerators utilities cost 1549 s 15 kW for smaller � utilities � ::1. Texas Renewables only All customer classes �50kW None NEG purchased at avoided PUC 1986 PUC ofTcxas , Substantive Rules, §23.66(!)(4) ;g cost ""' Wisconsin All technologies All customer classes �20kW None NEG purchased at retail rate PSC 1993 PSCW Order 6690-UR-107 � for renewables,ayoided cost � for non-renewables I � - ·------��-- Note: Fonnat of this table is similar to the Table 4 in the REPP Issue Brief , September 1996,No. 2, by Thomas J. Starrs .

•

w energy than the load during a utility's monthly billing generators, because costs of meeting them is relatively cycle.8 high for smallfacilities.

Most net metering programs require utilities to Ill. Rationale for Net Metering Programs buy back the excess generation at the utility's avoided cost. In most cases, the buy-back rate includes only the The main reason for states to implement a net utility's fuel cost without a capacity component. Arizona, metering program is to encourage private investment in California, Connecticut, Iowa, Maine, Massachusetts, renewable energy resources. It is worth noting that North Dakota, New Mexico, Rhode Island, Texas, and although only four states explicitly limit the eligible Wisconsin all use this approach for non-renewable generating technologies to renewables while most other generation. states specify QFs for their net metering programs, the low individual system capacity limits set by those states Under California'snet metering program, net makes cogeneration applications impractical for most excess generation may be calculated yearly if both the customers. This in effect constrains the eligible generating local utility and the customer agree to it. Within a given technologies to renewables under their net metering year, excess generation in one month is carried over to the programs. next as a credit. Customers still pay their normal monthly bill if there is no excess generation for the month, but The appeal of net metering arises from its sim­ utilities only issue a payment for excess generation at the plicity: the use of a single (existing) electric meter for end of the year. Annualized energy accounting will customers with small generating facilities. After the practically eliminate the issue of net excess generation for program is implemented, no regulatory interaction or a normal size system and all electricity generated by supervision is needed. As a policy option, it provides customers can be applied to offset their own consumption. economic incentives to support renewable energy tech­ nologies that do not require public funding. Under Idaho's net metering program, utilities buy back excess generation at the applicable retail rate of the Many state legislators and utility regulators customer class. The same is true in Wisconsin, if a realize that customers who have installed or who are customer-owned generator uses renewable resources. In considering the installation of a grid-connected renewable Minnesota, excess generation is purchased at the utility's energy facility are not driven solely by cost consider­ average retail rate. ations. For those customers, noneconomic factors, such as environmental protection and self-sufficiency, also moti­ In Colorado, Indiana, New Hampshire, New vate them to adopt renewable energy. Net metering Mexico, and Oklahoma, utilities that offernet metering provides a financial incentive to those customers by programs do not purchase any excess generation from lowering the economic threshold for small renewable customers. Excess generation, if any, simply flows into the energy facilities. utility grid without compensation. If a customer requests that a utility purchase the power they produce, they are In addition, net metering programs address an treated as QFs under PURPA. They must install and equity issue perceived by many customers under the two­ maintain two meters and establish simultaneous purchase meter arrangement. Customers feel the utilities gain an and sale agreements with the utility. advantage by charging them retail price for the electricity they consume but only paying them lower avoided energy Other Features of Net Metering Programs cost for the electricity they feed into the utility's grid. This situation can impede the market of small wind power All net metering programs require customer­ systems in rural areas.9 owned generating facilities to meet applicable safety and power quality standards established by the National Stakeholder Motivation Electric Code and other standard-setting agencies. Never­ theless, many utilities, with the approval of state utility State legislatures in California and Minnesota, commissions, have established their own electrical inter­ along with many state utility regulators, consider net connection requirements. Some of theserequirements metering programs to be a sound policy option. In addi­ could be an economic barrierto small customer-owned tion to encouraging customer-owned renewable energy

4 • Net Metering Programs generators, their objectives include promoting renewable customer service option. energy, diversifyinga state's energy resource mix, stimu­ lating local economies, and simplifying the procedure and The impact of utility restructuring on net metering reducing the costs of interconnecting small customer­ programs is not clear at present. The California net owned generators. Political leaders in these states are metering law specifies that its net metering will comply convinced that net metering programs have the potential to withfuture restructuring legislatures and PUC orders. achieve these goals with little or no costs to the utility rate However, because of their simplicity,most net metering payers and general public. programs will not likely be affected by the restructuring of the electric utility industry. Regardless of what approach Nevertheless, most utilities still oppose net the industry eventually takes to restructure itself, there metering programs for several reasons. Many do not want will still be a meter for each customer account, and an another state mandate imposed on them. Others fear the entity will have to read the meter, administer the account, revenue losses due to the higher retail rates they have to and provide the customer services. Net metering simply pay for customer-generated electricity. Some utilities allows the meters of customers with generating facilities oppose net metering because of the PURPA requirement. to turn backward so that all the electricity they generate PURPA andFERC rules require utilities to purchase can be used to first offset their own consumption. This is power from qualifyingcogeneration and small power the strength of net metering. It affordscustomer choice production facilities at the utilitiesavoided cost. Utilities and impacts only the customer's meter. No requirements in New York, for example, claim that net metering is a are made of the utilities. violation of PURPA and FERC rules, because it requires utilities to pay higher than their avoided costs for QF Legislative Process generation. In California, one utility claims that net metering programs are a subsidy to customers who install Because of the nature of the political process, and operate their own generators. Others claim there will every net metering program represents some sort of be a loss of actual generation and customer load informa­ compromise reached by various stakeholders during the tion if a large number of customers were eventually to legislative or regulatory processes. Such compromises are participate, because the meter readings no longer represent reflected in limits on facility size, program size, customer the real load of a given area for utilities. Several utilities classes, and allowable technologies. These limits are in New York also oppose net metering legislation on the designed to ensure that thenet metering program will have 10 ground of safety issues. a minimal impact on utilities and rate payers. All existing programs have some or all of these constraints. On the other hand, a few utilities offer the net metering option to customers who own andoperate small Recent legislative activities suggest that although wind and PV systems without a commission order or a effectivecommunication and strong grassroots support are state net metering law. Some utilities support the net necessary for moving a net metering law through the state metering option for renewables because they want to be legislative process, they are not always sufficient to seen as friendly to the environment and responsive to their guarantee its finalsuccess. In New York, a net metering customers' needs and concerns.For other utilities, the initiative led by business and environmental groups extra cost associated with installing and maintaining a including the Solar Energy Industries Association (SEIA), second meter, processing separate accounts, and preparing New York SEIA, independent power producers, the payment checks for small generators is the primary Natural Resources Defense Council, the SierraClub and motivation. others, resulted in a net metering bill passed by both New York State Assembly and Senate. However, utilities did Electric Utility Industry Restructuring not support the legislation and GovernorPataki, citing the safety concernsof utilities, vetoed the legislation. Although most utilities would rather not have a net metering program imposed on them by the state In Hawaii, where electric rates are as high as 20¢ legislature or PUC, their perspective on net metering may per kWh and good solar resources and state tax incentives change as the utility industry enters a more competitive exist, a net metering program would make grid-connected environment. For example, SouthernCalifornia Edison PV systems cost effective. A recent study of niche markets Company decided to offer its net metering program as a for grid-connected PV showed that a break-even cost for

Net Metering Programs • 5 PV systems in Hawaii could be as hi gh as $7.50 per renewable energy generating facili ties is another economi c watt, 11 which is substanti ally hi gher than the current consideration. A recent study of ni che markets for grid­ installed system price of about $6.00 per watt. A true net connected PV systems shows that in all states but Hawaii metering program in Hawaii has the potential to open up the break -even prices for small PV systems are less than · the market for PV. Although the net metering concept $5.00 per watt after considering retail electric rates, receives wi de support in Hawaii, utilities there were able available state tax incentives, and solar resources. The to influence the legislative process and change the pro­ installed cost of a small, gri d-connected PV systems is gram from net metering to a purchase and sale arrange­ currentlyabout $6.00 per watt. The existing net metering ment, signi ficantlylowering its value for small renewable programs have not created a mass market for small wi nd energy systems. system either des pite the current installed cost of $2.50 - $3.00 per watt. IV . Impact on Renewable Energy Technologies 3. Interconnection Requirements. Utilities often es tablish interconnection guidelines requiring additional Net metering programs for small renewable protection equipment and liability insurance that add energy generating systems have been available in some significant cost to small generating faciliti es. The majority states for more than 10 years, but thei r impact on the of state statutes and regulatory orders for net metering do market for renewable energy technologies has been not di rectly specify guidelines for utility tariffs, service limited. Exact numbers are not available because utili ti es contracts, or interconnections. In addition utilities may and state energy offices do not keep accurate records of include large interconnection and servi ce fees as part of net metering participants. Although no hard statistics exist their net metering tariffs.These fees wi ll reduce the about the number of cus tomers and total installed capaci ­ incentives provided by the net metering programs. Two of ties under these programs, the anecdotal information the larger Californiain vestor-owned utilities originally collected for this report suggests that very few customers structured net metering contracts that set a subs tantial participate in net metering programs. monthly customer charge and standby charge on net metering customers. This essentially made net metering It is too early to assess the effect of Cali fornia's unattractive until the Californi a PUC banned the imposi­ net metering law on residential PV installations because ti on of customer charges.12 Existing uti li ty interconnection the law on ly became effective on January 1, 1996. Ana­ guidelines may als o act as a barrier to small net metering lysts expect that, initially, only thos e customers who have customers. For example, one Californiaut ility requires already installed PV systems wi ll take advantage of the overcurrent, overvoltage, undervoltage, underfrequency, new net metering law by switching to the net metering overfrequency, and ground fault sensing devices for non­ tariff. utility generators of 41 kW or larger. For generators of 41 kW or less, only the ground fault sensing device is re­ The fact that there are only a small number of moved from the requirement list. The relative cost of participants in net metering programs can be attributed to meeting those requirements is much greater for small three factors: systems then it is for largersys tems that cannotpartic i­ pate in net meteringpr ograms. 1. Communication. Information on net metering programs has not been made wi dely available, and utilities V. Conclus ions and Recommendations do not actively promote their net metering programs. In many cases, customers are not aware of their net metering Although the impact of net metering programs on options and/or the potential benefits offered bynet meter­ renewable energy tec hnologies has been small to date, ing programs, which make renewables only slightly more programs initi ated at the state level remain an appealing expensive. policy option. The programs enhance economic incentives to th e owners of small renewable energy generating 2. Economics. Low electricity prices and hi gh cos ts facilities wi thoutrequiring any public funding. Their of small renewable energy systems are importantconsider­ attractiveness in hi gh electric rate regions may provide a ations influencing residenti al customer behavior regarding boost for the renewable energy industry in those regions . participation in net metering programs. The lack of di rect Addition ally, net metering programs wi ll become more financi ng available to residential customers to purchase

6 • Net Metering Programs attractive as the cos ts of renewable technologies continue utility power and produce power from their own genera­ to decline. tors at several different locations, aggregate their electric bills from all locations. As discussed earlier, many customers who have installed renewable energy facilities are motivated by 2. Code of Federal Regulations (CFR), Title 18, noneconomic factors. For those cus tomers, cost-effective­ part 292. ness is not measured by break-even cost alone. They are willing to pay a premium for a cleaner environment. 3. The avoided energy cost is the cost to the utility if Nonetheless, economics are importantto many cus tomers the utility would generate the electricity or purchase it and a net metering program can improve the economic from the bulk power market. The avoided cost is much aspect of their decision and affordadditional market lower than the electricity retail rate because it does not opportunities for renewable energy technologies. include the transmissionand distribution cos ts , state and local taxes , and the utility's profits. In general, net metering programs established under state statutes contain more favorable terms for net meter­ 4. Bergey, Michael L.S. "Comments on the Matura­ ing customers than those ordered by state PUCs. For tion and Future Prospects of Small Wind Turbine Tech­ example, the Minnes ota net metering law requires utilities nology," Bergey Windpower Company, Norman, Okla­ to buy back excess generation at average retail rates and homa, presented at the A.S.E.S. Solar '90 Conference, the proposed New York net metering bill will prohibit March 22, 1990. utilities from making additional requirements on controls, tests, and liability insurance. A net metering program 5. Hawaii enacted a statute (Act 205), entitled Net es tablished by state statute allows more customer partici­ Energy Metering, in June 1996. Although entitled "net pation because it applies to all utilities, not just those energy metering," the practice specifiedby the law is under the jurisdiction of the PUC. In addition, net meter­ much differentfrom practices in other states. Hawaii's net ing established under state authority may avoid conflicts energy metering law mandates the use of two meters (one with PU RPA as claimed by utilities.13 to record total consumption and the other to record total generation). Customer generators are billed for the California's net metering law could serve as a model electricitythey use at the utility retailrate, and the utility for other states because it has several desirable features. credits the customer generators for the electricity they The annual accounting of excess energy is most useful to generate at a rate determined by the PUC bas ed on the consumers. With this option, the generating systems can utility's incremental cost of energy. This requirement be sized more precisely to match customer load bas ed on prevents the customers from using generation to offset the annual load factor thus minimizing the excess genera­ their own consumption, thus denying customers the most tion. important benefitof net metering. This situation is no differentfrom the purchase requirement in PURPA and Finally, increasing customer awareness of available FERC rules that mandates utilities purchase power from net metering programs is an importantst ep in increasing QFs. Therefore, it is more appropriate to classify the participation. Many consumers do not know about the Hawaii net metering law as a simultaneous purchase and advantages and availability of net metering programs sale agreement for small customer-owned generators because utilities do not actively promote them. Increased rather than a net metering law. (Starrs, T.J ., Kelso Starrs communication effortsby the renewable industry, utilities, & Associates, L.L.C., letter to Maurice Kaya, Energy state energy offices, PUCs, and advocacy groups could Res ources & Technology Division, DBEDT, July 24, subs tantially increase participation in net metering 1996.) programs, yielding benefits to utilities, customers, and the society at large. 6. Other renewable energy technologies were removed from its net metering bill as one of several legislative VI. Notes compromises , following strong utility opposition.

I. Some states and utilities also use the term net 7. The net metering order by the Iowa State Utility billing to describe net metering. Net billing can apply to Board includes all eligible renewable energy technologies another utility practice in which customers who both take except geothermal.

Net Metering Programs • 7 8. Pe rsonal communication with Michael Be rgey, Bergey Windpower Company,Norman, Oklahoma, January 13, 1997.

9. Pe rsonal communication with Mic hael Bergey, Bergey Windpower Company, Norman, Oklahoma, January 13, 1997.

10. Several utilities consider the solid-state switc hing devices built into PV inverters not ve ry re liable, and they pre fe r the conve ntional hardware switc hes and breakers for disconnecting PV systems whenever a fault occurs in the utility grid. However, utilities would be prohibited by Ne w York's proposed net metering bill from re quiring ne t me tering customers to install any additional control and protection equipment if the net me tering custome r's generation facilities meet all applic able safe ty and power quality standards establishe d by the National Electric Code and theUn de rwriters Laboratory (UL).

11. We nger, H., Herig, C., Taylor, R., Eiffert, P., and Perez, R., "Niche Markets for Grid-Connec ted Photovol­ taics," IEEE Photovoltaic Specialists Conference, Was h­ ington, D.C., May 13- 17, 1996.

12. Energy EfficiencyNews & Views, V2#2, p. 8. June 1996.

13. Starrs, Thomas J. "Net Metering: Ne w Opportuni­ ties for Home Power," REPP Issue Brief, No. 2, Septem­ be r 1996.

8 • Net Metering Programs Appendix solar electrical generating facility with a capacity of 10 kW or less. The solar electrical generating facilities must Arizona's Net Billing Rules be located on the customer's premises and intended primarilyto offsetthe customer's own electricity usage. On July 27, 1981, Arizona Corporation Commis­ The net metering law became effectiveon January 1, sion Decision No. 52345 allowed net meteringfor QFs 1996. The purposes of California's net metering law are (under PURPA and FERC rules) of 100 kW or less. to encourage privateinvestment in renewable energy Excess customer generation would be purchased by resources, stimulate in-state economic growth, enhance utilities at the avoided cost. However, no tariffswere filed energy resource diversity, andreduce utility interconnec­ by the utilities to implement the net metering. In 1993, tion and administrative costs. then ArizonaCorporation Commission Chairman Renz Jennings urged Arizona Public Service Company (APS) to The net meteringlaw of California allows utilities file a net metering tariff. The result was EPR-3, which to either calculate the net energy for a normal billing became effective February 4, 1994. Only three customers periodor annualize the net energy measurement period. If signed up for EPR-3. It was frozen for those customers in the net metering is done over a utility's normal billing 1996 and replaced with EPR-4 which was effective on cycle, the excess energy supplied by the customer-genera­ July 1, 1996. tor will be compensated for at the utility's avoided energy cost. If the net energy measurement is annualized, the EPR-3 limited the eligible technologies to solar customers still pay their normal monthly bill when they energy only, but EPR -4 allows all renewable energy use more electricity than they produce during the billing technologies. All other provisions are identical between cycle. Excess generation, if any, can be carriedover to the EPR-3 andEPR-4. Both tariffslimit the installed capacity next billing cycle as credit. At the end of the annual to 10 kW or less, not the 100 kW permitted under the period, any excess generation fromthe customer-generator 1981 order. A single non-ratcheted meter is allowed to will be purchased by utilities at their avoided energy costs. turn backward to register the net energy consumed or produced during a normal billing cycle. Customers buy In addition to the 10-kW limit on each individual electricity from APS at the standard retail rate for their customer-generator, the total generating capacity owned class. Excess generation is purchased at APS's avoided and operated by eligible customer-generators in each energy cost. No special interconnectionrequirement is utility's service area for net metering is limited to 0.1% of imposed. the utility's peak demand forecast for 1996. Total net metering capacity in California canreach 53.3 MW under In addition, Tucson Electric Power Company this law. The following table lists the maximum net (TEP) filed two tariffseffective March 1, 1996, for power metering capacity of Californiautilities. purchased from QFs with 100 kW or less capacity that included net metering options. TariffNo. 101 is for non­ firmpower purchase, and TariffNo. 102 is for firm power Table 2. California'sNet Metering Capacity purchase. Customers under either tariff can takeservice from TEP at the applicable standard retail rate. Net 1996 Net Metering excess generation, if any, will be purchased by TEP at a Peak Demand Capacity specified seasonal rate: 4.4 ¢/kWh May through October (MW) (MW) or 3.5¢/kWh November through April for TariffNo. 101, Pacific Gas & Electric 17,426 17.0 and 4.84¢/kWh May through October or 3.85 ¢/kWh Northern California Municipals 2,200 2.2 November through April for TariffNo. 102. Sacramento Municipal Utility District 2,556 2.6 California's Net Metering Law Southern California Edison 19,725 20.0 Los Angeles Department of California'snet metering law (Senate Bill No. Water and Power 6,057 6.1 656) requires every utility in the state (whether or not it is San Diego Gas & Electric 3,608 3.6 subject to the jurisdiction of the commission) that offers Burbank, Glendale, Pasadena 787 0.8 residential electricalservice to develop a net metering Others 960 1.0 tarifffor its residential customers who own and operate a California 53,319 53.3

Net Metering Programs • 9 This law bec ame effec tive on Januar y 1, 1996. requirement mandated by PU RPA an d FERCru les . There is not en ough in formation yet to assess its impact on small PV systems in California. On ly residentialcu stomers with solar, wind, or micro-hydro electric en ergy generating fac ilities of 10 kW Colorado's Net Metering Program or less are eligible for Hawaii's net en ergy metering program. Ac t 205 furtherset the total capacity limit under Net metering is not required by th e state, but the the net metering program to 0.1 % of a utility's peak Public Service Company of Colorado has had a net demand. meterin g option for small QFs of 10 kW or less since 1994. The net metering option is spec ified in the Idaho's Net Metering Order company's Safety, In terference an d In terconnection Guidelines for Cogenerators, Small Power Producers, an d Idaho's net metering program has been avai lable Customer-Owned Generators, revised April 1994. A since 1986. The en abling order was Id aho Public Utilities single meter is allowed to run backward to register net Commission Order No. 16025 issued in 1980. The fin al customer consumption or net generation. An y exc ess tariffs implementing the net metering (tariffsh eets 86- 1 generation during the normal billing cycle is granted to the through 86- 7) were approved in 1986. There are no utility without compensat ion. Theco mpany cited reducin g restric tions on generation technologies, but the generating administration an d acc ount costs as the reason for imple­ capac ity must be 100 kW or less. Under Idaho's net menting net metering for small QFs. Less than three metering program, the excess generation is purchas ed by customers are on the net metering program. utilities at the applicable retail rate of the customer class. Because of low electricity rates in Idaho, there are on ly Connecticut's Net Metering Order two customers un der the net metering program. (T he average residen tial rate of ldaho was on ly 5.3 ¢/kWh in Net metering in Connecticut was established by 1995.2 ) the Department of Public Utility Con trol under CPUCA No. 159 and has been effective since 1990. QFs with a Idaho Power Company, an in vestor-owned utility, generating capacity as much as 50 kW-and 100 kW if petitioned the Idaho PUC to abolish the net metering renewable energy resources are used-are eligible for net tariff.The PUC proposed to modify the tariffso that metering. Excess generation is purchased at the utility's utilities can buy back excess generation at the avoided avoided cost. The net metering program in Connec tic ut is cost but has not made a fin al rule on this .3 in ten ded to enc ourage customer installation of renewable el) ergy systems. However, the program does not appear to Indiana's Net Billing Order have had an y effect in promoting small ren ewable en ergy systems in Connectic ut. Currently, there are no customers Net metering is available inIndi an a under the 170 in the net metering program.1 Indiana AdministrativeCode 4-4.1 -7 issued in 1985. QFs that generate less than 1000 kWh per month can request Hawaii's Net Energy Metering Law the net metering option. Exc ess gen er ation is granted to the utilities. If the qualifying facility can generate more Hawaii's net en ergy metering law (Ac t 205) was than 1000 kWh a month, it may request that th e utility en ac ted in June 1996. Hawaii's Net En ergy Metering Ac t purchase its generation, but two meters will be installed to does not allow customer-generators to offset their own measure the production an d usage. The utility will buy electricity consumption directly with one meter. Instead, it bac k the en ergy at the avoided cost. About 20 small win d man dates a two-meter arrangement; on e to measure the power facilities statewide have sign ed up for this pro­ electric ity supplied by the utility an d an other to measure gram.4 the electricity generated by the customer. Customer­ generators will be billed for the electricity consumption at Iowa's Net Billing Order the utility approved retail rate an d the utility will credit the customer generators for the electricity they generate at Net metering is available in Iowa un der the Iowa a rate to be determined by the PUC based on the utility's Administrative Code Paragraph 15.1 1(5), first issued by inc remental cost of en ergy. This practic e is really not the Iowa State Utility Board (!SUB) in 1991. After some much differentfro m that of the QF in terconnection minor revisions, the fin al or der bec ame effec tive on

10 • Net Metering Programs June 23, 1993. Its pu rpose is to en courage alternative regulated utilities according to the utility's es timated en ergy production in Iowa. The order requires rate­ percentage share of lowa's peak demand. Utilities are not regulated el ectric utilities in Iowa to offer parallel opera­ required to pu rchase more thantheir share of the 105 MW tion an d net en ergy metering to qu alifying alternative under this rule. Thefollo wing table lists each utility's en ergy production (AEP) facilities an d qu alifying small share of the 105 MW. hydro facilities. Currently, five in ves tor- owned utilities are subject to this order: Interstate Power Company, Iowa Table 3. Iowa's Net Metering Capacity Cap ElectricLight & Power Company, lowa-lllinois Gas & ElectricCompan y, Midwest Power Company, an d Iowa % Share of SouthernUt ilities Company. Iowa Peak MW

Interstate Power Co. 13.09% 13.5 The qu alifyingAE P facility is defined as an Iowa Electric Light & Power Co. 24.07 25.3 electricity production facility that derives 75% or more of Iowa-Illinois Gas & Electric Co. 12.28 12.9 its primary en ergy in pu t from solar en ergy, wind, waste, Midwest Power Co. 40.29 42.3 agricultural crops an d residues, refuse-derived fuel, or Iowa Southern Utilities Co. 10.27 10.8 wood bu rning. Geothermal is not in clu ded in the alterna­ tive en ergy lis t. QFs under 1978 PU RPA, 18 CFR Part 292, Su bpart B an d small hydro facilities are not pre­ Maine's Net Metering Program cluded from being a qu alifying AEP under Iowa's net billing order, bu t they are not the same. The AE P facilities Net meterin g in Maine has been available since 1987. must en ter in to a contract with the utility to participate in It is ordered by Maine Public Utilities Commission the net metering program. Utilities are obligated to through Code MER. Ch. 36, Sections 1(AJ(18) an d (19), interconnect with the qu alifying AE Ps using a single meter Section 4(C)(4). QFs with a gen erating capacity less than monitoring on ly the net amount of electricity sold or 100 kW can qu alify for the net metering program. Ex cess pu rchased from them. Net meterin g is don e monthly. generation is pu rchased at the utility's avoided cost. There are no limits on how many customers can qu alify-or on Qualifying AEP or small hydro facilities pu rchase total capacity-under the net metering program. electricity from utilities at the tariffed rate. Net excess electricityis sold to utilities at a uniform statewide rate Massachusetts' Net Metering Program based on the utility's avoided cost. There is a kW capacity component and a kWh en ergy componen t in the uniform QFs (un der PU RPA and FERC rules) with a generat­ statewide rate. The kW capacity rate depends on the in g capacity of 30 kW or less are eligible for net metering length of the contractbetw een the qu alifyin g AEP or in Massachusetts. The net metering program was ordered small hydro facilities an d the utilities and is adjustable to by the Department of Public Utilities through 220 Code of a maximu m of $25.15 per kW. It is applied to the monthly Massachusetts Regulation (CMR), Section 8.04(2)(C), in available AEP generating capacity, which is determined 1982. Excess generation is pu rchased at the utility's by dividing kWh delivered to the utility du ring the mon th avoided cost. The in tent of the program is to en courage by number of hours in the month. ThekWh en ergy rate is small power production facilities an d diversify the re­ fixed at $0.0257 per kWh. Alternatively, utilities an d source mix of the state. Very few customers have sign ed qu alifyin g AE P and small hydro facilities may choose to up for the net metering programs. Almost all of them are operate in a simu ltaneous pu rchase an d sale arrangement small cogenerators using diesel engine/generator sets.' under which all electricity produced by the QF is sold to the utility at a fixed or negotiated bu yback rate, an d all Minnesota's Net Billing Law electricity by used the QF is sold to the facility at the utility's tariffed rate (i.e., no net metering). Net metering in Minnesota is au thorized under Section 21 6B .1 64 of the Minnesota Statutes an d Section There is no limit on the installed capacity of 7835.3300 of the Minnesota Department of Pu blic Service in dividual qu alifying AEP or small hydro facilities, bu t Rules. It has been effective since 1983 an d applies to all there is a 105-MW cap on the total alternate en ergy Minnesota electricut ilities, in cludin g cooperative electric generating capacity in Iowa under this order. The associations an d municipal electric utilities. 105-MW capacity cap is divided among the five rate-

NetMetering Programs • 11 The intent of th e Minnesota net metering law is to New Mexico's Net Metering Rule give the maximum possible encouragement to cogenera­ tion and small power production, consistent with protec­ Net metering in New Mexico is authorized by the tion of the ratepayers and the public. QFs under FERC New Mex ico Public Service Commission Rule 57 0 CP R 18, Part 29 2, with a capacity of 40 kW or less, are governing the interconnection of cogeneration and small eligible for net metering. Net excess generation during the power production facilities that meet the criteria for QFs normal billing cycle is purchased by utilities at the under FERC CFR Title 18, Part 29 2.203. It is an option average retail energy rate. for QFs with a capacity of 100 kW or less that primarily intend to serve their own loads (called load displacement Nongenerating utilities that have a sole-source option). There will be no additional customer charge for contract with a municipal power agency or a generation this option. However, utilities will not pay for any ex cess and transmission utility may treat its purchase of any net energy produced by the QFs. Another option under Rule input from QFs under the net metering law as being made 57 0 is to install two meters to calculate net energy con­ on behalf of its supplier. The supplier shall reimburse the sumed or supplied by the QFs. The QFs will be paid for no ngenerating utility for any additional costs incurredin excess energy at the utility's energy rate only. An addi­ making the purchase. tional customer charge to cover the added costs of billing and administration will be included in th e tariff. Rule 57 0 There is no restriction on total capacity under has been in effect since June 30, 19 88. The number of Minnesota' s net metering law, but only a few small hydro customers participating in the net metering program is facilities and wind turbine operators have signed up for it. unkn own. It is estimated to be. extremely small.6

New Hampshire's Net Metering Order New York's Proposed Net Metering Bill

InNew Hampshire, net metering is available for QFs New York' s net metering bill (an act to amend the (under PURPA and FERC rules) if it is mu tually agreed to public service law) was passed by the New York Assem­ by the utility and the affected QF (DE 80- 24 6, Supple­ bly in May 1996 but was vetoed by the governor in mental Order No. 14,797, March 20, 19 81). It is prima­ November 1996. The bill would have established a net rily for QFs that intend to offset their own consumption metering program for the utility's residential customers with generating facilities and is handled on a case by case who own and operate solar electric generating facilities of basis. not more than 10 kW. It limited the total installed solar electric generating capacity to 0. 1% of each utility's 1997 The net metering program for residential customers in peak demand as forecasted by the Public Service Commis­ New Hampshire is called net energy billing and is avail­ sion (PSC). The capacity limit was to be reviewed by the able only to customer-owned renewable energy facilities PSC in 2005 to determine whether it should be increased of 25 kW or less. The program was ordered by the New in the future. (The 1997 noncoincidental peak demand Hampshire PUC on April 1, 1994 (Order 21,163 PSNH). forecast for New York state is 29 ,691 MW.) The order further restricts th e total installed generating capacity in New Hampshire under the net energy billing New York's bill would have required all utilities in program to 500 kW. Net billing can be done with a single th e state (investor- owned, publicly owned, municipally meter or two meters. In the event of dual meters, the owned, and cooperatives) to offernet metering programs customer will be required to provide a suitable socket to to eligible customers and that they not impose any charges permit the utility to install a second meter. The utility wi ll or fees not imposed to other non-net metering customers. not pay the customer for ex cess generation in any billing Furthermore, the bill specifically stated that if the residen­ period, nor will such ex cess generation be credited toward tial solar generation facilities met all applicable safety and future monthly bills. It is estimated that there are 16 power quality standards established by the National customers with 15 8 kW of renewable generation th at ElectricCode and the Underwriters Laboratories (UL), qualify for the net energy billing program in New Hamp­ then utilities could no t require th e net metering customers shire. to install additional controls, perform or pay for additional tests, or purchase additional liability insurance. This was a unique feature of New York's net metering bill.

12 • Net Metering Programs In addition to prohibiting utilities from imposing extra tw o meters to register generation and consumption charges and requiring additional equipment, New York' s separately. The utility buyback rate is based on avoided net metering bill also required the utilities to annualize the cost. period during which the net energy measurement was calculated. If the customer-owned solar generating facility Although all renewable energy sources are eligible for produced more electricity than it consumed during one the net metering program, only wind generatingsystems month, the excess generation would have been carried have been connected. Ok lahoma Electric Cooperative, the over to the next month as a credit. At the end of the largest distribution REA cooperative in Ok lahoma, has 21 annual period, the utilities would have purchased any wind power generators, rangingfrom 1 kW to 20 kW, remaining excess generation at the utility's avoided cost. connected to its system with the net billing arrangement. Customer generations rarely exceed their consumption.? North Dakota' s Net Metering Order

Net metering has been available in North Dakota Rhode Island's Net Metering Order since 1991 under the North DakotaAdministration Code, Section 69-09- 07-09. Customer-owned renewable energy A net metering program for customer-owned small generators or QFs under 100 kW are eligible. Utilities are renewable generating facilities and cogenerators has been to install a single meter to measure the net electricity available in Rhode Island since 1985 under the Public consumption or production of such customers. Excess Utility Commission Supplementary Decision and Order, generation by customer-owned generators will be pur­ Docket No. 1549. The program' s original purpose was to chased by utilities at the avoided cost. There is no limit on encourage small wind generators, but customers with the total capacity under the net metering program. renewable energy generating facilities are eligible for net metering. Excess generation during the normal billing Ok lahoma's Net Billing Order cycle is purchased by the utility at the avoided cost. There are four investor-owned utilities in Rhode Island. Tw o of Net metering has been available in Ok lahoma since them, Blackstone Valley Electricand Narragansett 1988 under the Ok lahoma Corp orate Commission Order ElectricCompany, are considered larger utilities. Custom­ 326195. Utilities under the jurisdiction of the Ok lah oma ers of the larger utilities can install renewable generating CorporateComm ission (investor- ow ned utilities and facilities with a capacity of as much as 25 kW and still Rural Electric Administration [REA] cooperatives) are qualify for the net metering. Block Island Power Company required to fi le a net billing tariff for customer-owned and Newport Electric Corporation are considered smaller renewable energy generating facilities rated 100 kW or utilities for the net metering program. Customers of the less. smaller utilities can only install facilities with as much as 15 kW of renewable energy generating capacity for the net For eligible customer-owned generating facilities, metering program. Since the order became effectivein utilities must allow parallel operation with a single meter 1985, only a few small wind generators have signed up for to register the net energy consumed. Other than industry the program. standard protection devices and normal customer charges that apply to all customers in the same class, utilities are Texas' Net Metering Order not allowed to mak e additional requirements or extra chargesfor the interconnection of the customer-ow ned Net metering is ordered by the Public Utility Commis­ generating facilities. However, utilities are not required to sion of Texas under Substantive Rules, Section purchase any electricity from customers under the net 23.66(f)(4), which became effectivein 1986. The order billing program. Meters are read monthly. Excess genera­ requires utilities to offer a net metering option to QFs of tion, if any, is granted to the utilities. There is no limit on 50 kW or less, using renewable energy resources. Utilities how many customers can participate in this program, nor will install a single meter for such customers and allow a cap on the total installed generating capacity under the the meter to tum backward to register the net energy net metering program. consumption or production by the customers. Net con­ sumption is billed at the applicable tariff and excess Customers can require utilities to purchase the generation by the customers during a billing cycle is electricitythey generate. In this case, utilities will install purchased by utilities at the avoided cost (fu el cost only,

Net Metering Programs • 13 no capaci ty component). Texas initiated the net metering program 10 yearsago to promote small wind power and 3. Tony Jones, Idaho Public Utilities Commis­ PV markets in the state. There is no statewide li mit on the sion, telephone conversation, August 19, 1996. number of customers or total capacity under the net metering program. There are app roximately 25 small wi nd 4. Jerry Webb, Chief Engineer, Indiana Utility generators currently under the net metering program. Regulatory Commission, telephone conversation, August 1, 1996. Wisconsin's Net Billing Order 5. Theo MacGregor, Massachusetts Department Net metering in Wi sconsin is authorized by Public of Public Utili ti es, telephone conversation, August 19, Service Co mmission of Wi sconsin (P SCW) Order 6690- 1996. UR-107, issued December 29, 1992, and effectiveJa nuary 1, 1993. The order app li es to all utilities under the juris­ 6. John Curl, New Mexico Public Service di ction ofPSCW. Wi sconsin's net metering applies to all Commission, July 30, 1996. customer-owned electric generation facilities that are interconnected with the utility's power supply, are rated at 7. Paul Enouen, Engineeri ng Manager, Okla­ 20 kW or less, and have entered into a parallel generati on homa Electric Cooperative, telephone conversation, July contract with the utility. If a customer has more than one 31, 1996. generator, the generator's ratings shall be summed. This sum shall not exceed 20 kW.

Energy flowing from the customer's generation faciliti es into the electrical system of the utili ty shall be permitted with the utili ty's electric meter allowed to run backward. Ifthe amount of energy supp li ed to the utility exceeds the amount of energy consumed, the customer wi ll receive a credit on hi s monthly bill equal to the net excess ki lowatt-hours of energy received by the utility multiplied by the Energy Credit Rate, including any applicable adjustment for cost of fuel, or the customer will receive a check for this amount issued by the utility. Any credits to the customer shall be reduced by the monthly customer charge of the standard app li cable rate schedule. Actual issuanc e of a check payable to the customer shall not occur until the amount due the customer exceeds $25. For customers with ti me-of-use rate, a second ti me-of-use meter has to be installed and the on-peak purchases and sales wi ll be netted separately from off-peak purchases and sales. For renewable resource generators, the energy credit rate is the customer's retail rate. For nonrenewable resource generators, the energy credit rate is the utility's avoided cost (PG-2 rate).

Notes to Appendix

1. Mark Quinlan, Rates Di vi si on, Connecticut Department of Public Utilities, telephone conversation, August 12, 1996.

2. Energy Information Admini stration, Electric Power Annual l995, Volume 1, July 1996.

14 • Net Metering Programs Topical Issues Brief-9603 DE97000090

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