Louisiana PSC considers staff report on net metering

Earlier in March of this year, the Louisiana Public Service Commission (PSC) sought comments on issues such as the costs associated with net metering, any cross-subsidization that may occur and whether third-party ownership should be allowed for net metering customers.  This ongoing issue is catalogued under Docket No. R-31417 on the LA PSC website.

On November 30, the Louisiana PSC Staff issued a Report and Recommendations regarding the redesign of net metering and virtual net metering. From the Report:

Regarding Purchased Power Subsidies, (a.k.a net excess generation) the Staff believes that it is an unintended and wholly inappropriate to require electric utilities to purchase wholesale power from net metering customers at the utility’s retail tariff rate. The Staff therefore recommends that the Commission modify its existing rule to require electric utilities to compensate the net metering customer at the utility’s average avoided cost rate for the immediate preceding month for any excess generated power sold to the utility.  However, Staff recommends that power purchased by the net metering customer from the utility should continue to be made at the utility’s retail tariff rate.

Regarding Installation Subsidies, the Staff recommends that the Commission require each utility to calculate its fully allocated cost of meter change outs to the net metering customer and implement this cost in their current tariff. The Staff further recommends that this meter installation charge be updated and revised in each utility rate case or formula rate plan.

Regarding Aggregation, the Staff believes that it is both fair and reasonable for the customer with multiple accounts to be able to net their excess generation on the net meter account with their consumption on other accounts. However, the Staff does recognize that Aggregation could complicate billing for those net-metering customers with a combination of residential and commercial accounts. The Staff therefore believes that the most simple and equitable remedy for Aggregation is to require the utility to annually “cash out” and refund any excess generation to the customer.

Regarding Third Party Ownership, the Staff believes that third party ownership of net metering equipment can be beneficial since it transfers the ownership risk and upfront cash payment for equipment. However, Staff also believes that these third party ownership arrangements must be for a fixed price and for a fixed term that are not dependent upon the lessee’s electric consumption. Otherwise, the lessor could be placed in a position where it becomes an unregulated retail seller of electricity. Towards this end, the Staff believes the Commission’s current rules should be clarified to prohibit the installation of net metering service from the utility to anyone except the end user of electricity.

The Report and Recommendation has been placed on the Commission’s December 12, 2012 Business and Executive Session Agenda for consideration.


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