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Pennsylvania Farm Bureau
510 South 31st Street
P0.
Box 8736
Camp Hill, PA 17001-8736
Phone: (717) 761-2740
FAX:
(717) 731-3515 www.pfb.com
HAND DELIVERED
Secretary James J. McNulty, Secretary
Pennsylvania Public Utility Commission
Commonwealth Keystone Building
Harrisburg, PA 17105-3265
Re: Docket No. M-0005 1865
Dear Secretary McNulty:
July 16, 2005
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hnplementation of the Alternative Energy P~fl(folio
Standards Act of 2004, Act 213
Net Metering Standard
On behalf of more than 37,000 members of Pennsylvanias largest general farming
organization, thank you for the opportunity to submit the following comments on the issues
list for the Net Metering! Interconnection Working Group process for implementation of the
Alternative Energy Portfolio Standard. We look forward to continued participation in the
process to ensure the ftiture sustainability of anaerobic digestion on Pennsylvania farms.
If you have any questions regarding our comments, please contact Kristen Goshorn,
Regulatory Reform Director in the Governmental Affairs and Communications Division at
717-761-2740.
Sincerely,
cc: Kristen Goshorn
Carl Shaffer
President r
Pennsylvania Farm Bureau
Issues List for Net Metering
1. Physical Meter Technology
Net metering is defined in Act 213 as The means of measuring the difference between
electricity supplied by an electric utility and the electricity generated by a customer-
generator when the renewable energy generating system is intended primarily to offset
part or all of the customer generators requirements for electricity.
The definition
suggests that a single bi-directional meter is adequate to calculate the difference between
demand and usage and generation.
It is Farm Bureaus understanding that the PUC seeks to adopt standards that are
consistent with other states in the PJM region whenever possible. New Jersey regulations
establish that a bi-directional meter is acceptable for net metering.
We believe this
should also be the base standard in Pennsylvania. If the electric distribution company
(EDC) requires a second meter for any reason, including to purchase renewable energy
credits from the customer generator, the EDC should obtain consent from the customer
for installation and pay for the second meter. If the customer-generator wants a second
meter installed, the cost for the meter should become the responsibility of the customer-
generator.
2. Treatment of transmission, distribution and ancillary services in a customer-
generator net metering environment.
Other states that have adopted net metering generally do not allow any new or additional
charges beyond those for other customers in the same rate class. In the PJM jurisdiction,
this is true in New Jersey. In Pennsylvania, no charge for transmission and distribution
should be passed on to a customer-generator above and beyond what is normally pass on
to other customers in the same rate class.
To avoid reducing the value of energy
generated on the farm and offering a disincentive to these projects, such charges should
be calculated based on the net energy usage of the customer-generator during the billing
cycle.
3. Collection of Stranded Cost obligations from customer-generators
Allowing the competitive transition charge and intangible transition charge (CTC and
ITC) to be rated on the previous usage by the farm before a digester or other system is in
place have greatly reduced the value of on-farm generation.
Administrative fees,
including standby or capacity charges, are also negatively impacting the cost-
effectiveness of farm waste systems. Continuation of these policies will be a death knell
for on-farm anaerobic digesters in Pennsylvania and will deal a harsh blow to
Pennsylvanias renewable energy program. Given that the CTC and ITC are non-bypassable, however, an obligation still exists to
ensure that EDCs are able to recover stranded costs. In reply comments offered following
the AEPS Technical Hearing in January, the Office of the Small Business Advocate
suggested exploring the Sustainable Energy Fund (SEF) as a means to make methane
digesters more cost-effective by using part of the finds surplus to offset administrative
fees from EDCs. It seems this method would also have potential to help recover stranded
costs for utilities through direct payments from the SEF to the EDCs to cover the
stranded costs that the EDC had planned to collect from the customer-generator through
the cost-recovery period. The customer-generator should not be charged the CTC or ITC
beyond what is applicable to the actual net usage of electricity.
4.
Billing/Collection/Payment for net metered customer-generators.
For purposes of billing for on-farm systems, the total usage on all meters associated with
the farm system should be calculated. The energy generated on the farm must offset
electricity used on all meters associated with the farm at the full retail value of the
electricity used. If the customer-generator is a net consumer during the billing period, it
should be billed at the normal rate for other customers in the rate class. Consistent with
the discussion above, this billing would also including the CTC, ITC and other charges
for the net amount of kwh used.
If the customer-generators is a net excess producer, the kilowatt-hour credit should be
rolled over to the next months bill.
If at the end of the annual true-up period the
customer-generator is a net excess generator for the year, the EDC may purchase the
remaining kilowatt hour credit from the customer-generator at a rate equal to the EDCs
avoided cost be compensated for surplus energy at the end of an annual true-up period.
5. Net Metering Applications in Farming Situations
Net Metering rules adopted by the PUC should provide owners of farm methane digesters
the opportunity to offset usage on all meters associated with the farm with electricity that
is produced by the customer-generators methane digester. This is often called ganged
net metering and should be more clearly defined to include all meters on contiguous and
adjacent properties owned or operated by the farmer (including family partnerships) who
owns or operates the on-farm generation system. The energy generated by anaerobic
digesters should be allowed to offset the usage on all meters associated with the farm in
order to maximize the value and cost-effectiveness of the digester to the farm.