Tag: "ferc"

04/23/20

  06:41:00 am, by Jim Jenal - Founder & CEO   , 725 words  
Categories: All About Solar Power, Solar Economics, Commercial Solar, Residential Solar, Ranting, Non-profit solar

While You Were Sleeping: Will FERC Preempt States' Ability to Regulate Solar?

For the most part, the regulation of the solar industry - particularly the residential and commercial solar industry - is a function of state regulators.  In California, both the California Public Utilities Commission (CPUC) and the California Energy Commission (CEC) have been the major players in shaping the policies that govern solar installations, including policies like Net Energy Metering (NEM) which determines the economic value of going solar.  But now, a petition from the other side of the country could change all of that, and force states to turn control over the solar industry to federal regulators.  Here’s our take…

FERC logo

The Federal Energy Regulatory Commission (FERC) is ”an independent agency that regulates the interstate transmission of electricity, natural gas, and oil.” Well, wait a second, what does rooftop solar have to do with the “interstate transmission of electricity"?  At first blush, certainly nothing - the excess power from your home solar might go to power your neighbor’s house, but it certainly isn’t crossing state lines. (As a recovering lawyer I could go into a lengthy discussion of the Constitution’s Commerce clause and how that has been broadly interpreted to cover an amazing array of things that seem local, but are actually interstate commerce - but I will spare you that discussion!)  

The hook here is in the greater detail of what the FERC does: “Regulates the transmission and wholesale sales of electricity in interstate commerce."  Under NEM rules, excess energy put out onto the utility’s grid by a “behind-the-meter” solar system, i.e., all grid-tied residential and commercial PV systems,  is then resold by the utility to its other customers.  A petition to the FERC filed by the New England Ratepayers Association is asking FERC to find that those sales are under the exclusive jurisdiction of the FERC.  From the petition:

The law is incontrovertible. The [Federal Power Act] draws a bright line between state and federal jurisdiction over energy sales. Sales of energy at wholesale are subject to the exclusive jurisdiction of this Commission. Sales of energy at retail are subject to the jurisdiction of the states. The sales at issue in this Petition are wholesale sales because the energy is being sold to the utility for resale to the utility’s retail load…  and therefore the Commission is required to exercise its rate jurisdiction over them. [Emphasis added.]

Wow!  Now that is interesting - energy exported to the grid, for which the PV owner is paid retail rates (or closer there to), and which the customer down the wire pays full retail rates, is somehow transmogrified into a wholesale energy sale!

But what is the point of all this?  Simple - if these are wholesale energy sales, then FERC has sole regulatory control, and pro-solar policies such as NEM would be replaced by, at best, compensation for excess energy exported at the wholesale rate.  Never mind that SCE is charging you anywhere from 19¢ to 40¢, you are only going to be compensated at the 2-6¢ rate!

Much of the “logic” behind the petition argument will be familiar to readers of this blog: rooftop solar is economically inefficient, NEM distorts wholesale energy markets, and imposes unfair burdens on ratepayers without solar.  Nevermind that all of these points have been debunked before (their expert calls those debunking efforts “irrelevant"), what is important to note is that while many of us are locked out and hunkered down during this crisis, are opponents are not.  They are hard at work, hiring top-dollar DC lawyers to press the case while the rest of us are just trying to get through the month.

Make no mistake about it - if this petition is successful, it will be the end of NEM as we know it, and not just in New England, but nationwide!

This is where organizations like CALSSA(for solar installers here in CA) and the Solar Rights Alliance (for solar system owners) are so critical.  If you are a solar installer, or run a solar company and you are not a CALSSA member, shame on you.  Join!  If you have a solar installation on your roof and you don’t belong to the Solar Rights Alliance - wake up!  Join!

NERA’s petition was filed on April 14th and under the fast track rules that NERA requested (and paid a $30,000 filing fee to secure), comments are due by mid-May.   We will update you when we learn more about its progress.  Watch this space.

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04/27/13

  12:20:00 pm, by Jim Jenal - Founder & CEO   , 287 words  
Categories: All About Solar Power, Solar News, Safety

FERC Says Solar Protects Grid from Attack

Electrical infrastructureA fascinating story over at Bloomberg (h/t Carl Siegrist) recounts the Chairman of the U.S. Federal Energy Regulatory Commission (FERC) proclaiming that the growing adoption of distributed power generation (DG) - like rooftop solar - is making the grid more resilient against terrorist attacks.  Chalk that up as one more plus in the cost/benefit analysis of solar power.

FERC Chairman Jon Wellinghoff was quoted at the Bloomberg New Energy Finance summit as saying:

It wouldn’t take that much to take the bulk of the power system down. If you took down the transformers and the substations so they’re out permanently, we could be out for a long, long time…

A more distributed system is much more resilient. Millions of distributed generators can’t be taken down at once.

Now this only makes sense if you can dynamically re-structure the grid to provide a locally operational grid which the DG can support.  (This is necessary since most DG systems - like the solar power systems that we install - have anti-islanding features which means that they shut off if the grid fails.)  But if you can make that happen, it makes sense that the local DG systems could help pick up some of the slack for remote generation that has been lost due to attack.

We find this take particularly interesting given the coming debate on the cost/benefit of net-metering systems.  The benefit being touted by Chariman Wellinghoff is not one generally mentioned and would certainly be difficult to quantify, but could make a huge difference to this country in the aftermath of a concerted terrorist assault on our electrical infrastructure.

It will be interesting to see if this gets any play when the net-metering debate begins in earnest in the coming months.

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Jim Jenal is the Founder & CEO of Run on Sun, Pasadena's premier installer and integrator of top-of-the-line solar power installations.
Run on Sun also offers solar consulting services, working with consumers, utilities, and municipalities to help them make solar power affordable and reliable.

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