By Michael Kuser and Rich Heidorn Jr.
Thousands of individuals and groups urged FERC to reject a request by a purported ratepayer group to outlaw net metering for rooftop solar generation.
As the comment deadline closed Monday, the commission had received more than 500 individual comments or requests to intervene in the docket opened in April by a group called the New England Ratepayers Association (NERA). The group’s petition for declaratory order asked FERC to essentially outlaw net metering by ruling that the commission has exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter (EL20-42).
NERA said such sales should be priced under the Public Utility Regulatory Policies Act of 1978 or the Federal Power Act, which could require individual homeowner-generators to have a rate on file with FERC.
RTO Insider’s review of comments found few supporting NERA’s position, with state officials and others alleging it would upset two decades of legal precedent supporting state and local policies used by 2.3 million net metering participants in 49 states.
NERA describes itself as a nonprofit advocacy group seeking to protect “families and businesses” from excessive utility rates.
But other commenters complained NERA has misrepresented itself, saying its funding — 10 unnamed members contributing $20,000 and five giving $5,000, comprising 92% of its 2018 funding — makes it akin to a trade group.
“Low-income families cannot afford to make $5,000 or $20,000 annual contributions to ratepayer associations,” declared Public Citizen, which said FERC should dismiss the petition because NERA has falsely characterized itself to conceal its backers’ motives. Public Citizen said FERC’s rules requires all parties to provide “sufficient factual detail” of their interest in docketed proceedings. “NERA has provided no such detail: Its petition is silent on detailing net metering’s impact on its members,” Public Citizen said.
The Energy and Policy Institute has said NERA’s “lobbying and regulatory advocacy often align with the interests of investor-owned utilities and the fossil fuel industry” and that the group has close ties to New Hampshire Gov. Chris Sununu.
Public Citizen noted that NERA President Marc Brown also helped found a group called the Ratepayers Legal Defense Fund, which shares a phone number with Sununu Enterprises and Sununu Partners, and a business address with Sununu Holdings.
NERA’s Argument
NERA’s petition cited Energy Information Administration data showing that “in some parts of the country, such as New York, New England and California, residential retail rates are now approaching or exceed 20 cents/kWh. In contrast, wholesale energy prices in most of the country have recently averaged between approximately 2 and 6 cents/kWh.”
NERA argued that as a result, people selling their excess solar under a net metering agreement “are generally paid a price for that energy that is several times greater than the wholesale price for energy.”
The petition also cited a National Renewable Energy Laboratory 2019 report on net metering as showing “that many states are not even in compliance with existing commission precedent for determining whether a wholesale sale has taken place.”
Citizens Against Government Waste supported NERA, saying net metering policies allow rooftop solar customers to avoid paying for many of the fixed costs of the grid, resulting in “substantial cost shifting.”
“Most [net metering] policies uniformly require utility companies to purchase excess power from a rooftop solar customer at the higher full retail rate, also called full net metering, rather than the lower wholesale rate, even though it would cost the utility companies less to produce the electricity themselves,” the group said.
NERA’s petition also won support from Americans for Tax Reform, the Competitive Enterprise Institute and the Heartland Institute, which calls itself “the world’s leading public policy organization promoting climate realism and countering climate myths.”
“There are more than sufficient technical, market and policy reasons for FERC to exercise jurisdiction over what is ultimately a wholesale transaction in interstate commerce,” said Thomas Tanton, a policy adviser to the institute who formerly worked for the California Energy Commission and Electric Power Research Institute.
Outnumbered
Comments opposing the petition greatly outnumbered those in favor, however.
Among those in opposition were the National Association of Regulatory Utility Commissioners, American Public Power Association, National Rural Electric Cooperative Association, the Organization of PJM States Inc., Organization of MISO States and the New England States Committee on Electricity.
“NERA has not provided any specific examples from any state on which it has based its petition, yet wants to falsely assert that net metering programs, rates and regulations in nearly every state are unlawful, placing them under a rigid federal regime,” said Mississippi Public Service Commissioner and NARUC President Brandon Presley.
The Electricity Consumers Resource Council said the petition “reflects another prong in utilities’ efforts to soften competitive mechanisms under PURPA.”
A bipartisan coalition of 31 attorneys general sent FERC a letter urging rejection of the petition. The Sierra Club sent FERC the names of 14,000 club members who signed a statement asking the commission to reject the petition and personalized comments from almost 2,900.
A large coalition of environmental groups, including the Sierra Club, Natural Resources Defense Council and Sustainable FERC Project, commented that “the commission should reject the petition as procedurally improper because it seeks an abstract opinion on how the FPA applies to retail billing practices affecting millions of retail customers across 49 states, without a concrete set of facts or sufficiently defined controversy.”
The environmentalists assert that “NERA fails to identify its own stake in the outcome; facts about any actual retail billing practice under any specific retail net metering tariff; or a matter posing discrete legal uncertainty, as opposed to seeking a change in law.”
“It would be bad public policy to exalt the purported interests of a private, anonymous group over the interests of groups that are committed to public participation and transparent regulation,” commented the National Association of State Utility Consumer Advocates. NERA “has offered no evidence that it in fact represents any identifiable ‘ratepayers.’”
Iowa Gov. Kim Reynolds commented that “ruling in favor of NERA would be an extreme overreach that diminishes states’ regulatory authority.”
“Iowa farmers have been leading the way on renewable energy, including livestock producers who have suffered some of the worst effects of the COVID-19 pandemic,” Reynolds said. “A favorable ruling by FERC of NERA would upset the finely struck balance between state and federal jurisdictions and would have a devastating impact on their bottom line and would lead to higher energy costs for livestock producers who have already invested in solar energy projects on their farms.”
Conservative Texans for Energy Innovation, a nonprofit clean energy education and advocacy organization, said NERA’s petition “represents an anticompetitive effort to usurp the power of state regulators and cede more power to a federal government that is further removed from the particularities of each state’s energy portfolio.”
‘Wild Claim’
Conservatives for Responsible Stewardship (CRS), which claims more than 20,000 members, said the “NERA petition is flawed and, like the organization itself, seems intentionally designed to mislead.”
“The organization’s wild claim that distributed solar is not beneficial is based on cherry-picked information and tortured logic. Public utility commissions across the nation, especially in Southwestern states, attribute enormous benefits to distributed solar,” CRS said.
The South Carolina Small Business Chamber of Commerce objected to the petition, saying it would benefit special interests that find it easier to influence one group of federal commissioners rather than legislators, regulators and consumers in 50 individual states.
The Center for Rural Affairs (CRA) cited analysis of distributed solar in California highlighting that solar generation likely saved ratepayers between $650 million and $730 million from 2013 to 2015, in part from reducing demand during peak hours, lowering wholesale prices and limiting procurement costs for utilities.
“For many states, this petition would have a significant impact on net-metered facilities, as it would set pricing for generation at avoided cost rather than the carefully tailored pricing set by state policymakers in collaboration with other stakeholders,” CRA said.
“This petition is a solution in search of a problem,” said the Solar Energy Business Association of New England, calling it “a significant threat to net metering policies throughout the country.”
Allco Renewable Energy, which operates qualifying facilities under PURPA, said, “Even the retail rates that are received by generators from a variety of forms of net metering arrangements vastly understate the benefits that solar energy brings as it reduces the death and destruction from New England’s fossil fuel use.”
Theresa Becenti-Aguilar, chair of the New Mexico Public Regulation Commission, said NERA’s request would “improperly impose FERC jurisdiction on local distribution networks that are not within its legal purview since small distributed generation installations almost never send energy back through substations and on to transmission lines that cross state boundaries.”
It also would “create red tape that makes new distributed residential and small commercial grid-tied solar installations almost impossible,” she said.
“Energy transfers from a ratepayer to a local utility are retail-level transactions,” two dozen congressional Democrats said. “Customers are not installing systems to become large electricity producers; they are simply seeking to lower their power bills by investing in cost-saving and clean technology.”
Adam Frazin of Poolesville, Md., echoed that in a letter, saying he bought solar for his home to reduce pollution and his electric bill. “I am a citizen, not a wholesale electricity generating corporation,” he said.
