PUCO urged to consider aggregate and virtual net metering


A rulemaking at the Public Utilities Commission of Ohio (PUCO) continues to highlight intense debate on the issue of net metering. [1]  As “Net metering in the spotlight,” a past Green Strategies analysis, discusses in more depth, certain net metering policies are currently being contested at the PUCO and before the Ohio Supreme Court. The primary issue in both forums is how the credit for excess generation from the utility to the net metering customer is calculated. This issue has been the crux of the net metering disputes not only in Ohio but also in states across the country.

While the primary focus of the net metering debate is the issue of how the excess generation credit is calculated, other issues of significance have emerged in the most recent iteration of the PUCO’s net metering rulemaking. One such issue is aggregate and virtual net metering.

The PUCO’s net metering rulemaking process started over two years ago. In January 2014, the PUCO, after undergoing full notice and comment rulemaking procedures, issued an order adopting a final net metering rule. After a series of applications for rehearing by various interested parties on the net metering provisions, the PUCO issued an order in March 2015, finding that additional input pertaining to the net metering rules would be beneficial. A workshop of stakeholders was then held in May 2015. Subsequently, on November 18, 2015, the PUCO issued another order, again seeking comment on a set of proposed net metering rules. It was this order that initiated the current rulemaking.

Net metering allows customers of electric distribution companies to generate their own electricity in order to offset their electricity usage. Traditionally, however, net metering is limited to an onsite distributed generation system that is associated with a particular meter. This limitation can be problematic for customers with multiple buildings and meters, such as local governments and corporate campuses, who wish to benefit from a single distributed generation system. Aggregate net metering addresses this problem by allowing one or more customers to combine their electrical meters for the purpose of net metering.

Another policy to create more flexible net metering arrangements is virtual net metering. Virtual net metering allows several customers to participate in meter aggregation even if they are located on non-contiguous properties. For example, virtual net metering allows multiple homeowners to share the output of a single distributed generation system that is not physically connected to their property (or meter) and receive credit for that output under a net metering program. 

Virtual net metering provides additional benefit to traditional net metering policies. First, it enables optimization of siting for distributed generation projects by allowing more location options for a system. Virtual net metering also allows for economies of scale, thereby reducing project costs. If multiple owners can benefit from a single system, a larger project may be developed. In addition, virtual net metering, which can be subscriber based, can enable renters and condominium owners to partially own, and benefit from, distributed generation systems.  

The overwhelming majority of states, including Ohio, has traditional net metering policies.  Only a handful of states, however, have policies to allow aggregate net metering: Oregon, Nevada, California, Utah, Arizona, New Jersey and Maryland. Even fewer states have authorized virtual net metering: Pennsylvania, New Hampshire, California and Connecticut. [2]    

A number of the participants in the current net metering rulemaking before the PUCO are now urging that the PUCO open a separate proceeding to determine how aggregate and virtual net metering may be implemented in the state. In its January 2014 order the PUCO indicated that the it would “open a new docket for the purpose of continuing to consider and evaluate virtual and aggregate net metering.” Two years later, no such docket has been opened by the PUCO. Various commenting parties are now calling for the PUCO to finally follow its own order.

[1] In the Matter of the Commission’s Review of Chapter 4901:1-10 Ohio Administrative Code Regarding Electric Companies, Case No. 12-2050-EL-ORD.

[2] National Conference of State Legislatures, Net Metering: Policy Overview and State Legislative Updates (December 18, 2014), available at http://www.ncsl.org/research/energy/net-metering-policy-overview-and-state-legislative-updates.aspx.

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