Pa. PUC Proposes to Allow Net Metering for Projects Not Owned by Host Customers

The Pennsylvania PUC adopted a motion from Chairman Robert Powelson to issue for comment an interpretation of the Alternative Energy Portfolio Standards (AEPS) Act that permits the net metering of facilities even where not owned by the host customer (such as for financing reasons).

Powelson noted that a business model exists whereby an alternative energy system developer will install a system while maintaining ownership and performing all maintenance and operation functions of the system. The electricity generated is then sold to the customer through a PPA. Powelson said that proponents of this business model are concerned that the AEPS Act and corresponding PUC regulations could be interpreted as excluding such facilities from net metering.

Powelson proposed that it be the policy of the Commission to allow net metering of systems developed under this business model. Specifically, the PUC would interpret the term "operator' as used in statute as including customer-generators with distributed alternative energy systems that contract with a third party to perform the operational functions of that system.

Powelson proposed limiting this interpretation to alternative energy systems installed on property owned or leased by the customer-generator and designed to generate no more than 100% of the customer-generator's prior-year electric consumption. Additionally, nameplate capacity of the system could not exceed the size limits in the statute to qualify for net metering.

"The system size limitation of 110% of a customer-generator's prior year electric consumption is being proposed to prevent the installation of oversized alternative energy systems that are more accurately described as merchant generation posing as customer-generators," Powelson said.

"I do not believe it was the intent of the AEPS Act to provide retail rate subsidies to merchant generation facilities at retail customer expense that may result in cross-class subsidization," Powelson added.