Governors' Wind Energy Coalition

Distributed-energy advocates in New York are trying to temporarily bring back the state’s net-metering system, with a little help from Darth “VDER.”

“I am Darth VDER, the Empire’s policy for crushing renewable energy projects,” the imperial villain said on a visit to the state capital last week.

“VDER” stands for the “value of distributed energy resources,” an arcane concept that state regulators are currently working to quantify. But the Energy Democracy Alliance, the edgy grass-roots group that pulled the stunt in Albany, says small-scale renewable projects are getting stifled in the transition — and it wants net metering back.

It’s not the only one. Steve Englebright, a Democratic member of the State Assembly, has sponsored a bill to restore net metering for all customer types until early 2021, saying this would give investors “predictability and stability.” State regulators would still have to design long-term VDER values, for residential and business customers, to transition to eventually.

The bill, A. 10474, passed the Democratic-controlled Assembly yesterday.

How it would fare in the more Republican-balanced Senate is less clear. (A parallel measure, S. 8273, has been offered by Republican Sen. Joe Griffo.) Nevertheless, it’s an unusual act of involvement by lawmakers who have, for the most part, let the wonky details of Democratic Gov. Andrew Cuomo’s grid reform get worked out in peace.

Utilities have pushed back against the proposals, saying net metering is inefficient for the system and that it forces people to pay for other people’s energy equipment.

“Distributed generation is essential to New York’s energy future, and a fair and balanced system should be applied to encourage its continued growth while not placing other customers at a disadvantage through significant cost shifting,” Energy Coalition New York, a group representing the state’s major utilities, said in a May memo. “If VDER needs improvement, that should be the objective — not delaying a solution for three years.”

Cuomo’s 2014 reform package, called “Reforming the Energy Vision,” or REV, includes work to integrate small-scale energy resources — like solar, batteries and smart appliances — onto the grid. That includes answering a key question for investors: What are those “distributed energy resources,” or DERs, worth in financial terms?

Historically, the answer was net metering: That is, if someone sent power onto the grid, that person got credit for that power at some preapproved rate.

In New York, the goal — openly supported by environmentalists, clean-tech interests and utilities — is to transition from that system to one that compensates for the things the state actually wants: help at congested points of the grid, for example, or producing power during peak demand.

The particulars are still being worked out. Early last year, the state Public Service Commission set up a transitional compensation regime for projects to use in the meantime.

Most commercial and industrial projects, as well as community solar, receive a payment called the “value stack” — an early estimate of benefits to the grid and environment. Every day, residents and small businesses that install DER receive a different payment that’s basically the same as net metering.

It’s the “value stack” number that’s concerning some small-energy interests, which say it’s holding back investment — especially in solar — instead of encouraging it.

One of the leading groups in the state, the Alliance for Clean Energy New York, is supporting the Englebright bill.

“This transition, even if well-intentioned, has led to a serious disruption in NY’s solar market,” the group said in a memo. “Many stakeholders note that this transition from net metering has chilled solar development and undervalued environmental, distribution, and transmission system benefits.”

ACE-NY said developers, in certain segments such as community solar, should at least have the option of going back to net metering, if that’s more conducive for them.