NARUC Files Protest Opposing NERA Net Metering Petition
June 17, 2020 -- The National Association of Regulatory Utility Commissioners this week filed a protest opposing the New England Ratepayers Association net energy metering petition, currently before the Federal Energy Regulatory Commission. NERA has asserted that there is exclusive federal jurisdiction over the wholesale energy sales from generation sources located on the customer side of the retail meter, and that the rates for such sales be priced in accordance with federal law.
As NARUC stated in its request for an extension to respond to the petition, NERA’s position is absolutely contrary to the current policy, which places these programs under state authority.
In the protest filed today, NARUC contends that NERA has disregarded the potential for disruption to the system and the detrimental effect on retail customers and state and federal policy makers, who have relied for decades on FERC’s determination that net energy metering falls within state retail ratemaking jurisdiction.
“This entity, known as NERA, has not provided any specific examples from any state on which it has based its petition, yet wants to falsely assert that net metering programs, rates and regulations in nearly every state are unlawful, placing them under a rigid federal regime,” said Mississippi Commissioner and NARUC President Brandon Presley.
NARUC argues four core reasons in the protest why FERC should not grant the petition, the first of which notes that the current practice falls outside the wholesale scope: “…the outflow of energy from a retail customer to its local utility is not a wholesale sale, and netting those outflows against inflows when measuring the retail service provided during a billing cycle does not set a wholesale rate.”
A second rationale speaks to federal jurisdiction. NERA cites two cases, MidAmerican and Sun Edison, to support its assertion. However, in both of those cases, D.C. Circuit ruled that FERC does not have jurisdiction to “…displace the state’s netting rules for measuring whether retail sales had occurred.”
FERC is further precluded from asserting jurisdiction because a homeowner or business does not engage “in interstate commerce” when energy flows out from the home or business to the local utility’s distribution system; therefore, under the Federal Power Act, FERC has no jurisdiction to regulate the local outflow from these net metered facilities.
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