PUC to Adopt Changes to its Alternative Energy Regulation

The Pennsylvania Public Utility Commission voted unanimously today to adopt changes to its alternative energy regulations including controversial new limits on who can qualify for incentive payments for selling their extra alternative energy to the grid.

Contested sections of the regulations exclude some classes of alternative energy generators from net metering, a process that allows electricity customers who generate power from sources like solar panels and landfill gas to get retail rates when they make more electricity than they use.

The final version of the rules includes a new definition of the word “utility” that was revised after an earlier definition drew complaints from the state Independent Regulatory Review Commission, the state Attorney General’s office and others for being so sweeping it could be construed as prohibiting all net metering.

PUC Chairman Gladys Brown said during the meeting Thursday that the definition was revised to address those concerns. “I believe that the revised definition of utility is consistent with the act and is in the public interest,” she said.

The new definition attempts to make it clearer that companies whose primary purpose is to generate alternative energy for sale do not qualify for net metering. The PUC has said that the benefit was only intended for entities like homeowners and businesses that have adopted renewable energy systems primarily to offset their own electricity needs. It says the rules are necessary to keep everyone else’s electricity costs from rising.

In twice rejecting earlier drafts of the regulations, the independent regulatory review board said those cost concerns are speculative and that the PUC had not established a compelling need for the rules.

The regulations are likely to face a swift legal challenge from alternative energy providers, who argue that the size limits established in the state’s alternative energy law do not include the kind of exclusions the PUC is implementing.

A recent Commonwealth Court opinion said that the law “fully established” who qualifies for net metering: alternative energy systems with a capacity of up to 50 kilowatts at residential sites and up to 3 or 5 megawatts at other locations.

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