A growing number of utilities are calling for reform or abolition of net metering. They call it a “free ride” to use utility wires and not pay for the service. IREC, along with other non-profits and the solar industry, know net metering can be fair and balanced. It provides benefits that outweigh utility costs in most cases, particularly by deferring new utility construction. It's a hot button topic. A rundown of what's happening in key states, including a deeper analysis of the issue and insight into how to achieve a fair valuation of all of net metering's benefits, was covered by Jason to standing-room crowds

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The Future of Net Metering
Solar Power International
Chicago, IL
Jason B. Keyes
October 22 & 23, 2013

2. Definition
Net metering is a billing mechanism that credits solar
system owners for electricity exported onto the
electricity grid. Under the simplest implementation of net
metering, a utility customer’s billing meter runs
backward as solar electricity is generated and exported
to the electricity grid and forward as electricity is
consumed from the grid.

3. Courtesy SolarCity
Net metering includes this . . .

4. Courtesy SolarCity
and this . . .

5. and, in some sense, even this (Nellis AFB)

6. Key Parameters
• Facility Size
• Program Cap
• Fees
• Third Party Ownership
• And – sunshine, utility rates, incentives,
interconnection procedures

7. Net Metering Facility Size Caps
www.dsireusa.org
www.dsireusa.org / July 2013
43 states,
U.S. Territories
State Policy
Voluntary Utility Program(s) only
+ Washington DC
& 4 territories have
adopted a net
metering policy.

8. Net Metering Program Caps
(percent of utility peak demand)
DC
<
1
%
<
3
%
≥5%
<
5
%
Unlimited

9. Retail Power Purchase Agreements
RI: May be limited
to certain sectors
UT: Limited to
certain sectors
AZ: Limited to
certain sectors
Authorized by state or otherwise currently in use (see notes on following slide)
Currently under judicial or other form of legal review
Apparently disallowed by state or otherwise restricted by legal barriers
Status unknown or undetermined
September 2013

10. 2013 Net Metering Grades
(www.freeingthegrid.org)
DC
A
B
C
D
F
N/A

11. Obstacles to NEM Program Expansion
• Concerns about cost
– Utility claims of cost shifting to non-NEM customers
– Competing valuation studies
• Concerns about safety and reliability
– Shift discussion to interconnection procedures
– NEM is just a billing arrangement

12. Net metering is a “disruptive challenge” that is leading to
“declining utility revenues, increasing costs and lower
profitability potential” that must be addressed.
Edison Electric Institute

13. Next Steps
• Valuation Studies
– See IREC’s new “Regulator’s Guidebook” (www.irecusa.org)
– Need to validate NEM cost-effectiveness
– Need to include all benefits
• Rate Design
– Action shifting to rate design in utility rate cases
– Need to be involved in each major case – huge cost
• Alternative Models
– Value of Solar Tariff, Feed-in Tariff, shared solar

14. Next Steps
Valuation Studies

15. Valuation Highlights
• Energy value – natural gas not burned
• Capacity value – natural gas plant not needed
• Line losses – megawatts not lost on T&D lines
• Utility environmental – avoided compliance costs
• Ancillary benefits – grid support
• Market price impacts
• Societal benefits – jobs, health and environmental

16. Avoided capacity costs visualized

17. WA: Docket UE-131883
has info on an upcoming
workshop to discuss
costs and benefits of DG
NV: PUC opened
docket 13-07010 to
consider costs and
benefits of NEM
MN: 2013 legislation
required development
of a VOST
MI: VOST issues
have appeared in
RPS proceedings
VT: 2012 legislation
directed the VT PSB
to complete an
evaluation of NEM
OR: PUC recently
held a workshop to
discuss solar rates
in docket UM 1452
NC: In docket No.
E-100 Sub 136,
NCUC is examining
avoided cost
methodology
CA: 2012
legislation required
a CPUC study of
costs and benefits
of NEM
SC: PSC considering
a NEM docket that
addresses cost
issues
AZ: ACC
considering APS
NEM proposal and
cost/benefit studies
HI: NEM cost
benefit analysis
funded by NARUC
due out shortly
CO: PUC
considering Xcel
cost/benefit study
of NEM
TX: Austin Energy
developed a VOST in 2012;
San Antonio’s CPS will be
replacing NEM with a
SunCredit tariff
LA: In docket
R-31417 PSC staff
proposed to value
NEM exports at
avoided cost.
FL and TN: TVA and
other utilities
considering VOST
approach

18. THANKS to our generous sponsors for the
2013 3iForum and 3iAwards

19. Thank You
Jason B. Keyes
jkeyes@kfwlaw.com