On behalf of 25 Electricity Regulation Scholars, Electricity Law Initiative Director Ari Peskoe and Professor Jim Rossi of Vanderbilt University Law School filed a comment at FERC opposing a petition that seeks to stall the growth of small-scale distributed energy resources. The comment responds to a petition that claims net metering, a widely used method of accounting for energy production from rooftop solar, violates federal law. In 2001, FERC determined that it would not regulate states’ net metering rules that allow utilities to charge ratepayers only for the difference between their monthly consumption and production from rooftop solar. The petition argues that FERC’s policy was always wrong and that energy produced by a ratepayer must be priced pursuant to federal law rather than being valued under state-set net metering rules.
Our filing provides FERC with four reasons to dismiss the petition.
First, FERC should deny the petition because federal law only allows for petitions that seek to “terminate a controversy or remove uncertainty.” There is neither controversy nor uncertainty around FERC’s twenty-year old, consistently applied net metering policy.
Second, FERC should reject the petition’s understanding of two decade-old federal appeals court decisions that are the centerpiece of its legal argument. We point out that FERC has already correctly interpreted these cases in a way that compels FERC to deny the petition.
Third, federal law prohibits FERC from regulating retail sales, and we argue that net metering is simply a method used by utilities to measure retail sales and allocate costs of retail service to retail ratepayers. Because net metering is strictly a retail matter, it is beyond FERC’s jurisdiction.
Fourth, if FERC finds that net metering is not a retail matter, we argue that it’s still beyond FERC’s jurisdiction. Federal law provides FERC with authority only over wholesale sales that are “in interstate commerce.” We provide a comprehensive review of the meaning of this phrase and find the petition provides no evidence that might provide FERC with a basis for finding energy from a net-metered resource is “in interstate commerce.”
We expect that clean energy advocates, state regulators, and numerous other parties will also oppose the petition. FERC does not have any deadline for responding.
Listen to Ari’s remarks at a June 10th press event describing the petition and objections filed in response. For a transcript of this recording see here.