What’s going on at the Federal Energy Regulatory Commission and what could it mean for Wisconsin’s renewable energy market?
An upcoming decision by the Federal Energy Regulatory Commission (FERC) has the solar industry, legislators, clean energy advocates, and state regulators extremely worried over the viability of solar power for homeowners and businesses.
The New England Ratepayers Association (“NERA”) has petitioned the FERC to take control over net metering policy for the entire country. If the petition is granted, states would lose the ability to set policy on solar electricity generated by utility customers. NERA’s petition has sparked widespread opposition from states, legislators, individuals and renewable energy businesses. Attorney Generals from 15 states, including Wisconsin’s own Attorney General Josh Kaul, submitted a protest in opposition to the petition.
What inspired 15 attorney generals, three governors, and state officials from across the political spectrum to engage in a federal energy policy debate?
For almost 40 years, states have had the authority to design and implement net metering policies. The NERA petition aims to reverse this long-standing precedent and eliminate Wisconsin’s ability to tailor utility net metering services to best fit local conditions.
What is net metering?
As defined by the Solar Energy Industries Association, net metering is a billing mechanism that credits PV system owners for the electricity they add to the grid. For example, if a residential customer has a rooftop PV system, it may generate more electricity than the home uses during daylight hours. If the home is net-metered, the electricity meter will run backwards to provide a credit against what electricity is consumed at night or other periods when the home’s electricity use exceeds the system’s output. The credit is set at the customer’s retail energy rate. Under this arrangement, customers are only billed for their “net” energy use. This practice enables utility customers who are producing their own electricity to decrease their electricity bills, and it is a powerful tool for driving investment in solar power.
What is at stake here?
According to the U.S. Energy Information Administration, Wisconsin has 3,879 residential net metering households, 874 commercial net metering customers, and 74 industrial net metering customers. These customers are at risk of increased electric bills with the potential loss of net metering.
In addition, the 2019 jobs data from Clean Energy Trust found that before the pandemic hit, Wisconsin employed over 3,798 solar installers as part of the statewide clean energy workforce. With less financial incentive for installing solar, these jobs and other clean energy jobs would be at risk if this petition is granted.
Net metering is good for everyone
RENEW Wisconsin joined other organizations in protesting this petition to wrest control of net metering away from states and put it in the hands of a federal agency. Our protest, authored by attorneys Dave Bender and Carter Hall of Earthjustice with clients Sierra Club and Vote Solar, includes explanations of the value of net metering policies for the electric grid. Here are some essential excerpts from the protest:
- Net metered facilities (such as solar) provide capacity value by avoiding otherwise required generation, transmission and distribution capacity.
- With net metering, solar has become an affordable option for almost everyone, not just high-wealth families. Net metering supports the increased use of distributed solar (such as solar arrays on the rooftop of a house or business), stimulating investment across communities while reducing the environmental and health impacts on low income communities and communities of color, who are disproportionately burdened by current forms of energy production.
- Solar installers operate in a competitive marketplace, driving down prices and passing savings onto consumers.
- Distributed solar has predictable energy production.
- Allegations of cross-subsidies are unfounded and overstated. Net metered customers often reduce their own loads and system loads during the cost-causing peak hours used to allocate costs of retail service, meaning they consume less of the fixed and demand services as measured by cost of service analysis.
Strong bipartisan support for state control of net metering
Millions of individual citizens and businesses across the country have made significant investments to generate their own electricity and have entered long-term contracts premised on the continuation of policies and programs regulated at the state level. Granting the petition would create enormous uncertainty and financial harm for our citizens and businesses at a time when they are already struggling with the economic impacts of the coronavirus.
More than 240 comments in opposition have been submitted to the FERC, and just five comments in support of taking away state control of net metering. Here are a few highlights:
Josh Kaul, Attorney General of Wisconsin said,
“Suddenly changing the rules on Wisconsinites who invested in clean energy for their homes is wrong and bad for the future of clean energy,” said AG Kaul. “The federal government shouldn’t be disrupting state programs that are good for the environment and help consumers save money.” 6/15/20
Frank Knapp Jr. CEO and President of South Carolina Small Business Chamber of Commerce said,
“…Net metering regulation properly resides with the states… We ask that the Commission reject the NERA petition. Moving it forward only serves the purpose of big special interests that find it easier to influence one group of federal commissioners rather than legislators, regulators and consumers in 50 individual states.” 6/11/20
Terry Kilgore, Virginia State Delegate (R-VA-1) wrote,
“This case would set two bad precedents. It would move us closer to nationalized electricity regulation and give more power to unaccountable federal bureaucrats. We, as Virginians, must oppose this and fight to make sure the authority to set energy policy stays vested with Virginia’s General Assembly.” 6/20/20
Net metering is in jeopardy. The petition, if approved, would take the state out of the picture in designing and preserving net metering as we know it. You can count on RENEW to keep working to ensure that net metering policies remain in the hands of our state regulators and are designed to fairly compensate residents and business that have installed renewable energy.
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