Georgetown says net metering rules ‘discriminate’ against customer base

Consultants of the Commonwealth Public Utilities Commission say technical defects in the current net metering regulations discriminate in a way that shifts costs to less wealthy customers.

Georgetown Consulting Group, in their first review of these regulations since they were established in 2012, said these flaws discriminate by allowing affluent customers a chance to reduce their electric bills to zero at the expense of poorer customers.

The consultants took aim at the regulation that requires the Commonwealth Utilities Corp. to offer net metering to customers with a renewable available generating capacity of no more than 10 megawatts.

The consultants find these levels “unreasonable.”

At this level, the capacity allowed is equal to “3,000 times” the capacity level needed for an average CNMI residential customer and “500 times” the capacity for a commercial consumer to provide for all their energy needs.

“These levels are simply unreasonable and represent a significant technical flaw in the current net metering statute,” the consultants wrote.

This limits the penetration of the net metering within the residential and commercial classes.

Since the program is offered on a first-come, first-serve basis, the total number of consumers that can become eligible before CUC’s capability to accept renewable energy is reached is “reduced” because of the large capacity limit for a single consumer, they said.

This “discriminates by providing more affluent customers the opportunity to reduce their electricity bills to zero and enrich themselves by selling their excess at the expense of less affluent residential customers who will be responsible for paying the standby and back up capacity and infrastructure operating and maintenance expenses of net-metered customers.”

“Residential customers with large renewable systems pay CUC nothing for service and will receive payment for their excess production,” the consultants said.

Because of this, the costs that CUC incurs to provide backup and standby capacity to these customers and the costs incurred to provide delivery to these customers to sell their excess energy is allocated to all other customers.

Compared to the U.S. mainland, the consultants said their capacity limits lean toward 10 kilowatts for residential consumers and 25 kilowatts for commercial.

The consultants said if these similar capacity limitations were in place, it would allow for a greater number of net metered consumers to be added to the system and would reduce the subsidy impacts of excess capacity.

The consultants also called “extraordinarily large” the current net-metered capacity level, which is 30 percent of CUC’s peak demand.

They said the potential 30 percent of capacity that would be exempted from fixed and operating and maintenance costs would total 12 cents per kilowatt-hour.

“If a full capacity existed CUC would have to spread this economic burden to its remaining consumers,” resulting in about $0.02 kilowatt-hours to all non-net-metered customers.

“We would recommend heading this matter off before it becomes more difficult to resolve,” the consultants wrote.

The consultants recommended that the 10-megawatt capacity limitation and the 30 percent total net metering penetration level could not be recommended as acceptable.

They recommended that before any action is taken, a study on the net-metering program be undertaken.

This would include the current levels of subsidies being received by net energy metered customers, the impact of this on all other customers in terms of their monthly bill, an estimated impact of this over 10 years, and a survey of current net metering best practices being implemented by other jurisdictions, including sunset provisions, treatment of excess credits, and capacity levels.