A Proposed Decision issued by Administrative Law Judges Debbie Chiv and Kelly A. Hyme of the Public Utilities Commission of California rejects a fundamental tenet of many community renewable (CR) programs. That tenet is that wholesale power sales can be “erased’ by couching cash payments to CR generators as “bill credits.” Although FERC has made clear that net energy metering (NEM) programs can eliminate the existence of wholesale power sales, the Proposed Decision rejected arguments that a proposed CR program was similar to a NEM program. The ALJs accepted the argument that “the use of the term ‘credit’, when there is no retail bill being offset by the credit, and the proposed banking of credits, when there is no subscriber to receive the credits, is not net energy metering.” As a result of finding that the proposed CR program (using a net value billing tariff approach (NVBT)) could not be squeezed into the NEM concept, the Proposed Decision held that, as with any compelled wholesale power purchase at a state-set rate, PURPA would apply.
Assuming the Proposed Decision remains largely intact, it has no immediate impact on existing CR programs. (It may send some CR generators scurrying for QF status.) CR programs can and do work, if CR generators are paid a reasonable price that does not create unacceptable cost shifts. Nonetheless, the CR industry may try to convince FERC to greatly expand the concept of NEM if the Proposed Decision stands. FERC should not bite. CR programs and PURPA have co-existed for well over a decade and can continue to do so as discussed below.
Continue Reading Community Renewable Generators: Wholesale Power Sales Versus Net Energy Metering