Renewable Energy Credits Remain With Customer
Pennsylvania
Pennsylvania – Net Metering
Incentive Type: Net Metering
Eligible Renewable/Other Technologies: Solar Thermal Electric, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Fuel Cells, Municipal Solid Waste, CHP/Cogeneration, Waste Coal, Coal-Mine Methane, Anaerobic Digestion, Other Distributed Generation Technologies
Applicable Sectors: Commercial, Industrial, Residential, Nonprofit, Schools, Local Government, State Government, Fed. Government, Agricultural, Institutional
Limit on System Size: Residential: 50 kW; Non-residential: 3 MW; Customers with systems that are part of microgrids or are available for emergency use: 5 MW
Limit on Overall Enrollment: No limit specified
Treatment of Net Excess: Credited to customer’s next bill at retail rate; customer receives compensation for remaining NEG at “price-to-compare” at year-end
Utilities Involved: Investor-owned utilities
Interconnection Standards for Net Metering? Yes
Authority 1: 73 P.S. § 1648.1 et seq.
Date Enacted: 11/30/2004; amended 2007
Authority 2: 52 Pa. Code Chapter 75, Subchapter B
Date Enacted: 06/22/2006
Effective Date: 12/16/2006
Authority 3: PUC Rulemaking Order L-00050174
Date Enacted: 05/22/2008
Effective Date: 11/28/2008
Summary:
The PUC adopted net-metering rules and interconnection standards for net-metered systems and other forms of DG in 2006, pursuant to the Alternative Energy Portfolio Standards (AEPS) Act of 2004. In 2007, H.B. 1203 amended the Pennsylvania AEPS and also expanded net metering. Revised rules consistent with these amendments became effective in November 2008.
In Pennsylvania, investor-owned utilities must offer net metering to residential customers that generate electricity with systems up to 50 kilowatts (kW) in capacity; nonresidential customers with systems up to three megawatts (MW) in capacity; and customers with systems greater than 3 MW but no more than 5 MW who make their systems available to the grid during emergencies, or where a microgrid is in place in order to maintain critical infrastructure. Net metering is available when any portion of the electricity generated is used to offset on-site consumption (i.e., system size is not limited by the customer’s on-site load).
Systems eligible for net metering include those that generate electricity using photovoltaics (PV), solar-thermal energy, wind energy, hydropower, geothermal energy, biomass energy, fuel cells, combined heat and power (CHP), municipal solid waste, waste coal, coal-mine methane, other forms of distributed generation (DG) and certain demand-side management technologies.
Net metering is achieved using a single, bi-directional meter that can measure and record the flow of electricity in both directions at the same rate. Net excess generation (NEG) is carried forward and credited to the customer’s next bill at the full retail rate. Customer-generators are compensated for remaining NEG at the utility’s “price-to-compare” at the end of the year. The price-to-compare includes the generation and transmission components — but not the distribution component — of a utility’s retail rate. In order to reconcile net metering with Pennsylvania’s broader renewable energy goals, the “year” referenced above is defined to coincide with the compliance year (June 1 – May 31) used for Pennsylvania’s Alternative Energy Portfolio Standard (AEPS).
The utility must provide this meter if a customer’s existing meter does not meet these requirements. If a customer agrees, a dual-meter arrangement may be substituted for the bi-directional meter. Utilities must provide net metering at nondiscriminatory rates identical with respect to rate structure, retail rate components, and any monthly charges to the rates charged to non-net-metered customers. Utilities may not charge net-metered customers any fees or other charges that do not apply to non-net-metered customers. Furthermore, utilities may not require customers to install any additional equipment or carry liability insurance.
Any customer net excess generation (NEG) will be credited at the utility’s retail rate and carried over to the customer’s next bill during a 12-month period. Customers retain ownership of alternative-energy credits (commonly referred to as “renewable-energy credits” or “RECs” when associated with renewable energy) unless there is a contract with an express provision that assigns REC ownership to another entity, or unless the customer expressly rejects REC ownership. If a net-metered customer chooses to take ownership or transfer ownership of alternative-energy credits, then the customer is responsible for installing metering equipment required to measure alternative-energy credits.*
Pennsylvania’s rules allow meter aggregation on properties owned or leased and operated by a customer. This primarily benefits farms that are commonly owned and operated. Aggregation is limited to meters (in a single utility’s service territory) that are located on properties within two miles of the boundaries of the customer’s property. The utility must provide the necessary equipment for physical meter aggregation, but the customer must pay the costs. In addition, “virtual meter aggregation” is allowed for properties owned or leased and operated by a customer and located within two miles of the boundaries of the customer’s property and within a single utility’s service territory. For virtual meter aggregation, the customer is responsible only for any incremental expense involved in processing the account on a virtual meter aggregation basis.
If a net-metered customer’s self-generation results in a 10% or higher reduction in the customer’s purchase of electricity for an annualized period, the customer must pay for its share of stranded costs to prevent interclass or intraclass shifting.
*In November 2008 amended rules for the Pennsylvania Alternative Energy Portfolio Standard (AEPS) became effective. These rules exempt PV systems of 15 kW or less from a requirement that alternative energy credit (AEC) certification be verified by metered data, and instead provide a more general instruction that it be verified by the system administrator. Thus, despite the reference to “required” equipment that remains in the net metering rules, small solar facilities may not be required to install additional metering equipment in order to generate AEPS eligible credits.
Contact:
Calvin Birge
Pennsylvania Public Utility Commission
P.O. Box 3265
Harrisburg, PA 17105-3265
Phone: (717) 783-1555
Fax: (717) 787-5813
E-Mail:> cbirge@state.pa.us
Web site: http://www.puc.state.pa.us