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RCA starts net metering discussions After rejecting federal standards, regulators set out to craft state-specific rule for connecting renewable systems to larger grid Eric Lidji Petroleum News
State regulators have started crafting Alaska-specific standards that would let small renewable electric generation facilities hook into major utility systems.
The Regulatory Commission of Alaska opened the dockets on Oct. 22 following an August decision to reject federal net metering and interconnection standards.
Net metering is used nationally to promote small-scale renewable and alternative energy projects, like wind and solar, by paying individual customers for excess power they feed into the large utility grid. Alaska is one of only eight states without net metering laws.
Interconnection rules govern how utilities integrate these facilities with the large system.
Through the new dockets, the commission created two “straw man” proposals, one for net metering and one for interconnection, to serve as a starting point for discussions.
Two “Straw man” proposals The net-metering proposal would limit generation to 25-kilowatt systems from a range of renewable sources, as well as landfill gas. The combined output of all net-metered facilities would be restricted to 1 percent of peak demand for a given utilities.
Customers would get first-dibs on the power they create, and utilities would buy excess electricity at the avoided cost of power, a calculation of the amount a utility saves from buying, rather than making, power. Utilities would check meters monthly, rather than yearly, to more accurately account for seasonal fluctuations in temperature.
Net-metered customers would not be allowed to “double-dip,” by also participating in a utility-sponsored program like Sustainable Natural Alternative Power, or SNAP, which funds small-scale alternative power projects through voluntary donations from customers.
The interconnection proposal would use Institute of Electrical and Electronics Engineers standards as a starting point to crafting more Alaska-specific guidelines.
The commission previously rejected those standards, saying they “may not be applicable to Alaska given the isolation of our grid and the smaller size of our electrical utilities.”
The new regulations would apply to all systems covered by the net metering proposal.
The commission plans to hold “technical conferences” on each proposal to get comments on the standards. The commission is required to rule on the dockets within two years.
Debate over federal standards The Environmental Policy Act of 2005 created new guidelines for net metering and four other standards related to energy creation. While the federal law did not force individual states to adopt the measures, it did require state regulators to consider the proposals.
State regulators decided not to adopt those federal measures after two years of discussions, workshops and public hearings that occasionally pitted Alaska utilities against local advocacy groups and individual customers.
Proponents of net metering believe it would plant the seeds for a renewable energy industry in Alaska by encouraging customers to build, install and maintain a diverse portfolio of generation facilities, eventually decreasing the need for fossil fuels.
But many utilities believe federal net metering standards would violate “cost causer-cost payer” principles, the idea that customers pay only for services they use.
A central component of net metering regulations concerns how utilities compensate small generators for excess electricity. The federal standards required utilities to buy power at the same retail rates they charge. Local utilities challenged that rule, saying rates include fees to recover costs not incurred by net-metered customers, like the long-term expense of building new transmission lines, or system-wide maintenance.
The decision to build Alaska-specific standards around the avoided cost of power is an attempt to find a compromise between advocates and opponents.
Alaska electric utilities differ considerably from those across the Lower 48. To serve a small population spread across a large area, almost every electric utility in Alaska is an integrated cooperative or municipally owned monopoly covering a specific region with utility-owned generation, transmission and distribution facilities.
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