Democratic Lawmakers Seek FERC’s Rejection of Net Metering Proposal

Democratic lawmakers recently submitted a letter urging the Federal Regulatory Commission (FERC) to reject a petition for declaratory order filed by the New England Ratepayers Association (NERA) that could impact state-run net metering programs. 

In its petition, NERA seeks to overturn the jurisdictional parameters of Full Net Metering and convert it from a state-regulated retail transaction to a wholesale transaction with federal oversight by FERC.  Currently, Full Net Metering is a widespread practice in 45 states under which an electricity customer that produces more energy from a generation source (i.e. solar panels) than it uses can deliver the excess electricity to the interconnected utility grid in exchange for credits or offsets on the customer’s electricity bill.

Specifically, NERA believes that when excess energy is delivered to the local utility for resale to the utility’s retail customers, the transactions become wholesale sales in interstate commerce.  Additionally, NERA asserts that customers who deliver energy to the interconnected utility as part of a Full Net Metering program are generally paid a price for energy that is three to five times greater than the applicable wholesale rate, while shifting the fixed costs of utilizing the transmission system to other customers of the interconnected utility.

If FERC grants NERA's petition, the pricing of Forward Net Metering transactions may be decided under the Federal Power Act (FPA) or the Public Utility Regulatory Policies Act (PURPA), which could have the effect of changing the economic benefits expected under state-specific Full Net Metering programs.

In a May 26, 2020 letter to FERC, 24 Democratic U.S. senators and representatives argued that granting NERA’s request would upend the long-held tradition that retail level transactions involving end-user electricity customers fall under the jurisdiction of the states. The lawmakers also requested that NERA disclose the identities of the 12 entities that funded NERA’s petition.

FERC has requested that comments on NERA’s petition be filed by June 15, 2020. If you would like to participate in this proceeding, please contact Pierce Atwood energy attorneys Andrew Kaplan or Sarah Tracy.