FERC Dismisses Net Metering Jurisdiction Petition On Procedural Grounds

by Paul Ciampoli
APPA News Director
Posted July 16, 2020

The Federal Energy Regulatory Commission on July 16 dismissed on procedural grounds a petition that asked it to find that it has jurisdiction over energy sales from rooftop solar facilities and other distributed generation located on the customer side of the retail meter whenever the output of these resources exceeds the customer’s demand.

The American Public Power Association on June 15 argued that FERC should dismiss the petition without reaching the merits, saying that the matters on which the New England Ratepayers Association (NERA) sought a declaratory order were neither the source of controversy nor uncertainty (Docket No. EL20-42-000). APPA contended that NERA failed to identify any particular case or controversy from which the issues addressed in the petition arose, and that the petition improperly sought a broad, generic jurisdictional ruling untethered from any meaningful discussion of particular statutes or programs that implement net metering.

In response to the NERA petition, FERC determined that the issues presented in the petition “do not warrant a generic statement from the Commission at this time,” said FERC Chairman Neil Chatterjee at FERC’s monthly open meeting.

“In the order, we also note that the manner in which the Commission addresses a petition for a declaratory order depends on the specific facts and circumstances presented to the Commission,” Chatterjee said.

“Here, we find that the petition does not identify a specific controversy or harm that the Commission should address in a declaratory order,” he said.

Details on NERA petition

In its April petition, NERA sought a declaratory order from FERC that there was exclusive federal jurisdiction over energy sales from distributed generation located on the customer side of the retail meter whenever the output exceeds the customer’s demand or the energy from such a generator is designed to bypass the customer’s load.

The petition argued that a wholesale sale occurs when the output from behind-the-meter generation exceeds demand, and the rates for such sales must be priced in accordance with section 210 of the Public Utility Regulatory Policies Act (PURPA), or sections 205 and 206 of the Federal Power Act (FPA), as applicable.

NERA also asked the Commission to “find unlawful, and therefore reject, state net metering laws which assert jurisdiction over such wholesale sales and establish a price in excess of what PURPA or the FPA allows for wholesale sales subject to this Commission’s exclusive jurisdiction.”

APPA said public power net metering programs could be jeopardized

In its June filing, APPA noted hundreds of self-regulated public power utilities across the country accommodate their customers’ behind-the-meter resources through retail net metering programs.

Local control over these programs allows public power utilities to structure retail net metering approaches that respond to the policy preferences of their states and local communities, while seeking to ensure that the costs and benefits associated with distributed generation deployment are appropriately reflected in retail rates.

“Although the petition does not specifically address the use of net metering by public power utilities, the declarations requested by NERA, if granted, could jeopardize public power net metering programs in addition to the state laws that NERA asks the Commission to ‘reject,’” APPA said.

Granting the petition could render the distributed generation output of hundreds of thousands of public power utility customers subject to federal regulation, under the FPA or PURPA, APPA told FERC.

FERC should dismiss the petition without reaching the merits, APPA argued, saying that the matters on which NERA seeks a declaratory order are neither the source of controversy nor uncertainty.

It pointed out that the Commission’s policy with respect to authority over retail net metering programs has been well-settled for years and was recently reaffirmed in FERC Order Nos. 841 and 841-A, relating to storage resources.

“Granting the petition and upsetting the regulatory certainty that the Commission has fostered would be a recipe for creating, not terminating, controversy and regulatory uncertainty. The petition is potentially sweeping in scope and broadly applicable, yet it is not grounded in any concrete proposal or specific facts and circumstances, nor does the petition include sufficient information for the Commission to analyze and address the requested declarations,” APPA said.