How utilities deal with distributed energy resources like rooftop solar and small business solar is a topic of hot debate across the US that has divided homeowners, solar installers and utilities. The newly published manual: Distributed Energy Resources Rate Design and Compensation from the National Association of Regulatory Utility Commissioners (NARUC) should help all players, solar installers, utilities and utility commissions make designing a fair plan a less acrimonious process for all.
“The reason for this manual is that the nature of electricity delivery, consumption, generation, and grid itself are changing, and changing rapidly,” the executive summary stated. Chief among those is net-metering, which many states have enacted to encourage rooftop solar. Under net-metering customers are paid for the energy they put back on the grid, often at rates as high as the rate they pay for electricity. The manual discusses how distributed energy generation affects existing regulatory and utility models and offers rate design and compensation options.
“Time and again, state public utility commissions and independent researchers have found that distributed solar provides a net benefit to all consumers and we’re happy to see this more adequately and accurately represented in the final version of this manual,” said Sean Gallagher, vice president of state affairs for the Solar Energy Industries Association (SEIA).
Distributed generation and the schemes to properly reimburse utility customers with onsite electric generation for the power they send back to the grid has risen to fights across the country from Utah and Arizona to the southeast. Utilities are concerned about reaping returns on their investments in the grid and electric generation. Many utilities are concerned that paying customers with onsite generation at retail rates threatens those expected returns.
“This publication was a major undertaking by the staff subcommittee and we appreciate their hard work and the many valuable comments we received from commissions and stakeholder groups,” said NARUC President Travis Kavulla. “Although the manual is not the final word on the subject, it will be a useful practical resource for regulators.”
“It’s no secret, distributed energy is proliferating in America and in this new energy paradigm having well-thought-out guidance and regulations in place is critical to maintaining that forward momentum,” Gallagher noted. He added, “Rate design is not a simple task and it has far-reaching impacts. The manual recognizes that hard data and evidence is needed before imposing new rate structures on customers, and that imposing class-wide rate design changes when DER penetration rates are low ‘would most likely be a disproportional response.”
The association developed the publication over the past year. The process included considering more than 70 comments from stakeholder groups that were submitted organization.Tweet