Net metering study wraps-up with two important wins

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At the culmination of a 15-month study of net metering, the Montana Legislature’s Energy & Telecommunications Interim Committee (ETIC) advanced two MREA priorities that will protect and expand rooftop solar. Both bills passed with bipartisan support and will be sent to the full Legislature for consideration in January 2017.

ETIC’s study of net metering policies and economic impacts was initiated by the 2015 Legislature after a series of bills to expand net metering, and one bill to significantly roll back the statute, were either withdrawn or died in committee votes. The study touched on a range of topics including methodologies to weigh the costs and benefits of net metering, economic impacts of the solar industry in Montana, and interconnection and safety standards.

Study findings
The bipartisan committee reached a series of conclusions about issues related to net metering, including the following Findings and Recommendations.

  • The current incentives for renewable energy systems (tax credits, USB, etc.) are “adequate, and changes to existing incentive programs…are not needed.”
  • “State net metering laws should not be extended to include rural electric cooperatives.” ETIC left unresolved the question of whether the statute, which only applies to NorthWestern Energy, should be extended to apply to the only other investor-owned utility in the state, Montana-Dakota Utilities (MDU).
  • The committee studied some of the underlying barriers to adoption of more customer-owned generation and resolved that, “(d)ecoupling Montana’s utilities from the requirement to sell more electrons to generate profits is an important first step to moving to a modernized interstate grid that values energy efficiency and a diverse portfolio of distributed energy resources.”

The full list of study findings and recommendations, as well as background research on many aspects of net metering can be accessed here.

Draft Legislation
ETIC forwarded five draft bills related to net metering to the full Legislature, including two MREA priorities (LCNET4 and LCNET5). The full text of the bills will be posted at this link in the coming weeks.

LCNET1 would require the Montana Public Service Commission (PSC) to review and update, if necessary, safety and interconnection standards for net metering systems every two years. The current rules for both NorthWestern and MDU are badly out of date and have gone largely ignored for more than six years. NorthWestern is in the midst of updating their interconnection agreements and procedures, and opposed the bill, suggesting a PSC-based process for reviewing and correcting out-of-date standards instead. MREA supported the bill concept, while remaining open to the option of PSC-based alternative. The bill passed ETIC on a vote of 8-0.

LCNET2 would remove the homeowner electric permit exemption for electrical work done by a homeowner on his or her own grid-tied generator. MREA took a neutral position on this bill at the September 8-9 ETIC meeting. The bill passed 8-0 with the support of NorthWestern and the IBEW.

LCNET3 directs the PSC to consider whether “alternative metering technology” should be required for net metering systems. The Commission already has the authority to consider alternatives to the standard bi-directional net meter; this bill simply directs that process to begin. MREA supported the bill, but urged several changes, including that the bill apply to metering technology for all customers, not just net metering systems, and that the bill require the PSC to take into account privacy considerations for customer generators when weighing alternative metering technology. The bill passed 8-0 without the changes requested by MREA.

LCNET4 would grandfather existing net metering customers under any future change to the net metering rate structure, providing the solar industry and consumers an important assurance that their investment will be protected. The Nevada public utility commission recently applied a drastic rollback of net metering to existing solar customers, bringing into sharp focus the danger solar consumers face without a grandfathering clause in law. The original version of this bill would have also triggered a review of net metering costs and benefits when production from net metering systems reached an estimated 1% of a utility’s retail sales. MREA argued the trigger language would have provided greater certainty to the solar industry and other net metering stakeholders (the threshold probably won’t be reached until 2020 or 2022 allowing time to establish a clear methodology for a study and gather data), but NorthWestern opposed the trigger and convinced the committee to strip the entire cost-benefit clause from the bill draft. The bill in its final form passed 8-0 with support from NorthWestern and MREA. This bill is an MREA priority for the 2017 Legislative Session.

LCNET5 would increase the 50 kilowatt net metering system cap to 250 kilowatts for government entities, including cities, counties, school districts, state government agencies, the university system, tribal governments and federal government entities. The bill was modified slightly from its original form, which would have extended the 250 kilowatt cap to all tax exempt entities. The bill drew opposition from NorthWestern Energy but passed in its final form on a vote of 6-2. This bill is an MREA priority for the 2017 Legislative Session.

MREA’s role and next steps
MREA played a central role in the interim committee’s study of net metering. MREA staff modeled and presented data detailing the benefits of net metering to other utility customers and the Montana economy, and testified at every meeting of the committee over the past year and a half, providing substantive feedback on the committee’s findings and recommendations to the Legislature.

MREA business members, including Jack Isbell—Solar Montana, Orion Thornton—Onsite Energy, Flathead Electric Cooperative, Janelle Stauff—Jordan Solar, Lee Tavenner—Solar Plexus, Henry Dykema—Sundance Solar, Brad Van Wert—Harvest Solar, and John Palm—Bozeman Green Build provided tours of their projects, supplied business information to the ETIC staff, and testified at key junctures. More than 400 individuals wrote the committee voicing their support for legislation that will expand and protect rooftop solar. MREA owes a huge “Thank You” to all of our allies at the Legislature.

Each of the draft bills listed above will be introduced at the Legislature in January 2017 with the endorsement of ETIC, but ultimately those bills will still have to make their way through committees of the House and Senate, full floor votes of the House and Senate, and across the Governor’s desk before they become law.