Tag: "ferc"

07/16/20

  07:11:00 am, by Jim Jenal - Founder & CEO   , 1119 words  
Categories: Net Metering

FERC Ruling: Win for Net Metering, for Now!

We have been writing about a petition before the Federal Energy Regulatory Commission (FERC) filed by a shadowy organization calling itself the New England Ratepayers Association (NERA) seeking to gut net metering throughout the United States.  (See my prior posts here and here.)

Well we just learned of the ruling issued yesterday by the FERC, and while it is being widely touted as a big win for net metering, the reality of the decision is far less comforting than the victorious proclamations suggest.  Here’s our take…

Net Metering Survives…

The bottom line of the 3-0 Order Dismissing Petition for Declaratory Order is that NERA’s petition was dismissed by the FERC, with all three Commissioners in agreement.  But this was no full-throated defense of net metering, or even an assertion that the FERC has no business regulating how utilities deal with their rooftop solar customers.  After going back over the petition in painful detail, the order identifies the responding parties, and the arguments advanced in support and opposition to the petition.

One of the more interesting points raised in opposition challenged NERA’s refusal to disclose its members, who pay annual dues in the range of $5,000 to $20,000, which makes them a very special class of ratepayers!  Certainly not an organization of regular Janes, paying their electric bill. 

Noted commenter Public Citizen:

NERA does not disclose its constituent members or the interests it represents; therefore, NERA has not demonstrated that it will be subject to harm based on the outcome of the Petition or that it has an identifiable interest in the proceedings.

And the Pennsylvania Public Utility Commission asserted that

[T]he net metering regulatory scheme is already well established and the Petition fails to identify a specific state net metering scheme that is at issue, even though the Commission requires a concrete case or controversy with limited exceptions… [and the]  Commission’s net metering precedent is sound and there is no controversy or uncertainty to resolve.

That, of course, is a jurisdictional argument – nothing new had occurred to warrant the petition, and the case law that they relied upon was a decade old!  And that is how the Commission decided to resolve this non-dispute:

Declaratory orders to terminate a controversy or remove uncertainty are discretionary.  We find that the issues presented in the Petition do not warrant a generic statement from the Commission at this time. Therefore, we exercise our discretion to decline to address the issues set forth in the Petition, and, accordingly, we dismiss the Petition.

The manner in which the Commission addresses a petition for declaratory order depends on the “specific facts and circumstances” presented to the Commission. NERA in its Petition makes general assertions that Net Energy Metering policies adopted by various states improperly intrude on the Commission’s authority under the FPA and PURPA. NERA states that “it is in the public interest for the Commission to address this Petition promptly so that the pricing of [Net Energy Metering] sales becomes settled and affected parties can make appropriate decisions.” NERA further states that the Petition “focuses on the more common form of [Net Energy Metering] described above, as that was the subject of the Commission’s prior rulings…” The Petition, however, does not identify a specific controversy or harm that the Commission should address in a declaratory order to terminate a controversy or to remove uncertainty… For this separate reason as well, we decline to issue the requested order. 

If you were hoping for a clear signal of support for the concept of net metering, you won’t find it here!

…For Now

To the contrary, what you find in the two concurrences filed with the order is cause for alarm.  Commissioner McNamee noted:

[T]he Commission’s Order is not a decision on whether the Commission lacks jurisdiction over the energy sales made through net metering; nor is it a decision on the merits of the issues raised by and contained in the Petition. I also note, that as a general proposition, I think it is best to decide important legal and jurisdictional questions, like the ones raised in in the Petition, when applying the law to a specific set of facts, such as in a Section 206 complaint, or through a rulemaking proceeding.

That is what you call a roadmap for future filings.  Either repackage your petition as a Section 206 complaint, or bring it up in the next appropriate rulemaking.  But just a petition to end net metering out of the blue was a bridge too far. 

However, McNamee’s view may not matter as his term ended last month, so he will likely go back to his law practice “primarily representing electric and natural gas utilities before state public utility commissions."  Surprise, surprise.

The second concurrence, from Commissioner Danly (whose term does not expire until 2023!) is even more troubling.  He wrote:

The petition for a declaratory order filed by New England Ratepayers Association (NERA) raises difficult legal questions regarding the regulatory treatment of facilities (like rooftop solar) used by retail customers primarily, but not exclusively, to serve their own electricity requirements. These questions not only include the rate treatment for excess generation but, more importantly, the boundary between federal and state jurisdiction to address such rate treatment.

I have yet to reach any conclusion regarding either rate treatment or jurisdictional boundaries, but I am certain that these are questions of profound importance and the Commission will eventually have to address them.

I am concerned that dismissing the petition on procedural grounds may well result in a patchwork quilt of conflicting decisions if the questions raised in the petition are instead presented to federal district courts across the country. While the federal courts are more than capable of adjudicating preemption claims, they are not steeped in the history of the Federal Power Act nor in matters of national energy policy. Confusion, delay and inconsistent rules—some of which will apply to individual states or parts of states—will be the inevitable result.

Nevermind that the Commission has addressed the jurisdictional question before and determined that it lacked jurisdiction over state-operated net metering programs.  And is net metering really a “matter of national energy policy"?  Whether a PWP customer gets full retail value for the energy they sell back to the grid has zero impact on the ratepayers of New England, except, of course, to the extent it reduces the value of their stock holdings in the oil and gas industry.  But that’s really none of FERC’s concern.

So, bottom line, we live to fight another day, and that’s a good thing.  But net metering continues to be under attack, and this order provides no shelter from that coming storm.

Want to do something?  Join CALSSA (or your state’s solar/storage association) or the Solar Rights Alliance - they need your support to fight back.

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06/29/20

  07:47:00 am, by Jim Jenal - Founder & CEO   , 404 words  
Categories: Residential Solar, Net Metering

Update on Net Metering Attack at the FERC

Back in April we wrote about an attempt to eliminate Net Energy Metering - the primary economic benefit for rooftop solar - by way of a misleading petition filed with the Federal Energy Regulatory Commission (FERC). Here’s an update (h/t Utility Dive)…

The petition was filed by an entity called the New England Ratepayers Association (NERA) and if successful, would potentially affect net metering in the 45 states where it presently exists in one form or another.  The FERC regulates interstate electricity markets, and NERA portrayed net metering as a “wholesale sale” of energy, essentially subjecting rooftop solar systems as if they were utility power plants.  From NERA’s FAQ about the petition:

[N]et metering is having an unfair and harmful impact on ratepayers, especially low-and middle-income families. Given this problem, NERA has chosen to challenge net metering at the body which has the proper jurisdiction over wholesale electricity transactions.

Under FERC rules, the public had until June 15 to comment on the petition, and NERA found support from some usual suspects including the Heartland Institute (famous for its climate change denialism), the coal company Murray Energy (hilariously ridiculed by John Oliver a few years ago), the Competitive Enterprise Institute, Americans for Tax Reform (say what?), and Citizens Against Government Waste. 

Curiously, although several utility companies - including PG&E - had suggested that they would comment, none of them did.

In opposition was a very long and bipartisan group of people ranging from solar companies (well duh) and solar trade associations, to local state energy regulators.  For example, the National Association of Regulatory Utilities Commissioners (which includes the California Public Utilities Commission amongst its members) said in its comments:

The [FERC]… has for nearly 20 years acknowledged states’ authority and held that net metering does not involve wholesale sales subject to its jurisdiction… Relying on that settled law, states and utilities have developed and implemented net metering programs, and millions of Americans have made long-term investments in solar panels and other distributed generation for their homes and businesses.

Exactly!

Interestingly, Public Citizen dug up some IRS filings for NERA - which self-describes as "a non-profit organization focused on promoting sound public policy that protects utility customers, both families and businesses, and lowers the cost of regulated services” - that cast doubt on that claim.  According to the IRS filings, NERA consists of 15 members (identities not disclosed), ten of whom pay $20,000 in annual dues and five that pay $5,000.  Not exactly a grassroots organization!

Watch this space!

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.

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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