On April 14th, 2020 a group called the New England Ratepayers Association (NERA) filed a petition with the Federal Energy Regulatory Commission (FERC) asking FERC to review its authority to declare exclusive federal jurisdiction over all “generation sources on the customer side of the meter” under the Public Utility Regulatory Policies Act of 1978 (PURPA), or the Federal Power Act.
Simply put, NERA is asking FERC to allow all utility companies nationwide to pay wholesale prices for excess electricity generated by solar panels on homes and businesses. That would be very bad for solar owners, because wholesale prices are generally only a small fraction of the credit most solar owners currently enjoy under net metering.
Fortunately, there is a way to help: if you’re a solar owner, solar advocate, or member of the solar industry, go to this website and fill in the appropriate section to tell your governor to take action.
The deadline for states to intervene in this petition is June 15th, 2020, so submit your support for solar as soon as possible to give your governor time to organize a response.
Read more about what the petition means below.
If NERA’s petition takes hold, US homeowners with solar will be hugely affected. Image source: Flickr
Why the NERA petition matters
A ruling in favor of NERA’s petition to pay homeowners wholesale prices for the excess electricity their solar systems produce would be a reversal of FERC policy established in 2001—a policy which has been key to the rapid adoption of solar panels over the past 20 years.
That policy allows utilities which are governed by state Public Utilities Commissions (PUCs) and legislatures to decide how they want to compensate owners of solar panels for their excess electricity that is sent to the grid.
Currently, solar owners in many states get full retail credit for excess electricity under a net metering billing arrangement.
Net metering is why residential solar power makes financial sense in much of the country. Ending it would cause a massive financial disruption to solar owners everywhere.
Who is NERA anyway?
The New England Ratepayers Association, also known as NERA, is a nonprofit advocacy group that claims to “give a larger voice for the families and businesses that are served by regulated utilities.”
However, many people in the energy industry believe NERA to be something more nefarious—a front for big business with relatively few members that each contribute tens of thousands of dollars NERA uses for lobbying and advocacy, like submitting petitions to FERC and arguing in favor of natural gas pipeline expansions.
NERA’s website lists an advisory board that contains three individuals: a former Vermont governor, a New Hampshire State Representative, and a PhD Senior Fellow at the free-market think tank called the Pacific Research Institute.
In 2018, the group Public Citizen (a consumer rights non-profit group with a division focused on energy and climate policy) intervened in another NERA petition case before FERC, asking FERC to compel NERA to disclose its full membership. Public Citizen’s request was unsuccessful, meaning we still don’t know who funds NERA’s attacks on solar.
What happens if net metering goes away?
If FERC grants NERA’s request and asserts authority over billing between solar owners and utility companies, net metering is over and all excess energy from a solar installation will have to be sold to the utility at the “avoided cost” rate, which is usually just a few cents per kilowatt-hour.
To be clear, that doesn’t mean small-scale solar instantly becomes a financial nightmare. Most electricity generated by small solar installations is used to power the homes and businesses of solar owners. That electricity is still essentially worth the retail rate, because it reduces usage of grid power.
The way net metering works is, only the excess electricity that is sent to the grid when solar panels are making more energy than the house can use would be credited at the wholesale price. That wouldn’t be ideal for solar owners, and in many cases, it could extend the time it takes for solar panels to pay their cost back by several years.
States without good net metering policies in place now include Alabama, Kansas, Oklahoma, and South Dakota—some of the worst states when it comes to the financial return of home solar.
If the entire country was forced to abandon net metering, as many as 2.2 million people across the country would see their electric bills go up. Millions more who want to install solar panels will find home solar to be much less beneficial for their families.
Again, the best way to advocate for the right to net metering is to go to SaveSolar.org and submit your support with their easy-to-use form.
If you’d like to read more about the petition, check out Vote Solar’s issue brief.