Thoughts on Net Metering — Part 1

I won’t be requesting full net metering. Solar without storage isn’t dispatchable. The utility can’t rely on aggregate solar exports at a specific time. The utility (and ISO) can make smart predictions with good data, but they can’t rely on what they don’t control. Exported distributed solar might be more valuable than utility-controlled energy resources when considering externalities (environmental, grid security, etc), but that shouldn’t be used to justify retail credit. Retail credit for a specific rate structure is an arbitrary number in the externalities context.

I’d like to see retail credit continue for the portion of distributed solar that serves on-site load. I think it’s right to treat this local usage offset in the same way we treat conversation and efficiency. A consumer should be permitted to reduce the quantity of a good she consumes by whatever safe and legal means are available to her. That begs the question — should electric service be pay-per-use or fixed subscription? While it’s historically been mostly pay-per-use, many utilities are now pushing for the latter. In other words, they want to shift ratepayer cost to non-offsettable fixed charges. The correct split between variable cost and fixed cost is complicated to say the least. For example, who should pay for a utility infrastructure investment made in the 2000s that could have been avoided had the utility anticipated the transition towards distributed energy and power electronics?

To be continued next week.

Michael Bishop, 8/12/16