Solar Companies And Utilities Propose NEM Compromise In N.Y.

Posted by Joseph Bebon on April 20, 2016 No Comments
Categories : Policy Watch

With all the public debates between the two parties, it might seem like utilities and solar companies don’t often get along, especially when it comes to net energy metering (NEM). In New York, though, six electric utilities and three national solar providers have just announced a joint proposal on NEM issues after forming a coalition they call the Solar Progress Partnership.

The utility members include Central Hudson Gas & Electric Corp., Consolidated Edison Co. of New York Inc., New York State Electric & Gas Corp., Niagara Mohawk Power Corp. d/b/a National Grid, Orange and Rockland Utilities Inc., and Rochester Gas and Electric. Meanwhile, the three participating solar companies are SolarCity Inc., SunEdison Inc. and SunPower Corp.

In a filing with the New York State Public Service Commission, the coalition has proposed a transition from the current compensation model for solar NEM to one that the companies say continues to support the development of clean solar power in New York while addressing customer cost-sharing issues that have evolved with the rise of solar projects.

As the partners explain, NEM allows solar users to receive credit for excess power back to the grid at retail rates, helping them produce clean power and lower their utility bills. For those without adequate rooftops, solar power has also become available through so-called “community solar” or “remote net metering” arrangements, where solar power is purchased from solar developers or building owners that construct solar installations on available parcels of land or warehouse rooftops.

With all of these scenarios, the partners continue, electric grids are being used to transmit the solar power from the installations to the grid and back to their customers, with the revenue requirement for maintaining the grid being shifted more and more to non-solar customers.

The Solar Progress Partnership’s filing recommends essentially maintaining the current NEM formula for rooftop solar until Jan. 1, 2020, with options for a transition to a new formula that the coalition says more accurately compensates customers for the value of the electricity they send to the grid.

In addition, the filing proposes collecting a payment from solar developers for community and remote solar projects connected to the grid while preserving utility bill savings for their customers. The coalition says solar developers would gain greater certainty over their ability to connect customers to their projects, and electric utilities would have the financial resources needed to maintain a reliable grid as solar continues to grow.

John McAvoy, chairman and CEO of Con Edison Inc.  (parent company of Con Edison Co. of New York and Orange & Rockland Utilities), says, “We’re working together to keep our state’s solar market vibrant while enabling us to maintain the robust power grid that solar energy requires and in a way that is fair to all customers. Utilities and solar companies have found common ground to enhance our environment, the economy and electric reliability.”

“We are in the midst of one of the greatest energy transformations in history,” adds Tom Werner, president and CEO of SunPower. “This joint proposal for the people of New York is another strong example of how we can work collaboratively with utilities to ensure every household, business and community have access to the cleanest possible forms of energy.”

The partnership says the proposal was a result of dialogue facilitated by the Advanced Energy Economy Institute on the future of solar development in New York.

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