Massachusetts DPU Issues Proposed Net Metering Rules, Defining Neighborhood Net Metering

MASSACHUSETTS – On March 6 the Massachusetts Department of Public Utilities (DPU) issued an order to initiate a rulemaking proceeding for net metering, in compliance with the Green Communities Act of 2008 (SB 2768). In accordance with the new law, the DPU has issued proposed rules for net metering and revised rules for Qualifying Facilities/On Site Generating Facilities and Electric Industry Restructuring.

Significantly, the Green Communities Act added a new category of net metering eligibility for neighborhoods. Through the proposed regulations the DPU has defined ‘Neighborhood’ to mean a geographic area within a municipality, that:

• Is recognized by the residents as including a unique community of interests;

• Falls within the service territory of a single distribution company and within a single ISO-NE load zone; and

• May encompass residential, commercial, and undeveloped properties.

The DPU also maintains the right to grant exceptions to this definition on a case-by-case basis. The proposed rules also clarify that neighborhood net metering credits will be calculated based upon the residential rate class applicable to at least one of the residential customers participating in the neighborhood net metering arrangement. The proposal further delineates a neighborhood net metering facility as a Class I, II, or III net metering facility (see background section for definitions of these) that 1) is owned by, or serves the energy needs of, a group of ten or more residential customers that reside in a single neighborhood, and 2) is located within the same neighborhood as the customers that own or are served by the facility.

Under the proposed regulations, net metering credits are carried forward from month to month, indefinitely. A distribution company however, may elect not to allocate Class III net metering credits and may instead buy credits from the host customer (defined as either a single owner or group of owners). Distribution companies may not provide net metering services to a host customer who is an electric company, generation company, aggregator, supplier, energy marketer, or energy broker.

The Green Communities Act changes the price components for calculating credits associated with excess generation for most net metering facilities (Class I and II) and allows those credits to be allocated to other customers of the distribution company.

Distribution companies must collaborate to file a single proposed model net metering tariff with the DPU by March 19, 2009. The stakeholder process will begin with a technical conference on April 2. The DPU will conduct a public hearing on April 27 to receive comments on the proposed regulations. Interested parties must submit written comments to the DPU by April 14 and written reply comments must be filed by May 4. For more information, refer to the DPU’s net metering Docket 08-75.


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