RCA adopts net metering rules

Posted: Thursday, October 22, 2009

In a move praised by alternative energy advocates, the Regulatory Commission of Alaska last Wednesday approved regulations setting net metering requirements for large electric utilities. The regulations won't become effective until after being reviewed by the Alaska Department of Law and signed by Lt. Gov. Craig Campbell.

"Net metering" has been defined differently by the more than 40 United States which have adopted the practice. In general, it means that homes or businesses which set up solar, wind-energy, small-scale hydro or other alternative power systems can send power back into the electric grid and receive credit at either a kilowatt-hour or dollar basis. Some net metering supporters think it should mean spinning the electric meter backward -- reducing kilowatt hours billed on only a kwh basis.

For the 21 producers on the Kenai Peninsula now generating solar or wind power, or anyone contemplating such a system, the RCA net metering regulations make alternative power more economical.

"It's the only fair thing to do for independent people," said Michael Limacher, who installed a 2.4 kilowatt Skystream wind-energy system at his Diamond Ridge home last summer. "It will achieve what I'm after: reducing carbon footprint, becoming more energy independent."

"I'm pleased that they (RCA) have adopted a net metering program for the state of Alaska," said Rep. Paul Seaton, R-Homer. Seaton had filed House Bill 288 in 2007 and House Bill 66 last session to establish through legislation net metering regulations. Seaton had held up HB 66 while RCA considered net metering.

If signed into law, the state net metering regulations would:

* Credit producers on a kilowatt hour basis for power they put back into the grid; and

* Pay producers on a monthly basis the wholesale or non-firm power rate for any excess power put back into a grid.

Those regulations differ slightly from Seaton's bill. He had proposed crediting producers on a kwh basis and adjusting utility bills annually.

Under the RCA regulations, if a homeowner received 1,000 kwh from a utility, and had a wind-energy system that produced 500 kwh, the producer would get billed for 500 kwh -- the amount of power produced would be deducted from the amount consumed. If the homeowner consumed 1,000 kwh but produced 1,500 kwh, the utility would pay the producer 500 kwh at the wholesale rate.

"I wish they had adopted more of the consumer friendly, consumer advantages that we had put in the bill," Seaton said.

Paying for excess power on a dollar amount could cause some tax implications, Seaton said. The sale becomes a business transaction.

"That's why we had in our bill (kilowatt hours)," he said. "We were trying to get rid of those unintended consequences."

Alternative-energy advocates had pushed for calculating net-energy consumption annually -- the main concession made in the process, said Andy Baker, an alternative-energy consultant with YourCleanEnergy in Anchorage. Baker had participated in net-metering workshops with RCA.

"We want something that will work. The compromise was a reasonable one," he said of the process.

Homer Electric Association has a form of net metering through its SNAP, or Sustainable Natural Alternative Power, program, also called interconnection. HEA credits energy produced only on a wholesale cost basis. A producer that gets 1,000 kwh and produces 500 kwh would see a bill for 1,000 kwh at the retail rate, or 15 cents a kwh, minus 500 kwh at the wholesale rate, about 6.5 cents a kwh.

HEA has not yet fully analyzed how the RCA regulations compare to HEA's policy.

"We need to go through it, understand it," said HEA spokesman Joe Gallagher. "There are some components of it that need to be reviewed."

Although some think of net metering as turning an electric meter backward, HEA actually uses a dual meter system for its interconnection customers. The meter measures two flows of energy: HEA power going to the consumer-producer and power from the producer going back into the grid, said Brad Hibberd, HEA conservation and energy efficiency manager.

The RCA net metering regulations apply to Alaska electric utilities that sell more than 5 million retail kwh annually. That includes HEA, which sells 523 million kwh. The regulations affect most of the Railbelt utilities, but don't apply to most rural Alaska utilities except Bethel.

"I liked our way of handling it better," Seaton said. "I'm still pleased that we have net metering for Alaska."

Baker said the RCA regulations aren't perfect, but are a good start.

"It's like buying a car," he said. "You've got wheels, you've got an engine, but you don't have AM/FM radio. You can go down the road."

Michael Armstrong can be reached at michael.armstrong@homernews.com.

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