September 20, 2015

Advocates Back Bill to Prevent Limits on Reimbursements for Alternative Energy in Pennsylvania

Advocates of turning cow manure and other waste into energy are backing a bill introduced in the Pennsylvania House that would forbid putting caps on how much electricity those systems can sell to the grid.

The bill is aimed at a proposal still being developed by the Pennsylvania Public Utility Commission meant to limit reimbursements to customers who generate power from alternative sources — a dairy farmer with a methane digester, for example, or a homeowner with solar panels on the roof.

Such customers would only be eligible for reimbursements if they have systems designed to produce no more than 200 percent of the electricity they normally use at their farm or home in a year.

Under state law, utility customers who generate more power from renewable sources than they can use are paid for their annual excess electricity by the utility. The practice is called net metering. 

The law sets limits on the size of the systems that qualify for payment: Residential generators have a capacity cap of 50 kilowatts and commercial generators are capped at 3 or 5 megawatts.

Currently, about 8,700 facilities in the state are net metered, nearly double the 4,500 that were net metered in 2011, according to the PUC. Those facilities have a combined capacity of just over 200 megawatts, and the vast majority — over 94 percent — are solar.

The PUC’s proposal to further restrict the size of systems that qualify for net-metering reimbursements has caused a stir among farmers and groups who want to limit pollution from livestock waste reaching streams and bays.

Farmers that turn manure into energy with methane digesters can reap an economic benefit from managing an environmental problem, but advocates say farmers can only afford those systems if they can count on income from net metering.

Digesters capture the methane produced by bacteria feeding on waste in a warm, oxygen-deprived environment like a covered tank in a process that pretty much picks up where the cow left off. The methane then is used to generate power.

House Bill 1349, introduced by Rep. David Zimmerman, a Republican from Lancaster County, would apply to more than farms.

It would forbid the PUC from limiting the amount of energy produced from all forms of biologically derived methane — an inoffensive term for gas that comes from the breakdown of generally nasty things, like manure, garbage and sewage sludge.

At a hearing last week on the bill, Mr. Zimmerman called the PUC’s proposal “wrongheaded” and said it has already caused a Lancaster County borough to pause its plans to replace an aging sewage treatment plant with a digester.

“It makes no sense that the PUC would try to undermine (the law) like this,” he said.

The PUC says the rule is necessary because undefined terms in the law have left electric utilities unsure of how to handle some applications for net metering, which has led to inconsistent treatment of customer-generators. And since the costs of net-metering payments are passed on to other utility customers as a tiny fraction of their monthly bills, the proposed limits are needed to keep electric rates for everyone else “just and reasonable.”

PUC Chairman Gladys Brown testified last week that ambiguous wording in HB 1349 could be interpreted to lift even the current law’s cap on the capacity of waste-to-energy systems that qualify for net metering, which could cost an additional $87 million a year in subsidies just for current and planned landfill gas-to-energy projects.

Other parties at the hearing pushed for a broader bill that would bar limits on electricity generated from solar panels, farm-based wind turbines and poultry litter.

Technologies other than those described in the bill are “critically important” for turning lighter-weight manure into energy, Chesapeake Bay Commission Executive Director Ann Swanson said.

“Think chicken,” she said. “Think turkey.”

Utilities, represented by the Energy Association of Pennsylvania, are seeking a different kind of change to the law. They want to reimburse customer-generators for their excess electricity at the wholesale electricity rate, not the higher, retail rate that they currently pay.

They also want the ability to charge fees to recover the costs of maintaining an electric grid that can reliably accommodate alternative energy systems.

Rep. Robert Godshall, a Montgomery County Republican and chairman of the House Consumer Affairs Committee, which hosted the hearing, asked multiple panelists whether they thought excess energy should be reimbursed at the wholesale or retail electric rate, in a sign, perhaps, of other amendments being considered by the committee.

“Should the owner of one of these digesters… should he pay his share of getting that electricity to the homeowner?” he asked. “That’s the major question that we’re dealing with.”

The consumer affairs committee has not scheduled a vote on the bill. Meanwhile, the PUC is still reviewing its proposed rule after it held a second round of public comment this spring. Ms. Brown said a final proposal will be introduced for a vote at an upcoming commission meeting, hopefully this fall.

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