June 4, 2020

Edison Electric Institute Declines to Support Petition Seeking Federal Overturn of Solar Net Metering

Edison Electric Institute Declines to Support Petition Seeking Federal Overturn of Solar Net Metering

The Edison Electric Institute (EEI) has battled against state solar net-metering policies for years. But on Thursday the primary industry group for U.S. investor-owned utilities confirmed that it is staying neutral on a controversial petition asking federal regulators to declare net-metering illegal.

On June 15, the Federal Energy Regulatory Commission (FERC) will close comments on a petition filed by New Hampshire-based New England Ratepayers Association (NERA) asking FERC to adopt a legal argument that would undermine net-metering programs in more than 41 states. 

EEI, whose members include Duke Energy, Dominion and American Electric Power, will “not be filing substantive comments at this time,” executive director for regulatory affairs Adam Benshoff said in an emailed statement.

NERA is asking FERC to declare net-metered solar under its “exclusive federal jurisdiction” and to reduce the retail rates they’re paid to significantly lower wholesale rates. The petition has been condemned by environmental advocates, solar industry groups, state utility regulators and Democrats in Congress as a legally unsound and economically destructive attack against states’ authority over their own energy policies.

If FERC approves the petition, it “could create chaos at the state level,” Ari Peskoe, director of the Electricity Law Initiative at Harvard University, said in a Thursday interview. An approval could open state programs to challenges by utilities in regulatory proceedings and independent lawsuits in federal court, Peskoe said. 

EEI’s notable position of neutrality

Lawmakers and utility watchdog groups have accused NERA of serving an agenda of utilities and industries opposed to clean energy rather than the ratepayers it claims to represent. NERA, which as a tax-exempt 501(c)(4) organization isn’t required disclose its financial backers, argues that net metering overcompensates solar owners at the expense of other electricity customers. 

EEI and some of its member utilities have made similar arguments against state net metering programs over the years. In many states, utilities have succeeded in reducing compensation from full retail rates, instituting fixed charges or demand charges, and otherwise shifting costs onto solar customers.

EEI has not come out in support of net-metering. Benshoff’s statement notes that the group has “long taken issue with retail net energy metering as both a regressive and poor public policy tool that unfairly shifts electricity costs on to the most vulnerable customers.” 

However, in the midst of the coronavirus pandemic, the group and its members “are focused on continuing to provide safe, reliable, and affordable service,” and on “policies that will help drive our nation’s economic recovery after this crisis.”

EEI has filed a motion to intervene in the case, as have many utilities and trade groups that have not yet filed comments supporting or opposing NERA’s petition. It did so “to reserve our rights to participate when the Commission rules on the legal issues at question in the petition,” Benshoff wrote. 

EEI’s neutral stance is nevertheless notable, given the group’s longstanding efforts to stop or roll back state net metering programs. In 2013, the trade group wrote a memo stating that distributed solar could “directly threaten the centralized utility model.”

In 2014 it worked with the American Legislative Exchange Council (ALEC) to draft model language for state legislators to promote additional charges and reduced payments for net-metered solar on the grounds of more fairly distributing costs among ratepayers. 

In 2014, ALEC articulated a legal argument similar to that now being put forward by NERA, according to Thad Culley, senior regional director for the Vote Solar advocacy group. But it wasn’t taken up by utilities or other net metering opponents, which instead concentrated on changing regulations in solar-heavy states such as  CaliforniaHawaiiArizona and Nevada, as well as those with far fewer net-metered customers, he said. 

“It is interesting that they opposed net metering all this time, but they never played this card that NERA is playing,” Culley said. 

No public support for NERA’s anti-solar petition

As of Thursday, no comments supporting NERA’s petition had been filed in FERC’s proceeding. But the docket is filled with comments opposing its legal argument that net-metered systems should be subject to federal jurisdiction under the Public Utility Regulatory Policies Act (PURPA). 

Nine members of Congress, including former Democratic presidential candidate Sen. Elizabeth Warren (D-Mass.) filed a letter last month stating that PURPA’s language “makes clear that Congress intended for net-metering programs to fall under state jurisdiction, not FERC’s.” Granting NERA’s petition “would overturn long-held precedent and give the federal government decision-making power that has long belonged to the states, including the authority to set rates, terms, and conditions for programs.”

The letter highlighted reports from watchdog group Public Citizen indicating that NERA has only 12 funding members, indicating that it “operates more like a trade association, representing the interests of a select number of industry or utility players, rather than a grassroots ratepayer group.” 

New Hampshire Rep. Kat McGhee echoed those concerns in a FERC filing, saying that NERA President Marc Brown’s “lobbying efforts align more with the fossil fuel industry’s interests” than with those of the state’s ratepayers. She also noted that NERA “leases pricey office space in multiple cities, retains high priced DC counsel and has a spin off organization called the Ratepayers Legal Defense Fund” whose officers include two brothers of New Hampshire Governor Chris Sununu.”

The National Association of Regualtory Utility Commissioners (NARUC) has not yet filed comments in the FERC proceeding, but Mississippi Commissioner and NARUC President Brandon Presley objected to FERC’s June 15 deadline in a May 5 statement, saying it would “divert precious time, attention and resources to fighting NERA’s request in a tightly compressed schedule.” 

FERC declined NARUC’s request to extend the comment deadline, but it has no hard deadline to make a decision on NERA’s petition, Harvard’s Peskoe said. “We’ll just be waiting to see what happens.” 

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