Mich. PSC approves net-metering replacement

Source: Jeffrey Tomich, E&E News reporter • Posted: Friday, April 20, 2018

Michigan became the latest state to approve a move away from net metering in an action that renewable energy advocates warned will only serve to inject uncertainty into a slow-developing residential solar market.

The Public Service Commission voted 3-0 to replace the state’s net-metering policy with a new billing methodology proposed by commission staff.

The 21-page order comes in response to new energy laws signed by Gov. Rick Snyder (R) in December 2016. The sweeping laws required the commission to establish a cost-of-service-based distributed generation tariff.

The PSC staff conducted a series of workshops with utilities, advocacy groups and other parties last year before producing a study in February that proposed a new billing methodology.

The methodology approved by the PSC yesterday separates the “inflow” of energy from the grid from energy “outflow” from customer-owned generating systems. Under net-metering, energy consumption is netted against excess production (Energywire, March 26).

The PSC staff said the inflow-outflow method is simple; provides clear pricing signals; supports further deployment of new distributed energy resources, such as energy storage; and is adaptable to new rate designs, such as time-varying rates.

The distributed generation tariff approved by PSC yesterday won’t take effect immediately.

Utilities must seek specific approval of the tariff in a rate case filed after June 1, or they can propose an alternative, according to yesterday’s order.

That means existing net-metering programs will remain available for at least another year and existing customers will be grandfathered under net-metering tariffs for a decade after a replacement is finally approved by the PSC.

Michigan’s largest utilities, DTE Energy Co. and Consumers Energy, each said yesterday that they support customers’ having the option of installing distributed generation systems. But they want to ensure those customers are paying their share to maintain the grid.

“The costs associated with the distributed generation system should be priced fairly and equitably based on the cost to serve these customers,” DTE spokeswoman Carly Getz said in a statement.

But solar advocates said the commission was given no data to demonstrate that rooftop solar owners are being subsidized by other customers. In fact, what little actual data was included in the staff’s study showed the opposite, they said.

Becky Stanfield, an advocate with Vote Solar, said the commission’s order will only inject more uncertainty into a market that has been slow to take off.

“It leaves people with a huge amount of uncertainty for a long time,” Stanfield said.

Amy Heart, a spokeswoman for the Alliance for Solar Choice, said the industry will be looking at all options to undo the PSC’s order, including legislation.

“This decision will restrict homeowners’ ability to invest in rooftop solar and threatens to destabilize Michigan’s solar industry, putting thousands of jobs at risk,” Heart said in a statement.

According to the most recent PSC annual net-metering report for 2016, there were just over 2,500 customers participating in utility net-metering programs, representing 0.024 percent of the state’s total retail electricity sales.

Advocates said the low penetration of customer-owned solar in Michigan gives regulators time to conduct additional analysis of both the costs and benefits of distributed solar before making changes to net-metering programs.

The PSC staff, in fact, acknowledged that they had spent little time assessing the benefits of rooftop solar and suggested that the commission establish a separate contested proceeding to determine the appropriate rate to credit customers for excess energy.

But the commission disagreed and said another case is unnecessary to comply with Michigan’s new energy laws.

“The statute directed the commission to develop a tariff, not a specific assigned rate, and the commission finds that the inflow/outflow tariff resulting from the study satisfies the requirements,” the order said.