Following months of testimony and review, the Ohio Public Utilities Commission on Nov. 8 adopted a common set of net metering rules that attempt to strike a balance between customers who own electric generating facilities and electric utilities and competitive power suppliers.
The rules, endorsed in a unanimous 3-0 vote, "enhance the state of Ohio's energy policy by establishing consistent, statewide parameters for net metering, and foster a competitive marketplace for innovative products and services," said PUC chairman Asim Haque. The commission, he added, will continue to monitor its policies as more customers take advantage of net metering opportunities.
The ruling appears to be a trade-off of positions advanced by competing constituencies.
Some utilities, for example, objected to a provision that allows a net metering facility to be sized based upon 120% of a customer's average annual electric usage, at the time the facility is connected to the electric grid.
Duke Energy Ohio, for example, asserted that allowing customer-generators to size their net metering systems at 120% of their requirements could present distribution engineering problems on the utilities' electric distribution facilities.
AEP Ohio, meanwhile, argued the 120% requirement should be continuous, "such that customer-generators must not generate in excess of 120% of their requirements for electricity on a going-forward basis."
All of Ohio's investor-owned electric utilities, including FirstEnergy, agreed that net metering facilities should be sized at 100% of a customer-generator's requirements for electricity.
Direct Energy, an alternative supplier, sided with the utilities on this issue while the Environmental Advocates, including the Ohio Environmental Council, Ohio Office of Consumers' Counsel and IGS Energy supported the 120% limit on excess generation.
In settling on the 120% limit, the commission said the requirement will apply regardless of whether a customer-generator is taking service from a utility or competitive provider. "Since the limit is applied at the time of interconnection, and interconnection is a process conducted by the electric utilities, the facility size limit will necessarily be applied to all facilities, regardless of whether the customer-generator is shopping for electric service with a [competitive] provider," the PUC said.
On another issue, the commission said some bill credits earned by existing net metering customers will be reduced. However, the commission said, customers receiving the standard service offer from regulated electric distribution utilities will continue to be compensated for excess energy supplied to the grid in the form of a monthly bill credit at the utility's standard service offer rate for energy. Customers who receive service from a competitive supplier may be credited at a rate agreed to in their contract for service.
The PUC reaffirmed that a net metering system must use as its "fuel" either solar, wind, biomass, landfill gas or hydropower, or use a microturbine or fuel cell. Reciprocating engines that typically run on natural gas are not permitted, the commission said in denying an IGS proposal.
Commissioners also agreed with utilities in denying a proposal by the OCC, the state's residential utility watchdog, that utilities be required to offer time-differentiated rates through a time-differentiated standard service offer.
OCC maintained this would allow net metering customers to realize the full benefit of their energy supply contribution, particularly in areas where competitive providers are not offering such rates.
But time-differentiated rates, the PUC opined, "are outside the scope of this proceeding." The issue will be addressed "in a more appropriate proceeding," it added.
While it is still reviewing details of the PUC's 34-page order, AEP Ohio, a subsidiary of Columbus, Ohio-based American Electric Power, said in a Thursday statement it appears the commission "made some significant improvements to the rule to appropriately balance the ability of net metering customers to receive a credit for the excess electricity they produce while also maintaining the integrity of the electric system and ensuring that all users of the grid support its operation."
PUC spokesman Matt Schilling said the net metering rules apply to all of the state's electric IOUs and competitive power providers. Municipal electric systems and electric co-ops are exempted because they are not regulated by the commission, he noted.
The order opened a 30-day window in which stakeholders can ask the commission to reconsider its ruling. If there is a rehearing request, which is likely, it will delay the PUC's submittal of the final net metering rules to Ohio's Joint Committee on Agency Rule Review, which has to approve them before they can take effect.
In any event, that means it probably will be the first quarter of 2018 or so before the rules will be in effect.