State regulatory review board rejects PUC's net-metering limits

A state regulatory review board has struck down limits on how much surplus electricity customers who have their own alternative energy generators, like rooftop solar panels, can sell back to utilities in Pennsylvania.

The five-member Pennsylvania Independent Regulatory Review Commission on Thursday unanimously rejected the caps, which were established by the Public Utility Commission in February after a contentious public rulemaking process. The rules would have limited the amount of electricity a customer can sell to a utility at full retail rates — a process known as net metering — to 200 percent of that customer’s annual consumption.

At issue was whether the PUC had the legal authority to impose the limits. The review commission rejected the rules because the PUC “could not point to any statutory language or anything from the General Assembly that said they were permitted” to set the 200 percent cap, IRRC executive director David Sumner said.

Net metering was permitted as part of the 2004 Alternative Energy Portfolio Standards Act, in which legislators set a capacity limit for residential systems at 50 kilowatts. They also capped commercial systems at three megawatts and industrial systems at five megawatts.

But the PUC wanted to go further, imposing an additional limit on the size of solar installations based on how much power customers generate above their consumption. In approving the rules in a 3-2 vote in February, the PUC called the net metering limits an important consumer protection that balances renewable energy growth with keeping power prices affordable.

“A key point in this discussion is the intersection of two state mandates,” PUC spokesman Nils Hagen-Frederiksen said. “The requirement that customer-generators receive the ‘retail value’ for any excess power that is returned to the grid,” he noted, “potentially contradicts the requirement that utilities acquire power in a manner that ensures the lowest price over time for consumers.”

The review commission’s rejection Thursday comes after the state Department of Environmental Protection last week urged that the limits be scrapped. The cap was also opposed by alternative energy advocates, including the solar and landfill gas-to-energy industries.

Utilities generally supported a lower limit on the size of energy systems that qualify for net metering.

Mr. Hagen-Frederiksen said the PUC will review the regulatory review commission’s action as well as recent public comments on the rules before deciding how to proceed.

The PUC can either withdraw the regulation or resubmit it to IRRC, with or without revisions, within 40 days for another review.

The changing makeup of the PUC will be a factor influencing any path forward for the rules. One of the majority votes in favor of the net-metering limits, Pamela Witmer, left the commission in April after her term expired. Gov. Tom Wolf has nominated his senior energy adviser David Sweet to fill the vacancy, but the nomination must first be confirmed by a majority of the state Senate.

Daniel Moore:, 412-263-2743 and Twitter @PGdanielmoore. Laura Legere:

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