Maryland PSC issues proposed rules for net metering

In late February the Maryland Public Service Commission issued proposed rules regarding net metering.  The proposed rule contains two main departures from the current rules, one of which is a step forward, the other a step back for net metering.

Following a mandate from Senate Bill 355 in 2010, the proposal specifies that electric utility must convert monthly net excess generation from kilowatt hours to generation credits by multiplying the metered excess generation by the hourly locational marginal price (LMP) as established by PJM. Generation credits would then appear on the customer’s bill in a dollar amount. However, when net energy metering is provided by a municipal or cooperative electric company whose avoided cost of generation is a contracted energy rate, the municipal or cooperative must convert excess generation from kilowatt hours to generation credits by multiplying the metered excess generation by the contract rate.  This is a departure from traditional net metering in that linking NEG to the hourly LMP would most likely devalue the customer’s net excess generation, especially in the case of wind energy.

On a positive note, however, the proposed rules also allow for both physical and virtual net metering for non-profits, agricultural and government customers. Those wishing to aggregate meters must provide written allocation instructions detailing how to distribute its excess generation credits to each account.  If a customer’s accounts are not located close enough to physically interconnect, the electric utility must sum the usage and excess generation of all applicable accounts on a kilowatt-hour basis over each billing period prior to calculating the customer’s excess generation for that billing period (e.g. virtual net metering).

It is unclear at this time whether this proposal will be adopted since the way the law was written arguably contradicted legislative intent. 

Refer to a previous IREC post for background on this issue.

Laurel Passera

Laurel is a Senior Renewables Analyst for IREC attorneys Keyes, Fox & Wiedman, and engages in research and analysis of net metering and interconnection regulatory trends to support IREC’s outreach and communication efforts. In 2009, Laurel was a Southeast Regional Network fellow for the Southeast Environmental Leadership Program and currently sits on Raleigh City Council’s Environmental Advisory Board.