The net metering wars are starting. As reported in Maryland's The Daily Record, "A law intended to strengthen the state's renewable energy program has been turned on its head by a working group of the Public Service Commission, said . . . the legislation's sponsor." At SolarTown, we recently offered a primer on net metering legislation. The Daily Record describes the legislation this way: "Net metering allows people with renewable energy systems to earn money or credit from utility companies for energy they produce. These owners of solar or wind power units have electric meters that record energy both used and produced."
The new legislation sought to strengthen the net metering law in Maryland. According to The Daily Record, "The legislation adds a section to renewable energy producers' bills that tells them how much the excess energy they produced is worth. After 12 months, someone with a balance of credits could request to be paid for them." Sounds relatively straightforward? But the devil is in the details.
According to the article, utility interests inserted language into a bill that blurred the intent to strengthen the net metering law in Maryland. Then the Public Service Commission convened a working group to discuss how to enforce the new law. The public representatives and the solar companies on the working group had a very different view as to how the law should be interpreted from the view of the utility companies. First the view of the public representatives and solar companies: "The dollar value of any extra energy would be shown on a monthly bill, but those energy credits would be carried forward as credits - not money to offset future bills." And then the view of the utilities:
The utility companies proposed calculating the dollar value of excess energy each month, and carrying forward that dollar amount on a customer's bill. The credits would be valued at "prevailing market prices," which varies by location, time of year and time of day.
Jim Pierobon writing on his blog The Energy Fix gives the following example:
Take the case of Paul Verchinski of Columbia, Maryland. He purchased a typical 4 kilowatt system for his single family home (photo), looking forward to possibly eliminating his reliance on electricity from Baltimore Gas & Electric. Under rules now proposed by the Public Service Commission, Verchinski will not be able to carry forward the kilowatt hour credits equal to the value of "retail" electricity delivered to his meter. Instead, the value is to be based on a utility's cost of wholesale electric energy wherever it operates on the regional power grid and reflected on his monthly bill from BGE. The difference between the two often ranges between 5-7 cents per kilowatt hour. As time-of-use rates take effect with ‘smart' meters, that spread could double or even triple.
According to The Daily Record: "Automatically converting excess energy to dollars could mean that people using renewable energy might actually lose money. Analyses performed by the working group showed that depending on how the excess energy valuation was calculated, annual residential electric bills for solar users could increase by as much as 842 percent, and commercial bills could increase in a year by as much as 649 percent."
The net metering war in Maryland has not played its last act, but the battle will continue after the elections.