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Protecting Common Sense Installation Design at the PSC

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Small Generator Interconnection Procedures (“SGIP”) are the technical documents used by the utility and by solar, wind, and other energy developers to guide how energy systems are interconnected to the utility grid. They cover everything from the application forms and paperwork that need to be filed, all the way down to the safety standards for the equipment used. It covers net metering customers, but also larger systems.

Recently, the Montana Public Service Commission opened a docket related to these guiding documents that addressed the nuanced but important definition of a "premises", which impacts how renewable energy systems could be designed. MREA weighed in on this docket to ensure the definition does not restrict common sense installations.

How is premises defined in statute, and why is this important? 

Montana laws lack guidance on the premises definition, which is the problem. In 2018, both NorthWestern Energy (NWE) and Montana-Dakota Utilities (MDU) separately filed updates to their SGIP documentation with the PSC. In those dockets, both shared different interpretations of the definition of a premises for net metering customers. It's important to note that these were interpretations of "premises" since Montana law lacks a guiding definition of premises in this context. Despite lacking a guiding definition, Montana laws state that a net metering system must be located “on a customer’s premises.” For that reason, a guiding definition of premises – or lack thereof – has big implications on how renewable energy systems could be designed and installed.

Without a guiding definition, the utilities instituted their own interpretations. These interpretations are restricting practical and common sense installation designs, preventing Montanans from taking full advantage of the excellent solar and wind resources that we have. These interpretations became one of the focal points in those 2018 dockets. At the close of both dockets, the PSC was not satisfied with either premises definition proposed by the utilities and noted that they wanted one, single definition that would be used consistently for both utilities. In April 2020, the PSC initiated a rulemaking process in order to create a new, single definition.

What happened in the rulemaking process?

To begin the rulemaking, the PSC proposed its own definition of "premises" and sent it out for public comment. In our comments, MREA points out that the language of the PSC's proposed definition has several ambiguities and seemingly conflicts with itself. Still, our understanding of the intent of the PSC’s definition is to allow a net metering system on each meter that someone has on their property, but that if a person has multiple meters on their property (or properties) the total combined or aggregated capacity of all of the systems installed must be not greater than 50 kW (the single system limit defined in statute). So, if you have two meters on your property you can install two systems but the total combined capacity must be less than 50 kW – e.g. 25 kW on each, or 20 kW on one and 30 kW on the other, or some other combination. The definition did not consider other issues, such as how rental properties are addressed or how property boundaries affect this definition. MREA addressed this and other exclusions in our comments. 

The discussion of the premises definition is a convoluted one, but has three distinct elements. The first is the physical boundaries of a “premises”; the second is the allowance for a net metering system to be installed on each metered electrical service; and the third is whether to impose an aggregation limit if multiple systems are installed on a property. MREA suggested the Commission clarify the physical boundaries to address rented or leased properties, which are an important consideration. We supported the Commission’s intent to conform with Montana laws and allow net metering systems on any or all meters on a customer’s premises. And finally, we recommended against imposing an aggregation limit for multiple systems on a property. These three stipulations allow practical, common sense installation designs that also conform with Montana statute. 

MREA suggested language for the Commission to consider that addresses all of these goals and issues. You can read MREA's full comments and arguments here. MREA staff participated in a public hearing on June 2nd to present a summary of our written comments. Representatives from NWE and MDU also participated, as did a low-income housing developer who strongly supported MREA's positions. There was a good amount of overlap between MREA's position and what NWE and MDU proposed. 

What happens next?

The PSC staff are considering changes they want to make to the original definition they proposed based on the input they received from MREA and other commenters. Once they finalize their proposed changes, they will present them to the Commissioners during a work session. At that time, the Commissioners will discuss and eventually vote on a definition to approve. We are expecting a ruling by August, at which time MREA will assess what further action may be needed.