New England Ratepayers Association’s net metering petition dismissed

The Federal Energy Regulatory Commission (FERC) on July 16 unanimously dismissed a net metering petition from the New England Ratepayers Association (NERA) requesting that FERC have sole jurisdiction over behind-the-meter solar generation, in turn giving more authority to the commission while taking it away from the states.

But does this mean the end of NERA’s quest?

Some commissioners pointed to lingering legal issues behind NERA’s petition that were not addressed in FERC’s order around net metering, which is a billing mechanism that credits solar energy system owners for the electricity they add to the grid.

“Though I support the commission’s order dismissing, on procedural grounds, New England Ratepayers Association’s Petition for Declaratory Order concerning net metering, I write separately to make clear that today’s order does not address any of the important, substantive issues underlying [NERA’s] petition,” said Commissioner Bernard McNamee.

During yesterday’s virtual FERC public meeting, McNamee pointed out that the commission’s order is not a decision on whether FERC lacks jurisdiction over the energy sales made through net metering; nor is it a decision on the merits of the issues raised by and contained in NERA’s petition.

“I also note, that as a general proposition, I think it is best to decide important legal and jurisdictional questions, like the ones raised in the petition, when applying the law to a specific set of facts, such as in a Section 206 complaint, or through a rulemaking proceeding,” he said.

NERA in its petition argued that there is exclusive federal jurisdiction over energy sales from generation sources located on the customer side of the retail meter, and that the rates for such sales should be priced in accordance with federal law.

At FERC, Commissioner James Danly yesterday raised a similar point about the commission’s dismissal of the NERA petition for declaratory order.

“I of course am voting for the dismissal and I agree that the commission has discretion to dismiss the petition on procedural grounds,” he said during the meeting, nonetheless expressing “concern about possible consequences of this dismissal.”

“One of which, which I believe is quite profound, is that if the cases end up being presented in serial litigation before the federal district courts, which would presumably consider the cases under principal preemption, that could create an inconsistent state-by-state regime of conflicting rules that would take years to clean up,” Danly said. “I think ultimately the proper forum for considering the issues that were presented in the position, untethered to a specific statutory scheme, the proper place for considering the issues is the commission.”

Nevertheless, FERC dismissed the petition because NERA failed to cite any specific harms or controversies that should be addressed by the commission, said FERC Chairman Neil Chatterjee during the Thursday hearing.

“The petition asked the commission to make certain jurisdictional determinations regarding energy sales from rooftop solar facilities and other distributive generation located on the customer side of the retail meter,” Chatterjee said. “Declaratory orders to terminate a controversy or remove uncertainty are discretionary. We exercised that discretion today and find that the issues presented in the petition do not warrant a generic statement from the commission at this time.”

Chatterjee added that in FERC’s order, commissioners also noted that the manner in which FERC addresses a petition for declaratory order depends on the specific facts and circumstances presented to it. “Here, we find that the petition does not identify a specific controversy or harm that the commission should address in a declaratory order,” he said. “While a couple of my colleagues may write separately, I’m pleased we reached a unanimous result in this matter.”

Supporters of the NERA petition also cited the need for FERC’s jurisdictional authority over net metering.

For instance, the Competitive Enterprise Institute (CEI), a public policy organization that advocates for free markets and limited government, in its comments supporting the NERA petition specifically had asked FERC to exercise its jurisdiction over wholesale electricity sales to eliminate unlawful ratepayer subsidies to distributed generation from rooftop solar units.

“NERA correctly argues that the sale of electricity from a homeowner to a utility, which in turn resells the electricity to other customers, is, by definition, a wholesale sale,” according to CEI’s filing. “Thus, such sales are within FERC’s regulatory jurisdiction.”

Similar support came from Tim Andrews, executive director of the Taxpayers Protection Alliance (TPA), a nonpartisan, non-profit taxpayer and consumer advocacy organization, who also said in TPA’s filing that wholesale energy sales fall under the purview of FERC.

The National Association of Regulatory Utility Commissioners (NARUC) was among the many challengers to the NERA petition that commended FERC’s action yesterday.

“This decision is a victory for state regulators and for anyone with a vested interest in net metering policy. said Mississippi Public Service Commissioner and NARUC President Brandon Presley. “We applaud FERC’s decision, as the commission clearly sees that NERA filed a baseless petition without regard for existing state and federal statutes.”