U.S. government should lead on national policy for renewables

WASHINGTON, DC, US, November 22, 2006 (Refocus Weekly)

A “cleverly-designed national net metering policy” would unify the United States behind the important goal of increasing green power output, by standardizing net metering procedures and overcoming the limitations created by a patchwork of state-based initiatives.

“Our analysis of 34 existing state net metering programs reveals that most utilities are likely to embrace changes in net metering mandates with the enthusiasm of a tax audit,” says the Network for New Energy Choices in ‘Freeing the Grid: How Effective State Net Metering Laws Can Revolutionize U.S. Energy Policy.’ It is the first report to rank and grade the effectiveness of state net metering programs using federal data from the Department of Energy on actual participation rates.

“Because most utilities perceive net metering programs as revenue-losers rather than demand-reduction strategies, they have lobbied at the state level for unnecessary restrictions, burdensome procedures and excessive fees that limit participation,” it explains. “While individual states can and should improve their net metering programs by adopting the model statutes we have recommended, the wide discrepancy in both the design and implementation of individual state net metering programs has created an uneven playing field, both for regulated utilities and for small-scale renewable generating facilities. Ideally, a uniform national renewable energy policy would stem from federal leadership.”

NNEC identifies New Jersey as the best state for net metering, and ranks Arkansas (no customers in the first two years of its program), Indiana (only six customers by 2004) and Oklahoma as the worst. Electric utilities often undermine the intentions of state legislators during the rule-making process and, to appease their companies, many state utility commissions adopt minor rule changes that end up destroying the entire program, the report alleges.

Efforts to protect the economic interests of the power sector within a state end up hurting other industries in that state, such as manufacturing, but model statutes and regulations can help states implement programs that could “radically alter how electricity is generated,” it adds.

“Every homeowner and every small business is a potential source of reliable, renewable electricity for their community,” says Chris Cooper of NNEC. “Smart utilities realize that we will have to tap all of these small sources to meet future demand.”

The federal energy bill approved last year mandates every state to consider adopting or expanding net metering programs by the end of 2007. That legislation “requires states to go back and try to fix the problems with their net metering programs,” says Cooper. “In many states, on-site renewable electricity already can compete successfully with energy from dirty, centralized power plants but, in many states, complex rules are designed to protect electricity monopolies and discourage homeowners and small businesses from generating their own clean energy.”

“When commissions tried to balance the economic interests of regulated utilities with the economic interests of customers, customers almost always lost out,” says Cooper. “In many states, utilities used the phantom of lost revenue to justify higher electricity costs for other state industries. Utilities should not have a divine right to charge for electricity that customers can otherwise generate more efficiently and more cleanly on their own.”

NNEC asked researchers from Vermont Law School to develop model state statutes for legislatures and regulations for utility commissions, both of which are included in the report.

“For the renewable energy services sector, a national net metering scheme would allow market forces to dictate the geography of energy investments,” the report notes. “A national strategy would allow certain technologies to flourish where they are most useful and encourage a greater diversity of electricity generation across states.”

Standardized national net metering rules would also create a uniform curriculum for training technicians and create a more diverse pool of expertise that would reduce the amount of time (and money) individual states spend developing their own curricula and training their own technicians. National standards would expand job opportunities for certified technicians by allowing greater employment mobility while, for utilities, a uniform federal net metering program should prove more attractive than a network of 50 state-based regulatory schemes because it provides a level of “regulatory predictability that should be embraced by the growing number of utilities operating across states that have yet to develop net metering programs” as required by the federal energy act.

“Even for utilities focused exclusively on the bottom line, the devil you know is better than the devil you don’t,” it concludes. “A national program provides a level of regulatory predictability that should be embraced by the growing number of utilities operating across states that are required to develop net metering programs.”

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