Reposted from VTDigger. A bill that would make it easier for more people to generate their own electricity received overwhelming approval in the Vermont House of Representatives Tuesday.
Net metering allows residential electric customers to generate their own power using small-scale renewable energy systems. Any excess power that customers produce goes back to their utilities, essentially running their electric meters backwards. Customers then get a credit on their electric bill.
The bill allows a simple 10-day registration process for systems with capacities up to 10 kilowatts. Last year, that process was only available for systems half that size. Typical home solar systems are around 7 kilowatts. This bill also clarifies how utilities should calculate the extra six cents per kilowatt hour that people with solar net metering systems receive for the excess energy they produce.
Rep. Margaret Cheney, D-Norwich, who is vice chair of the House Committee on Natural Resources and Energy, said the bill will help clarify the benefits of net metering and simplify the process for slightly larger systems. It will also promote more renewable energy generation, she said.
“It is having real results,” Cheney said. “More small renewable energy systems are going up as a result of net metering laws.”
Vermont has allowed net metering since 1998, when it passed the first law allowing the practice.
The current law also addresses a controversy over net metering that has persisted over the years. It requires the Department of Public Service to issue a report analyzing whether and to what extent net metering systems are subsidized by other retail electric customers. The report is due Jan. 15, 2013.
Utilities and some ratepayers have raised concerns that customers with net metering systems are being subsidized by other customers.
Eric Werner, general manager of Hardwick Electric Department, said the small utilities in particular have concerns with net metering and the costs that are shifted to standard ratepayers.
The issue, Werner said, is when net metered customers provide power back to the grid because they produce more than they use, they receive retail rates for it. For example, a retail rate for electricity could be 18 cents per kilowatt-hour, but the utility pays 10 cents. The gap between retail and what the utility pays the generators of large-scale electricity is what pays for things like infrastructure upgrades and running the utility. Net metered customers, Werner said, can then use the grid but not contribute to the costs to maintain it.
“A lot of the issue is that net metered customers are getting an advantage, and costs are shifted to other customers,” Werner said.
Another issue, Werner said, is that installing things like solar systems generally requires a few thousand dollars, so the people who are getting the advantage generally have more money. For smaller utilities in particular, he said, net metering requires a large amount of time for staff to calculate the billing for customers with these renewable energy systems.
Cheney said the counter-argument to the subsidy argument is that all the small distributive generation provides a benefit to the entire state by alleviating utilities from having to make more capital investments. She said the study required in the new bill will hopefully put the debate to rest.
“If there does turn out to be a cost to ratepayers, we’ll do something about it,” Cheney said.
The bill still needs to go through a third reading and pass through the Senate.
Correction: This story originally stated that this year’s net metering bill will give people with solar net metering systems six cents more per kilowatt hour of excess solar energy. It will actually clarify how utilities calculate that extra six cents.