Nov. 17, 2006
Will federal law help net-metering goals?
Washington Times
States have the power to dramatically change the way power is produced in the United States, a report released Thursday said. The report, "Freeing the Grid," by the Network for New Energy Choices says net-metering policies can free the electricity grid for small businesses, by allowing them to generate their own renewable energy and sell the excess back to the central transmission grid.
According to the American Wind Association Web site, net-metering is a way to meter the energy consumed and produced at a home or business that has its own renewable energy generator. Excess electricity produced will then spin the electricity meter backward, banking the electricity until it is needed by the customer.
The NNEC report urged that the idea be considered by states without net-metering programs, adding that those states with such programs should re-evaluate what they have. The report suggests net-metering may be one viable solution to current financial, security and environmental energy problems and may also be a way to assist in meeting the 25x'25, which was determined to be a realistic expectation by a recent RAND study.
"Net-metering reduces demand on the central grid which reduces the overall demand making that 25 percent of renewables a lot easier to obtain," Chris Cooper, executive director of the NNEC, said Thursday.
The 25x'25 plan supports producing 25 percent of America's electricity and vehicle fuel from renewable resources by 2025. The RAND study, released this week at a news conference in Washington, found the goal is achievable under current conditions and would not significantly alter the nation's energy expenditure. Even if the predictions are accurate, the economic impact of 25x'25 is still debatable.
If renewable technology prices continue to fall as the National Renewable Energy Laboratory suggests and the oil prices continue to rise as the Energy Information Administration predicts, RAND finds in some simulations that energy bills are lowered.
Net-metering programs complement and encourage renewable energy production and state Renewable Portfolio Standards. In New Jersey, and other states, the programs have been successful. The NNEC rated the programs and used these states to form a model. Only about half of the 34 programs were graded satisfactory or above, though it's important to note the Department of Energy data used in the grading was from 2004.
States with ineffective programs -- Indiana, Arkansas and states with no net-metering -- are encouraged by the NNEC to adopt their new design.
"New Jersey's set an ambitious renewable portfolio standard goal of 22.5 percent renewables by 2021 and are using net-metering to get there," Cooper said.
Net-metering programs should also reserve excess energy, avoid unreasonable restrictions, provide incentives, regularly measure performance and balance the interests of utility companies and participants.
Programs gives consumers market-based incentives and set rules for customers who generate their own electricity and interconnect to the central grid, said Michael Dworkin, professor of law and director of the Institute for Energy and the Environment at Vermont Law School, who was present at Thursday's news conference. He suggested transitioning to smart meters, time of use pricing and smart tariffs might improve the programs as well as more centralized regulating.
Some utility companies don't like the idea of private production of energy and see netmetering as a threat to revenue. Dworkin said he believes utilities also have a sense of responsibility that they are hesitant to let go of.
The cost is also a concern. The NNEC and its supporters suggest that with or without net-metering there will be a cost, either to upgrade overloaded grids or develop individual power generation, that everyone will have to pay for at some point.
"Energy is going to cost something no matter what," emphasized Rep. James Covey, DOkla.
Another issue is the lack of consistency among programs. States have ultimately taken the responsibility on themselves. If the federal government set standards, then there could be a "level playing field," he said.
Given the recent shift in congressional power and, for the first time, some consensus between parties that the United States is nearing an energy crisis, some of the stalled legislation may be passed.
A resolution creating 25x'25 as a national goal was introduced to congress in June and gained the support of 90 House representatives and 28 senators said Read Smith, cochair of 25x'25.
"Hopefully with the next Congress, we'll see that go through," Smith said.
Those faithful in national standards are hoping for the support of the new congress. The NNEC suggests states should act on their own.
"The original version of the 2005 energy bill included a national renewable portfolio standard, we believe national standards make a whole lot of sense especially when utilities have interstate holdings and (The new congress) might bring it up but there's no time to wait," Cooper said.
By giving the responsibility to the states, there is competition to get ahead of each other both in net-metering and renewable portfolio standards, he said, and to get a head start on meeting what may possibly become national renewable standards.
