Net Metering Rules and Interconnection Standards – Docket 2011-AD-2
On December 3, the MPSC took up for consideration a Final Rule and Order for Net Metering and Interconnection Standards. After nearly 5 year of work on this issues, the MPSC voted 3-0 to adopt a rule for “net metering,” which will allow homeowners and businesses to produce their own power and sell it to electric utilities. Mississippi becomes the 45th state to adopt a rule for net-metering.
However, the MPSC did not implement a rule that follows the true definition of net metering. The MPSC found that a consumer has a right to “self-supply” and generate electricity for their own use – along with the right to connect to the grid.
The true definition of ‘net metering’ was abandoned in the Final Rule and an “adder” of 2.5 cents over avoided cost will be provided to the distributed generation (solar, wind, biomass, etc.) owner. The “adder” is intended to recognize the calculated (yet unquantifiable) benefits resulting from the implementation of a distributed generation system. The adder will be reviewed in three years and replaced after “actual benefits” are determined. Low-income homeowners will get an addition 2 cents/kwhr compensation. And utilities are required to file a report on the feasibility of community solar options. The full program will be reviewed in a new docket in five years.
The MPSC also requires the two investor-owned utilities to notify all customers within three months after the effective date of the order of the opportunity to “net meter.” A “Safety and Consumer Protection Working Group” will also be established to review issues related to the program.
The Proposed Rule originally put forth by the MPSC was favored by supporters of distributed generation. However, the utilities used concerns over cost-shifting, impacts to low-income customers, and non-recovery of fixed costs to build support for significant changes to the Proposed Rule. The threat of legal action from the rural electric power associations also forced the MPSC to release the fourteen TVA distribution cooperatives from abiding by the Final Rule. The eleven SMEPA cooperatives must submit their own plan for complying with the Final Rule by October 2016.
You are urged to read the Final Rule for yourself and determine if the program will provide adequate incentive for you as a homeowner, business owner, or industrial manager to invest in distributed generation technologies. According to the MPSC’s own report, distributed generation is expected to avoid a whole range of costs while promoting economic activity, increasing consumer choice and advancing innovation. It will be up to you to decide if this Final Rule is sufficient to encourage the development and growth of a new industry sector in the state.
Should the MPSC have adopted the Proposed Rule and followed the true definition of net metering? Did the pendulum swing too far in favor of the monopoly utilities and electric cooperatives with the Final Rule? Or did the MPSC find the sweet spot that offers a balanced approach to net metering and interconnection standards that will encourage investment in distributed generation resources while protecting consumer and utility interests? Only the future holds the answers to these questions.
For more information and perspectives:
Source: Brent Bailey – 25x’25 Alliance – State Activities Coordinator