The Pennsylvania Public Utility Commission (PAPUC) voted 3-2 on Thursday to adopt a Final Rulemaking Order (Order), which included significant revisions to the regulations of the Pennsylvania Alternative Energy Portfolio Standards Act of 2004 (AEPS Act) relating to net metering and interconnection for renewable energy resources.

Among other items, the changes to the existing regulations include the following:

  • Revisions to net metering rules and inclusion of a process for obtaining PAPUC 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 (EDCs), default service providers (DSPs) and electric generation suppliers (EGSs).

  • 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.

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

Notably, in the Order, the PAPUC has implemented a size limitation that excludes owners or operators of an alternative energy system that is designed to produce no more than 200 percent of a customer‑generator’s annual electric consumption (subject to certain exceptions) from eligibility for net metering. The AEPS Act provides that only systems not greater than 50 kW for residential service or not larger than 3 MW for other customer service locations and not above 5 MW for systems that are available to operate in parallel with EDC during grid emergencies or to support a microgrid are permitted to receive the benefits of net metering. The PAPUC found that adoption of the 200 percent limitation is consistent with AEPS Act on the basis that it is unnecessary and unfair for ratepayers to be required to finance the difference between the retail and wholesale price of the electricity produced by oversized distributed generating systems. PAPUC Chairman Gladys M. Brown and Vice Chairman Andrew G. Place each issued dissenting statements with respect to the adoption of this size limitation as inconsistent with the specified limits in the AEPS Act.

Ballard Spahr’s Energy and Project Finance Group assists clients in developing strategies to thrive in the fast-changing regulatory, technological, and financing environment of the energy industry.


Copyright © 2016 by Ballard Spahr LLP.
www.ballardspahr.com
(No claim to original U.S. government material.)

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, including electronic, mechanical, photocopying, recording, or otherwise, without prior written permission of the author and publisher.

This alert is a periodic publication of Ballard Spahr LLP and is intended to notify recipients of new developments in the law. It should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own attorney concerning your situation and specific legal questions you have.