Net Metering in Retail Choice States

Laurel VarnadoJustin Barnes

Kevin FoxJuly 15, 2010

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Map of Retail Choice States

14 States plus D.C. allow retail choice

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General Market Structure of Deregulation

•Entails breaking up vertically-integrated companies into distribution utilities and retail suppliers

•Distribution utilities (wires and lines), retail suppliers (energy)

•States have different configurations of these relationships

Goal of the Report

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Generate a firmer idea for how net metering functions in states with retail choice, including problems that have arisen and their solutions.

•Utility Definition(s) – Ex. Delaware: Statute: PSC, municipal utilities and cooperatives must

"Ensure that electric suppliers provide net-metered customers electric service at nondiscriminatory rates..." Statute: "Electric supplier" means a person or entity certified by the Commission that sells electricity to retail electric customers utilizing the transmission and/or distribution facilities of a nonaffiliated electric utility.

•Net Metering Required for Competitive Suppliers?

•Separate Competitive Supplier Rate Option

Preliminary Research Areas

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•Permitted Meter Configuration•Competitive Billing Configuration

-Ex. New Jersey: Supplier Option. Customer apparently may request to be billed directly by the supplier.

•Other Related Definitions•Rollover Provisions•Charges

-Ex. Connecticut: A customer…with a nameplate capacity of more than ten kilowatts of electricity...shall be assessed for the competitive transition assessment and the systems benefits charge, based on the amount of electricity consumed by the customer…without netting any electricity produced by the customer.

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Initial Questions to Answer•Do net metering laws apply to competitive suppliers? If so how and on what terms?• How is net metering accomplished in terms of physical metering and billing? Who has billing responsibility?• What happens to exported energy?• Might net metering be irrelevant in some cases (i.e., residential customers, large customers/smaller system, NM capacity limits?)

Our general approach to this is to review of statutes and regulations and sort out areas of uncertainty with stakeholders (e.g., utilities, competitive suppliers, PUC staff).

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Stakeholder Questions•Have there been issues with administering net metering in competitive markets? If so, what were the issues and how were they solved?• In states where net metering is not required for competitive suppliers, do any suppliers offer net metering?

- Have suppliers considered it? Why or why not?- What were the deciding factors?- Have they received requests?

• Does competition for customers actually lead suppliers to offer net metering?• Is there communication between different branches of the same company (e.g., energy generation, retail sales, regulated utility).

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Additional Areas of Interest•How is REC ownership determined in jurisdictions where shared customer/utility ownership exists?• For customer-owned RECs, are there opportunities for REC transactions in conjunction with net metering?

- Does this currently occur?- Would this interest customer-generators?- Would this interest a competitive supplier with RPS

compliance obligations?• Do competitive rate options differ significantly in structure from SOS options? Do any differences affect the value of net metering to the customer, or lack compatibility with net metering terms?

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Comments or Questions? Please contact us:

Laurel Varnado: lavarnad@ncsu.eduJustin Barnes: justin_barnes@ncsu.edu

Kevin Fox: kfox@keyesandfox.com