Solar industry sees threat to one of its top incentives
The solar industry, struggling amid the coronavirus pandemic, faces another threat at the Federal Energy Regulatory Commission: a petition that would effectively end a key incentive for installing rooftop solar called net metering.
The New England Ratepayers Association on April 14 asked the regulatory commission to declare that the agency has jurisdiction over net metering, which requires utilities to buy excess power from customers who generate electricity with their own energy resources, such as rooftop solar panels.
Such customers in some markets receive a credit on their electric bills for the returned electricity, usually based on the rate the utility charges.
Fortyfive states allow net metering, which has helped drive homeowners to install solar panels on their roofs. There is about 15,800 megawatts of rooftop solar capacity nationwide, up from about 3,490 megawatts five years ago, according to the Solar Energy Industries Association.
Annual residential solar investments jumped to $8.1 billion last year from $4.6 billion in 2014, the association said. The fastestgrowing states for solar installations are California, Florida, Illinois, Texas and Pennsylvania, according to the trade group.
The question at the heart of the ratepayers association’s petition is whether sales from rooftop solar should be deemed retail sales, which are regulated by states, or wholesale sales, which fall under the regulatory commission’s jurisdiction.
In decisions issued in 2001 and 2009, the regulatory commission has said that netmetered electricity sales fall under state authority. The ratepayers association, however, contends the commission’s analysis is flawed.
If the regulatory commission asserts authority over net metered sales, the practice would be effectively killed, according to Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School.
The solar industry finds the ratepayers association’s petition alarming.
“The notion that FERC would take control over states’ retail billing practices is deeply troubling,” said Katherine Gensler, SEIA’s vice president of regulatory affairs. “We strongly urge FERC to put a quick stop to this attempt to give the federal government power over policies that unquestionably belong in the hands of state policymakers.”
Democratic Sens. Chris Van Hollen of Maryland, Maggie Hassan of New Hampshire, Martin Heinrich of New Mexico and Sheldon Whitehouse of Rhode Island, plus 16 other senators and four House members in May urged the regulatory commission to reject the petition.
The Public Utility Regulatory Policies Act is clear that Congress intended net metering programs to fall under state jurisdiction, not the regulatory commission’s, the lawmakers said in a letter to the commission’s Chairman Neil Chatterjee.
“If FERC granted NERA’s petition, it would overturn longheld precedent and give the federal government decisionmaking power that has long belonged to the states, including the authority to set rates, terms, and conditions for programs,” the lawmakers said.
State utility regulators are also focused on the ratepayers association’s petition, saying it threatens their authority over a key state policy. Brandon Presley, National Association of Regulatory Utility Commissioners president and chairman of the Mississippi Public Service Commission, said states would fight the petition.
The petition “is a direct assault on state regulators’ ability to do their job and protect the public interest,” Presley tweeted.
“I will oppose this attempt to steal power away from states. State regulators won’t roll over and just go along.”
The National Association of Regulatory Utility Commissioners asked the Federal Energy Regulatory Commission to extend the comment period on the petition by 90 days because states are focused on dealing with COVID19, but the commission only added an extra 30 days for the comment period, which ended last week.
Harvard Law School’s Peskoe contends that the ratepayers association’s petition is based on flawed legal analysis. Also, unlike typical petitions at the regualtory commission, the ratepayers association failed to say how the group is harmed by net metering or describe exactly what the group is. The regulatory commission could dismiss the petition on those grounds alone, Peskoe said.
The New England Ratepayers Association, based in Concord, N.H., doesn’t disclose its membership. The group’s executive director, Marc Brown, is also director of government affairs at Advantage Government Affairs LLC, a lobbying firm. The ratepayers association didn’t respond to requests for comment.
The ratepayers association appears to be a trade group, not a typical ratepayer organization, according to Tyson Slocum, energy program director for Public Citizen, a consumer watchdog group. Slocum said he plans to ask the regulatory commission to require the ratepayers association to disclose its members.