U.S. Regulatory Agency Rejects Challenge to Net Metering

The federal agency that regulates the U.S. energy industry has rejected a legal challenge to the policy of net metering that had been launched by a major utility.

WASHINGTON, DC, US, 2001-04-18 <SolarAccess.com> The Federal Energy Regulatory Commission rejected a challenge launched by MidAmerican Energy Company in October 1998, based on claims that the net billing policy for residential renewable energy systems in the state of Iowa violates previous FERC rulings, which found that utilities cannot be required to purchase power from renewable energy producers at a price in excess of avoided cost. The Iowa-based interstate public utility argued that net metering violates the Federal Power Act, under which FERC is the regulatory authority for wholesale electric energy transactions in interstate commerce. “The issue in this case is how to measure the transaction between MidAmerican and those entities that have installed generation on their premises,” ruled FERC. MidAmerican argued that a contract for net billing constitutes a sale of electricity from generator to utility that must be priced under federal law, but FERC ruled found that “no sale occurs when an individual … installs generation and accounts for its dealings with the utility through the practice of netting.” The agency also found that measuring the netting over the monthly billing cycle for retail customers is reasonable. The order (EL99-3-000 -1-94 FERC) involved the Iowa Alternate Energy statute and the PURPA legislation, and received interventions from the National Association of Regulatory Utility Commissioners, California Public Utilities Commission, National Resources Defense Council and Pace Energy Project, Sierra Club, Public Citizen, California Energy Commission, and many more, and all but one (NIMO) opposed MidAmerican’s petition, says FERC. There are net metering and net billing policies in place in at least 20 states, and NARUC argued that state programs to address these issues are consistent with pro-competitive policies for bulk power markets and should be supported by FERC. Most net billing and metering programs involve small retail consumers who use small facilities of wind or solar energy to supply a portion of their own electric power needs, and that few of the net billing programs will result in net sales to utilities.

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