PROPOSED RULEMAKING
PENNSYLVANIA PUBLIC UTILITY COMMISSION
[52 PA. CODE CH. 75]
[36 Pa.B. 571] [L-00050174]
Alternative Energy Portfolio Standards The Pennsylvania Public Utility Commission, on November 10, 2005, adopted a proposed rulemaking order which promotes onsite generation by customer-generators using renewable resources and eliminates barriers which may have previously existed regarding net metering.
Executive Summary
Under 73 P. S. § 1648.5, the Public Utility Commission is required to develop regulations governing net metering within this Commonwealth through a stakeholder process. This rulemaking is the initial, formal proposed regulation resulting from the stakeholder process. The regulations govern the process by which a customer-generator, as defined by the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1648.1--1648.8), can begin net metering electric usage and production from alternative energy resources. The regulations also provide for metering capabilities that will be required and a compensation mechanism which reimburses customer-generators for surplus energy supplied to the electric grid.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on January 19, 2006, the Commission submitted a copy of this proposed rulemaking and a copy of a Regulatory Analysis Form to the Independent Regulatory Review Commission (IRRC) and to the Chairpersons of the House and Senate Committees. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, IRRC may convey any comments, recommendations or objections to the proposed rulemaking within 30 days of the close of the public comment period. The comments, recommendations or objections must specify the regulatory review criteria which have not been met. The Regulatory Review Act specifies detailed procedures for review, prior to final publication of the rulemaking, by the Commission, the General Assembly and the Governor of comments, recommendations or objections raised.
Public Meeting held
November 10, 2005Commissioners Present: Wendell F. Holland, Chairperson; James H. Cawley, Vice Chairperson; Bill Shane; Kim Pizzingrilli; Terrance J. Fitzpatrick, concurring statement follows
Proposed Rulemaking Re Net Metering for Customer-Generators pursuant to Section 5 of the Alternative Energy Portfolio Standards Act,
73 P. S. § 1648.5; L-00050174
Implementation of the Alternative Energy Portfolio Standards Act of 2004: Net Metering; M-00051865
Proposed Rulemaking Order By the Commission:
The Alternative Energy Portfolio Standards Act of 2004, 73 P. S. §§ 1648.1--1648.8 (Act), includes directives that the Commission develop regulations for net metering and interconnection for customer-generators. In accordance with section 5 of the Act, 73 P. S. § 1648.5, the Commission formally commences its rulemaking process to establish regulations governing net metering for customer-generators. The Commission seeks comments from all interested parties on these proposed regulations, which are found in Annex A. Additionally, the Commission will close the Net Metering sub-group as that sub-group has reached its goal by way of this proposed rulemaking Order and the companion rulemaking Order proposing regulations which set forth interconnection standards.
Background
Section 5 of the Act provides as follows:
The commission shall develop technical and net metering interconnection rules for customer-generators intending to operate renewable onsite generators in parallel with the electric utility grid, consistent with rules developed in other states within the service region of the regional transmission organization that manages the transmission system in any part of this Commonwealth. The commission shall convene a stakeholder process to develop Statewide technical and net metering rules for customer-generators. The commission shall develop these rules within nine months of the effective date of this act.73 P. S. § 1648.5.
On March 3, 2005, the Commission convened an Alternative Energy Portfolio Standards Working Group (AEPS WG). The AEPS WG was established to provide a forum for considering the technical standards, business rules and regulatory framework necessary for Act 213's implementation. The Net Metering sub-group was formed out of the AEPS WG and was specifically tasked with developing proposed regulations governing net metering and interconnection standards.
The Net Metering sub-group has met on several occasions since March 3 to discuss and develop a set of proposed regulations in two parts. First, the Net Metering sub-group focused on Net Metering, the purpose of this proposed rulemaking. Second, the Net Metering sub-group focused on interconnection standards, which will be the subject of a separate proposed rulemaking proceeding.
Participants in the Net Metering sub-group have included representatives from Commission Staff, the Department of Environmental Protection (DEP), the Energy Association of Pennsylvania and several of its member companies, the Pennsylvania Farm Bureau, the Office of Consumer Advocate (OCA), the Office of Small Business Advocate (OSBA), Citizens for Pennsylvania's Future, the Small Generator Coalition with the Solar Energy Industries Association and several similar entities. From the foregoing, it is clear that the Net Metering sub-group had the benefit of a wide array of interests and broad expertise as it went through the process of developing the proposed regulations.
At the initial meeting, participants were requested to discuss various issues which any net metering rulemaking would need to address. Following that meeting, Commission Staff issued a proposed issues list to the sub-group and called for comments to add any issues not already included and propose solutions. That issues list and call for comments was also posted on the Commission's web site. A second meeting was held to discuss the comments filed in response to the Staff generated issues list. On August 3, 2005, Commission Staff issued a proposed set of Net Metering regulations to the Net Metering sub-group and called for comments. The proposal was also posted on the Commission's web site.
Following the receipt of comments to the August 3, 2005 Staff proposal, Commission Staff developed the recommendation now before us. This Staff proposal was developed based upon the comments submitted through the Net Metering sub-group process, consistent with the Act's mandate that the regulations be developed through a stakeholder process.
Discussion
The Act provides a great deal of flexibility to the Commission regarding Net Metering, providing only that the regulations are to be developed through a stakeholder process and, while not mandating conformity, to the extent possible, regulations promulgated here should be ''consistent with rules defined in other states'' within the transmission zones of regional transmission organizations serving Pennsylvania. As the process moved forward, the Participants reviewed Net Metering regulations in existence in New Jersey and also followed rulemaking processes ongoing in Maryland and Ohio. Regulations in existence in New York and Vermont were also instructive.
The proposed Net Metering regulations are consistent with the rules now in place in other jurisdictions within the transmission zones of regional transmission organizations serving Pennsylvania. In addition, the proposed regulations have been drafted with a view towards promoting onsite generation by customer-generators using renewable resources, consistent with the over-arching goal of the Act. Accordingly, the proposed regulations strive to eliminate barriers which may have previously existed with regard to net metering while ensuring that net metering by customer-generators will not unduly burden other customers on a particular electric distribution company's (EDC) system.
A. General Provisions of Chapter 75 of the Public Utility Code
The Commission will be adding Chapter 75 to the Public Utility Code, which will serve as the location for most regulations adopted pursuant to the Act. As this Order represents the first proposed rulemaking in response to the Act, Annex A includes Chapter 75's general provisions at Subchapter A. At this time, Subchapter A contains those definitions that Staff has identified as potentially having application to more than one subchapter. This includes the definitions found in the Act as well as relevant definitions from Chapter 28 of the Public Utility Code. 73 P. S. § 1648.2, 66 Pa.C.S. § 2803. Subchapter A may be supplemented as the Commission issues additional rulemakings as part of its implementation of the Act. Definitions specific to the subject of net metering are listed separately in the net metering subchapter. Where possible, the Commission has chosen to make use of already existing definitions for terms that are used in these subchapters. Examples include ''Alternative energy credit,'' ''Customer-generator,'' and ''Electric distribution company.'' As we move into this new area of regulation, we have taken every effort to be as specific as possible since we are operating under both the Public Utility Code and the Act. Accordingly, the Commission has chosen to strike a cautious note to provide regulatory certainty.
B. Scope
This section endeavors to set forth the scope of net metering under the Act. In the initial Staff proposal, the Scope of the regulations was described as applying to residential and small commercial customers. Several Participants commented that use of the phrase ''residential and small commercial customers'' had the potential of excluding some agricultural customers who otherwise would be considered ''customer-generators'' under the Act. Other Participants suggested that a capacity limit of 40 kilowatts (kW) be used (with an exception for agricultural applications) to restrict the scope of the regulations.
After reviewing the foregoing, we believe that paraphrasing the Act is the best method of setting forth the scope of the regulations. The Act expressly provides that the Net Metering regulations are to be developed for ''customer-generators.'' That term is defined in the Act and has specific capacity limits in place. Accordingly, the proposed Scope of the regulations provides that they apply to electric generation suppliers (EGSs) and EDCs which have customer-generators who intend to pursue net metering opportunities in accordance with the Act.
C. Net metering definitions
Several new definitions are set forth in Subchapter B. Definitions for ''Net metering,'' ''Avoided cost of wholesale power,'' ''Annualized period,'' and ''Meter aggregation'' have been developed, among others. Several Participants proposed ministerial edits to definitions which provided greater clarity and they have been adopted. For example, the OSBA observed that the definition of Net Metering should clearly state that any resulting billing credits are on a kilowatt hour (kWh) basis. Similarly, DEP suggested that ''equipment package'' be specifically defined. The OCA suggested that ''Customer-generator facility'' should include a specific reference to equipment used to deliver electricity to the EDC's system.
Three particular definitions have been changed from the Staff proposal which should be highlighted. First, we have changed the definition of ''Annualized period'' to be consistent with ''Reporting period'' as that term is defined in the Act. The Staff version referenced the PJM LLC (PJM) planning year, however several EDCs are not located within the PJM system. Accordingly, it is appropriate to adopt a more generic definition. We note that ''Reporting period'' as defined in the Act coincides with the PJM planning year.
The second and third definitions involve meter aggregation. Several Participants, including the Farm Bureau, strongly advocated that meter aggregation be permitted for net metering customers. Several other Participants opposed the concept. In keeping with the goal of the Act, we have provided for meter aggregation in these regulations. As noted by the OSBA, one of the problems inherent in meter aggregation is the issue of which rate class an aggregated facility would belong to since many such facilities include meters rated for different classes.
To resolve this issue in a manner that has the least impact on other rate payers, we have changed the definitions of ''physical meter aggregation'' and ''virtual meter aggregation'' to provide for the aggregation of meters ''within a particular rate class on contiguous and adjacent properties owned and operated by a customer-generator.'' Thus, as currently proposed, aggregation will only be permitted for meters within the same rate class.
D. Net metering general provisions
This section describes the general operation of net metering in Pennsylvania. The method of crediting customer-generators for surplus kWhs from month to month, with a pay-out at the end of the annualized period is identical to the system now in place in New Jersey. Some Participants commented that a monthly payout system would be more advantageous. However, it is our view that the credit/pay-out system as proposed will better promote customer-generators and net metering as envisioned by the Act.
Some Participants questioned whether Tier II resources should be included in net metering. The comments suggested that Tier II resources generally had capacity ratings far in excess of that contemplated by the Act for customer-generator facilities. In addition, it was suggested that limiting net metering to Tier I resources would promote cleaner self generation. The Act does not restrict net metering to Tier I resources. Also, given that the Scope of the proposed regulations limits the capacity to that found in the definition of ''customer-generator,'' we do not see any need to be more restrictive than proposed.
Some additional comments should be addressed here. First, the OSBA observes that net metering is to be offered on a first come, first served basis and queries what the cap would be for customer-generators desiring to net meter. As will be seen in the proposed interconnection rulemaking, there is a ceiling on the amount of generation that can be interconnected at certain points on the distribution system. Once that ceiling is reached, the integrity of the electric grid will not permit additional ties. Thus, the ''cap'' is found in the interconnection rulemaking. To recognize that ''cap'' here, we have provided that net metering shall be offered on a first come, first served basis.
Several Participants note that while EGSs are permitted to offer net metering, they are not required to do so and any terms for EGS net metering are to be decided by the EGS and its customer. In our view, a regulatory mandate to EGSs regarding a net metering service offer would be inconsistent with a free market construct. It is our hope that EGSs will compete in this area and offer a net metering product that will be attractive to customer-generators. To that end, we have expressly provided that EDCs are to develop net metering protocols for EGSs operating over their systems. However, we do not find that it is appropriate to mandate such products by EGSs.
The Staff proposal had recommended an annual report that included information concerning the total number of customer-generator facilities; the total estimated rated generating capacity of net metering customer-generators; the total estimated net kWhs received from customer-generators; and, the total amount of energy produced by customer-generators. The OCA observed that the last two items may require sub-metering to acquire the information. Upon review, we propose to require information relating to the total number of customer-generator facilities that are net metering and the total estimated rated generating capacity. That information can be readily obtained without recourse to additional metering and will serve to provide the Commission with needed information regarding the scale of net metering in the Commonwealth. We will not require the reporting of total estimated net kWhs received from customer-generators or the total amount of energy produced by customer-generators.
Several sections of the proposed regulations provide that EDCs shall not discriminate against net metering customers and shall provide net metering at rates that are identical with respect to rate structure, retail rate components and monthly charges as are charged to other customers. Several Participants have commented that these provisions will retain certain charges that current net metering customers claim destroy the economics of net metered onsite generation. We invite additional comments on this issue, particularly in view of the meter aggregation opportunities provided.
It should be noted that proposed § 75.13(k) provides that an EDC may not require insurance for a net metering customer-generator. In the proposed interconnection regulations, we have not required indemnification or liability insurance. In the proposed interconnection regulations, Staff suggests that insurance requirements, if any, should be reserved for the interconnection agreement form. We note that the Mid-Atlantic Distributed Resource Initiative model dues not require specific levels of insurance but recommends that interconnection customers voluntarily obtain coverage. We invite comments on this issue.
E. Meters and Metering
In this section, we address the nature of the metering equipment to be used, meter aggregation, cost responsibility and ownership of alternative energy credits which may be produced by customer-generator facilities. With regard to meter equipment, some Participants favored a dual meter approach; others favored a single meter approach. The Staff proposal has been clarified here to provide that a single, bi-directional meter that can measure and record the flow of energy in both directions shall be required. Upon agreement of the EDC and the customer-generator, a dual meter approach will be permitted. We note that the single, bi-directional meter requirement is consistent with the current New Jersey regulations. We specifically request comments regarding the read and record capability of the meter and whether this addresses EDC concerns regarding the single meter approach. Comments should also address any cost or technical issues raised by a read and record requirement.
The proposed regulations also provide that if a customer-generator's existing equipment does not meet the regulatory requirement, then the EDC shall provide the appropriate meter at the EDC's expense. Several Participants requested that the regulation specify that the cost of the meter would be recoverable. We have not provided that treatment in the regulation. However, that issue may be raised and deliberated in an appropriate proceeding dealing with cost recovery under the Act or applicable provisions of the Public Utility Code. We also provide that any additional metering equipment change which is brought about by the customer-generator will be completed at the customer-generator's expense.
In the event that a single, bi-directional meter as specified is not deemed to be a qualifying meter for the purpose of qualifying alternative energy credits, the proposed regulations provide that the person who desires to take title to any alternative energy credits will bear the cost of any additional metering equipment required. The regulations make it clear that the customer-generator has the principle ownership interest in any alternative energy credits produced, but he may sell that interest to any third party or renounce it in favor of the EDC. Similarly, the cost of meter aggregation is to be borne by the customer-generator who requests that treatment. For virtual aggregation, the customer-generator is to be responsible only for the incremental difference in the cost of the billing process.
F. Treatment of Stranded Costs
Clearly, the Act contemplates that a successful customer-generator will reduce the amount of electricity taken from the grid and, in some cases, may even provide a small surplus into the grid. Section 2808(a) of the Public Utility Code (Code), 66 Pa.C.S. § 2808(a), provides in pertinent part:
If a customer installs on-site generation which operates in parallel with other generation on the public utility's system and which significantly reduces the customer's purchases of electricity through the transmission and distribution network, the customer's fully allocated share of transition or stranded costs shall be recovered from the customer through a competitive transition charge.66 Pa.C.S. § 2808(a). (Emphasis added).
During the Net Metering sub-group meetings and in comments, several Participants expressed concerns about the interplay of the Act and section 2808(a) of the Code. The essential concern is that it would most likely cost more to track usage for residential customer-generators than would be recovered through the resulting allocated share of stranded costs. Accordingly, while all Participants recognize the applicability of section 2808(a) of the Code, it has been forcefully argued that for the residential class, any reduction in usage should be deemed insignificant and not subject to an allocated payment of stranded costs.
The original Staff proposal provided that any reduction in usage from the grid that was equal to or greater than 10% when compared to the prior year would trigger the application of section 2808(a) of the Code. Based upon the comments received and the discussions in the sub-group meetings, we have revised this section and propose that it apply to small commercial, commercial and industrial customer classes only.
Conclusion
The Commission welcomes the filing of comments by all interested parties on all aspects of these regulations. As previously noted, the Commission is particularly interested in comments regarding a read and record bi-directional meter capability and the effect of nondiscriminatory rate treatment and charges that existing self-generating customers find to be onerous. Comments on the treatment of stranded costs are also desired.
To the extent that a party believes any sections of these proposed regulations need revising, we ask that alternative language be suggested. This is particularly important in the area of definitions. If a party believes that additional definitions are required, specific language should be proposed. A comment period of 60 days has been provided.
Accordingly, under section 501 of the Public Utility Code, 66 Pa.C.S. § 501; section 5 of the Alternative Energy Portfolio Supply Act, 73 P. S. § 1648.5; sections 201 and 202 of the act of July 31, 1968, P. L. 769 No. 240, 45 P. S. §§ 1201 and 1202, and the regulations promulgated thereunder at 1 Pa. Code §§ 7.1, 7.2, and 7.5; section 204(b) of the Commonwealth Attorneys Act, 71 P. S. 732.204(b); section 745.5 of the Regulatory Review Act, 71 P. S. § 745.5; and section 612 of The Administrative Code of 1929, 71 P. S. § 232, and the regulations promulgated thereunder at 4 Pa. Code §§ 7.231--7.234, we are considering adopting the proposed regulations set forth in Annex A; Therefore,
It Is Ordered That:
1. The proposed rulemaking will consider the regulations set forth in Annex A.
2. The Secretary shall submit this order and Annex A to the Office of Attorney General for review as to form and legality and to the Governor's Budget Office for review of fiscal impact.
3. The Secretary shall submit this order and Annex A for review and comments to the Independent Regulatory Review Commission and the Legislative Standing Committees.
4. The Secretary shall certify this order and Annex A and deposit them with the Legislative Reference Bureau to be published in the Pennsylvania Bulletin.
5. An original and 15 copies of any written comments referencing the docket number of the proposed regulations be submitted within 60 days of publication in the Pennsylvania Bulletin to the Pennsylvania Public Utility Commission, Attn.: Secretary, P. O. Box 3265, Harrisburg, PA 17105-3265.
6. A copy of this order and Annex A shall be served on the Department of Environmental Protection, all jurisdictional electric distribution companies, all licensed electric generation suppliers, the Office of Trial Staff, the Office of Consumer Advocate, the Office of Small Business Advocate and all other Participants in the Alternative Energy Portfolio Supply Working Group at M-00051865.
7. The contact persons for this proposed rulemaking are Calvin Birge, Bureau of Conservation, Economics and Energy Planning, (717) 783-1555 (technical), and H. Kirk House, Office of Special Assistants, (717) 772-8495 (legal).
JAMES J. MCNULTY,
SecretaryFiscal Note: 57-244. No fiscal impact; (8) recommends adoption.
Concurring Statement of Commissioner
Terrance J. Fitzpatrick
Implementation of the Alternative Energy Portfolio Standards Act of 2004; Net Metering--
Notice of Proposed RulemakingPublic Meeting November 10, 2005
NOV-2005-OSA-0344*
M-00051865
L-00050174Today the Commission formally commences its rulemaking process to establish regulations governing net metering for customer-generators via a Proposed Rulemaking Order seeking comments from all interested parties. The proposed regulations before us were developed by Commission staff with the participation and comments of the Net Metering sub-group of the Alternative Energy Portfolio Standards Working Group.
While I support the issuance of these proposed regulations for comment, I am reserving judgment on the positions I may ultimately take concerning several issues, including cost recovery, as well as the general level of subsidies. I look forward to the comments of all interested parties on these specific issues, as well as all of the aspects of these proposed regulations.
Annex A
TITLE 52. PUBLIC UTILITIES
PART I. PUBLIC UTILITY COMMISSION
Subpart C. FIXED SERVICE UTILITIES
CHAPTER 75. ALTERNATIVE ENERGY PORTFOLIO STANDARDS Subchap.
A. GENERAL PROVISIONS B. NET METERING
Subchapter A. GENERAL PROVISIONS Sec.
75.1. Definitions. § 75.1. Definitions.
The following words and terms, when used in this chapter, have the following meanings unless the context clearly indicates otherwise:
Act--Alternative Energy Portfolio Standards Act (73 P. S. §§ 1648.1--1648).
Alternative energy credit--The term has the same meaning as defined in section 2 of the act (73 P. S. § 1648.2).
Alternative energy sources--The term has the same meaning as defined in section 2 of the act.
Alternative energy system--The term has the same meaning as defined in section 2 of the act.
Competitive transition charge--The term has the same meaning as defined in 66 Pa.C.S. § 2803 (relating to definitions).
Cost recovery period--The term has the same meaning as defined in section 2 of the act.
Customer-generator--The term has the same meaning as defined in section 2 of the act.
Department--The Department of Environmental Protection of the Commonwealth.
EDC--Electric distribution company--This term has the same meaning as defined in 66 Pa.C.S. § 2803.
EGS--Electric generation supplier--This term has the same meaning as defined in 66 Pa.C.S. § 2803.
Force majeure--The term has the same meaning as defined in section 2 of the act.
kW--Kilowatt--A unit of power representing 1,000 watts. A kW equals 1/1000 of a MW.
MW--Megawatt--A unit of power representing 1,000,000 watts. A MW equals 1,000 kWs.
Municipal solid waste--The term has the same meaning as defined in section 2 of the act.
RTO--Regional transmission organization--The term has the same meaning as defined in section 2 of the act.
Reporting period--The term has the same meaning as defined in section 2 of the act.
Retail electric customer--The term has the same meaning as defined in section 2 of the act.
Stranded costs--This term has the same meaning as defined in 66 Pa.C.S. § 2803.
Tier I alternative energy source--The term has the same meaning as defined in section 2 of the act.
Tier II alternative energy source--The term has the same meaning as defined in section 2 of the act.
True-up period--The term has the same meaning as defined in section 2 of the act.
Subchapter B. NET METERING
75.11. Scope. 75.12. Definitions. 75.13. General provisions. 75.14. Meters and metering. 75.15. Treatment of stranded costs. § 75.11. Scope.
This subchapter sets forth net metering requirements that apply to EGSs and EDCs which have customer-generators intending to pursue net metering opportunities in accordance with the act.
§ 75.12. Definitions.
The following words and terms, when used in this subchapter, have the following meanings unless the context clearly indicates otherwise:
Avoided cost of wholesale power--The average locational marginal price of energy, or its successor, over the annualized period in the applicable EDC's transmission zone.
Annualized period--The term has the same meaning as ''reporting period'' as that term is defined in section 2 of the act.
Base year--For customer-generators who initiated self generation on or after January 1, 1999, the base year will be the immediate prior calendar year; for all other customer generators, the base year will be 1996.
Billing month--The term has the same meaning as set forth in § 56.2 (relating to definitions).
Customer-generator facility--The equipment used by a customer-generator to generate, manage, monitor and deliver electricity to the EDC.
Electric distribution system--That portion of an electric system which delivers electricity from transformation points on the transmission system to points of connection at a customer's premises.
Equipment package--A group of components connecting an electric generator with an electric delivery system, and includes all interface equipment including switchgear, inverters, or other interface devices. An equipment package may include an integrated generator or electric source.
Meter aggregation--The combination of readings from and billing for all meters within a particular rate class on contiguous and adjacent properties owned and operated by a customer-generator. Meter aggregation may be completed through physical or virtual meter aggregation.
Net metering--A system of metering electricity in which:
(i) The EDC credits a customer-generator at the full retail rate for each kilowatt-hour produced by a Tier I or Tier II resource installed on the customer-generator's side of the electric revenue meter, up to the total amount of electricity used by that customer during an annualized period.
(ii) The EDC compensates the customer-generator at the end of the annualized period for any remaining kilowatt-hour credits, at a rate equal to the supplier/provider's avoided cost of wholesale power.
(iii) The credit or compensation mechanism between an EGS and a net metered customer-generator of an EGS shall be determined by the particular service agreement between the EGS and the customer-generator.
Physical meter aggregation--The physical rewiring of all meters within a particular rate class on contiguous and adjacent properties owned and operated by a customer-generator to provide a single point of contact for a single meter to measure electric service for that customer-generator.
Virtual meter aggregation--The combination of readings and billing for all meters in a particular rate class on contiguous and adjacent properties owned and operated by a customer-generator by means of the EDC's billing process, rather than through physical rewiring of the customer-generator's property for a physical, single point of contact.
§ 75.13. General provisions.
(a) EDCs shall offer net metering to customer-generators that generate electricity on the customer-generator's side of the meter using Tier I or Tier II alternative energy sources, on a first come, first served basis. EGSs may offer net metering to customer-generators, on a first come, first served basis, under the terms and conditions as are set forth in agreements between EGSs and customer-generators taking service from EGSs.
(b) An EDC shall file a tariff with the Commission that provides for net metering consistent with this chapter. An EDC shall file a tariff providing net metering protocols that enable EGSs to offer net metering to customer-generators taking service from EGSs. To the extent that an EGS offers net metering service, the EGS shall prepare information about net metering consistent with this chapter and provide that information with the disclosure information required in § 54.5 (relating to disclosure statement for residential and small business customers).
(c) If a customer-generator is a generation customer of an EDC and supplies more electricity to the electric distribution system than the EDC delivers to the customer-generator in a given billing month, the EDC shall credit the customer-generator for the excess on a kilowatt-hour for kilowatt-hour basis. The EDC shall reduce the customer-generator's bill for the next billing month to compensate for the excess electricity produced by the customer-generator in the previous billing period.
(d) An EDC shall carry over credits earned by a customer-generator from a billing month to successive billing months. Any unused credits shall accumulate until the end of the annualized period.
(e) At the end of each annualized period, the EDC shall compensate the customer-generator for excess kilowatt-hours generated at the EDC's avoided cost of wholesale power.
(f) The credit or compensation terms for excess electricity produced by customer-generators who are customers of EGSs shall be stated in the service agreement between the customer-generator and the EGS.
(g) If a customer-generator switches electricity suppliers, the EDC shall treat the end of the service period as if it were the end of the annualized period.
(h) An EDC and EGS which offer net metering shall submit an annual net metering report to the Commission. The report shall be submitted by July 30 of each year, and shall include the following information for the annualized period ending May 31 of that year:
(1) The total number of customer-generator facilities.
(2) The total estimated rated generating capacity of its net metering customer-generators.
(i) A customer-generator that is eligible for net metering owns the alternative energy credits of the electricity it generates, unless there is a contract with an express provision that assigns ownership of the alternative energy credits to another entity or the customer-generator expressly rejects any ownership interest in alternative energy credits under § 75.14(d) (relating to meters and metering).
(j) An EDC shall provide net metering at nondiscriminatory rates identical with respect to rate structure, retail rate components and any monthly charges to the rates charged to other customers that are not customer-generators. An EDC may use a special load profile for the customer-generator which incorporates the customer-generator's real time generation if the special load profile is approved by the Commission.
(k) An EDC may not charge a customer-generator a fee or other type of charge unless the fee or charge would apply to other customers that are not customer-generators. The EDC may not require additional equipment or insurance or impose any other requirement unless the additional equipment, insurance or other requirement is specifically authorized under this chapter or by order of the Commission.
(l) Nothing in this subchapter abrogates a person's obligation to comply with other applicable law.
§ 75.14. Meters and metering.
(a) A customer-generator facility used for net metering shall be equipped with a single bi-directional meter that can measure and record the flow of electricity in both directions at the same rate. If the customer-generator agrees, a dual meter arrangement may be substituted for a single bi-directional meter.
(b) If the customer-generator's existing electric metering equipment does not meet the requirements in subsection (a), the EDC shall install new metering equipment for the customer-generator at the EDC's expense. Any subsequent metering equipment change necessitated by the customer-generator shall be paid for by the customer-generator.
(c) When the customer-generator intends to take title or transfer title to any alternative energy credits which may be produced by the customer-generator's facility, the customer-generator shall bear the cost of additional net metering equipment required to qualify the alternative energy credits in accordance with the act.
(d) When the customer-generator expressly rejects ownership of alternative energy credits produced by the customer-generator's facility, the EDC may supply additional metering equipment required to qualify the alternative energy credit at the EDC's expense. In those circumstances, the EDC shall take title to any alternative energy credit produced. A customer-generator is not prohibited from having a qualified meter service provider install metering equipment for the measurement of generation, or from selling alternative energy credits to a third party other than an EDC.
(e) Meter aggregation within a particular rate class on contiguous and adjacent properties owned and operated by a customer-generator shall be allowed for purposes of net metering. Physical meter aggregation shall be at the customer-generator's expense. The EDC shall provide the necessary equipment to complete physical aggregation. If the customer-generator requests virtual meter aggregation, it shall be provided by the EDC at the customer-generator's expense. The customer-generator shall be responsible only for any incremental expense entailed in processing his account on a virtual meter aggregation basis.
§ 75.15. Treatment of stranded costs.
If a net metering small commercial, commercial or industrial customer's self-generation results in a 10% or more reduction in the customer's purchase of electricity through the EDC's transmission and distribution network for an annualized period when compared to the prior annualized period, the net metering small commercial, commercial or industrial customer shall be responsible for its share of stranded costs to prevent interclass or intraclass cost shifting under 66 Pa.C.S. § 2808(a) (relating to competitive transition charge). The net metering small commercial, commercial or industrial customer's stranded cost obligation shall be calculated based upon the applicable ''base year'' as defined in this chapter.
[Pa.B. Doc. No. 06-182. Filed for public inspection February 3, 2006, 9:00 a.m.]
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