Massachusetts DPU adopts model net metering and interconnection tariffs

MASSACHUSETTS – On August 20, the Massachusetts Department of Public Utilities adopted the slightly modified model net metering tariff and model interconnection tariff. The model tariffs provide clarity, guidance and uniformity to utilities, their customers, renewable energy developers, and other stakeholders regarding the process for receiving net metering services. The DPU reviewed the tariffs to determine that they are consistent with applicable law, DPU precedent, and the public interest.

There were a few departures from the tariffs proposed by the utilities that were altered in this model tariff:

1. In the net metering tariffs proposed by the utilities, host customers (those hosting a neighborhood net metering facility), rather than the utility, were responsible for allocating net metering credits. In opposing an allocation requirement, the utilities stated that it would be administratively burdensome and costly. The DPU alternately determined that the Green Communities Act requires utilities to allocate net metering credits to eligible customers, as designated by a host customer. The DPU also determined that the only exception to allocation is for class III net metering facilities, in which case the utility may choose to purchase the net metering credits rather than allocating them.

The adopted model net metering tariff contains no restrictions on the number of allocations of net metering credits a host customer may designate. The model net metering tariff also contains no mechanism by which utilities may recover costs associated with the allocation of net metering credits. The DPU did however, ask the utilities to track incremental costs associated with credit allocation and report back in one year to determine if a cost recovery plan should be implemented.

2. In considering how to measure total generation, stakeholders discussed the advantages and disadvantages of metering or estimating generation, reporting requirements, costs associated with reading and installing generation meters and who should bear them, and the impact of decoupling. Ultimately, there was consensus among a broadly represented group of stakeholders that class II and III net metering facilities should install revenue-grade meters at the host customer’s expense. In addition, there was consensus that inverter data should be used to derive the revenues displaced by class I net metering facilities and, if such information was not available, that the generation should be estimated using the best available data.

3. In addition to distribution revenue lost as a result of net metering, the Green Communities Act allows utilities to recover the net metering excess generation credits they are required to purchase. To calculate and recover these costs, the utilities proposed in their model net metering tariff a formula entitled the Net Metering Recovery Surcharge (NMRS). The NMRS as proposed by the utilities was based on a prospective approach, relying upon forecasts for the upcoming year of the net metering credits to be paid and the non-reconciling distribution portion of revenue to be displaced by net metering facilities. The adopted model net metering tariff includes a NMRS that is alternatively retrospective in nature. This approach was found to be consistent with other annual reconciliations and will better allow for the use of actual data. In addition, the adopted NMRS requires the reconciliation of both the reconciling and non-reconciling components of net metering credits. This should allow for greater transparency of the costs associated with net metering because they will all be included in the annual NMRS reconciliation rather than being split between the NMRS and the utility’s other annual reconciliation of costs.

4. The utilities proposed a model net metering tariff requiring all Class II and Class III Net-Metering Facilities to participate in the REC market in order to provide resources for utilities to meet existing and future Renewable Portfolio Standard (RPS) requirements. The adopted model net metering tariff does not, however, require host customers to participate in the REC market and does not otherwise restrict their disposal of RECs or other renewable or environmental attributes associated with the generation of their net metering facilities.

In addition to the net metering modification, the model interconnection tariff was also updated. Definitions and Schedule Z were added, the metering requirements revised, and certain citations relating to insurance were updated. The most notable modification is that the model interconnection tariff now contains Schedule Z, a questionnaire for the customer-generator that provides utilities with further information for the interconnection process. Schedule Z provides a mechanism by which neighborhood net metering arrangements can notify the utility of the participating customers, the percentage of credits to be applied to each account and how they should be applied.

For more information please refer to docket 08-75 on the DPU website.

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