Third-Party System Ownership Approved in Oregon

Last month, the Oregon Public Utility Commission (OPUC) issued an Order that allows third-party ownership of renewable energy systems in the state, paving the way for developers to build and operate solar and wind facilities on property that belongs to utility customers. The moves comes as other regulatory commissions across the nation consider whether or not a third party owner of a distributed energy system should be considered a utility.

According to the Order, Oregon’s net-metering rules do not require that the utility customer own an otherwise eligible net-metering facility installed on a utility customer’s property. Any load not served by the on-site generation must be provided by the utility.

The utility must also provide and pay for the standard meter required to interconnect the facility to the grid. In addition, the Order acknowledged that net-metering rules still apply even if the developer is receiving additional state and federal incentives, such as tax credits. The Order also stated that any renewable energy credits generated by the facility would belong to the owner of the facility, not the utility.

The other key aspect of the Order was the question of whether third-party owners of such facilities would be subject to regulation by the OPUC either as a “public utility” or as an electricity service supplier (ESS) under Oregon law.

The OPUC concluded that a solar or wind net-metered facility owned by a third party is not a “public utility” because Oregon law specifically exempts solar and wind facilities from the definition. Notably, the Order stated that although a net-metering facility may generate electricity using a wide range of fuels (e.g., solar, wind, fuel cells, hydroelectric power, landfill gas, digester gas, waste, dedicated energy crops available on a renewable basis, and low-emission, nontoxic biomass based on solid organic fuels from wood, forest, or field residues), only electricity sales from net-metered wind and solar facilities are exempt from regulation by the OPUC.

The OPUC decided that a developer that installs, owns, and operates a solar facility on a utility customer’s property is not an ESS because a developer’s facilities would be connected on the customer’s side of the meter, the developer would not use the utility’s distribution system, and the developer would not supply or require the use of ancillary services.


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