The Public Utility Commission Thursday adopted revised regulations of the Alternative Energy Portfolio Standards Act of 2004, clarifying certain issues related to net metering, interconnection and compliance provisions.

The Commission voted 3-2 to adopt the Final Rulemaking Order following an extensive review of public comments on the proposed changes, which were initially sought in February 2014 and again in April 2015. 

In a statement supporting adoption of the rulemaking, Commissioner Robert F. Powelson stressed concerns about consumer protection; highlighted the lengthy process for public input and Commission consideration regarding this rulemaking; noted that similar policies are being considered across the country; and recognized the extensive work by PUC staff to address these issues in a balanced manner.

“I firmly believe that all of the new regulations contained in the Order being voted on today are much-needed consumer protections, particularly the 200 percent limitation on systems that are eligible for net metering and the clarification of the definition of virtual meter aggregation,” Powelson said.  “These regulations are narrowly tailored to balance the Commonwealth’s policy of promoting the development of renewable generation sources with the Commission’s mandate of maintaining affordable and reliable electricity service for consumers.”

In dissenting statements, Chairman Gladys M. Brown and Vice Chairman Andrew G. Place agreed that consumer protections are a priority for the Commission and also praised the efforts to PUC staff throughout this process – but disagreed with the rulemaking mechanism used to secure those protections.

“The rationale for imposing the 200 percent limit is noble in that it recognizes that any above market payments made to customer generators are paid for by the rest of the rate paying class of customers,” Chairman Brown said. “Any rational regulator would be tempted to limit a customer generator from being paid retail rates for energy produced by a system that was purposefully oversized –but, setting such a limit ignores the very specific size limitation provided in the AEPS Act.”

Vice Chairman Place argued that the public, including retail customers and customer-generators participating in net-metering programs, would be better served if the Commission reevaluated how the retail value of electric generation is determined, rather than adding further constraints.

“I firmly believe that consumers are best served by getting the ‘retail value’ price right, rather than by seeking to impose net metering capacity restrictions which are not in the Act,” said Place. “Sufficient market signals exist to achieve both the goal of supporting the deployment of alternative generation as well as the obligation to do so at a cost that matches the consumer benefits of retail distributed generation.”

Among other things, the rulemaking addresses the following

-- The addition of definitions for aggregator, default service provider, grid emergencies, microgrids and moving water impoundments;

-- Revisions to net metering rules and inclusion of a process for obtaining Commission approval to net meter alternative energy systems with a nameplate capacity of 500 kilowatts or greater;

-- Clarification of the virtual meter aggregation language;

-- Clarification of net metering compensation for customer-generators receiving generation service from electric distribution companies, default service providers and electric generation suppliers;

-- Addition of provisions for adjusting Tier I compliance obligations on a quarterly basis to comply with the Act 129 of 2008 amendments;

-- Clarification of the authority given to the Program Administrator to suspend or revoke the qualification of an alternative energy system and to withhold or retire past, current or future alternative energy credits for violations; and

-- Standards for the qualification of large distributed generation systems as customer-generators. 

The revisions adopted by the Commission will now be submitted for review to the Office of Attorney General, the Governor’s Budget Office, designated committees of both houses of the General Assembly and the Independent Regulatory Review Commission.

Following those reviews, the Final Rulemaking Order will become effective upon publication in the Pennsylvania Bulletin.

For more information, visit the PUC’s Alternative Energy Portfolio Standards webpage.

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