OPINION: Net-metering of electricity – time for a re-think?

In April 2020, the New England Rate-payers Association (NERA) filed a Petition [1] to roll-back all ‘solar net-metering’ schemes in the US. In this petition, NERA put forward major issues regarding the financial viability of power distribution utilities and questioned their applicability to achieve carbon reduction goals, impact (of net-metering) on the reliability of bulk power system, jurisdiction over sales of excess energy, and the accounting methods related to net-metering. Furthermore, NERA described net-metering as “Robinhood-in-reverse” in terms of consumer benefits and compensation.

Considering this petition as a threat to the renewable energy industry, more than 450 organizations, 57,000 individuals, and 37 states opposed this petition [2]. This petition was ultimately rejected stating that it has failed to explain the cross-subsidization impact on the end-use consumers and that it has given some concrete arguments against the jurisdiction of the Federal Energy Regulatory Commission (FERC) over the outflow of energy. By questioning the position and motives of NERA behind this petition, these organizations asked FERC to reject the petition, citing that it would create potential negative ramifications regarding state policies towards large commercial customers. The FERC also considered this petition inconsistent with public interests and the larger consumer base. On the other hand, there are 22 organizations and individuals who supported this petition by considering ‘net-metering’ as a regressive policy program. They also agreed with NERA’s remarks and observations on the relevance and effectiveness in reduction in electricity bills and the consequential environment impacts and pricing methods of net metering. NERA also asked for a fair and just system for purchasing electricity instead of the existing ‘unfair and inefficient’ net-metering schemes.

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