Net Metering

Killing Energy Democracy Trump-Style? The Strange Attack on Net Metering in the US

Infiltrate the Federal Energy Regulatory Commission (FERC). Deprive states of their powers with a petition by the shadowy lobby group NERA. Kill net metering policies in 41 US states, the crucial instrument to boost the rise of small-scale solar prosumers. Restitute the ´Old Energy World`. From a distance, the current war on net energy metering (competence) in the US looks like another typical Trump attempt to roll back the achievements of the energy transition.

Disclaimer: NEM is not a silver bullet, yes!

It´s not that easy, sure. All experts agree that net metering is a successful mean to kick-off the uptake of small-scale solar, but it is not the best mean on the long run with already advanced solar uptake. So of course, a discussion on NEM is more than necessary. And in fact, the US states are an inspiring living lab for NEM-successor tariffs and prosumer-regulation respectively. But “FERC-Gate” is not about finding the best NEM successor tariff, I am afraid. It is about take control back of (or stop?) the rise of prosumers.

It´s not about NEM, but it is all about NEM

Officially, “FERC-Gate” is not about the value of NEM. Officially, it is about who is in charge of NEM: is NEM to be classified as a retail market subject as it has been for decades? Then it remains the states´ responsibility. Or does it (suddenly) need to be classified as a wholesale market subject? Then it would be FERC´s time.

But no doubt: in the end it is not only about competence, it is all about “NEM yes or no”. The NEM regimes in 41 states are at stake if FERC is declared competent authority regarding NEM. This scenario fits quite well the Trump line seen on many other occasions. I personally prefer to leave NEM regulation in the states´ hands (this is not a legal assessment).

Make transparency great again!

There is no need to spend too much text on the arguments here. Outstanding institutions and people take care of that. Arik Peskoe´s tweets, Director of the Electricity Law Initiative at Harvard Law, is a great source to follow and understand “FERC-Gate”. And the official “protest” by the National Association of Regulatory Utility Commissioners (NARUC) is a great long version opposing NERA´s petition.

The thing that concerns me most: the lack of transparency regarding the filer of the petition: “New England Rate Payers” (NERA) and the political script behind them that – no doubt – exists. Who is funding NERA? Why has not a single utility filed (“organized boycott”?) I am not naive: I have been working on European and German (prosumer) energy policy for more than a decade now. So, I am used to untransparent policy making processes – but I am still or ever more allergic to it. So, I welcome the discussion on the legal classification of NEM in the US. And I welcome the (more important!) discussion on NEM successor tariffs that might be helpful to European policy makers facing the same challenge. But I prefer a scientific discussion and decision rather than an obscure political one.

The rise of prosumers will continue

It is possible, that FERC and its current political influencers take over control of prosumers in the US. It is then likely that FERC will try to slow down the rise of prosumers and the democratization of the US energy system. But I am convinced that medium term the rise of prosumers will continue. The prosumers´ portfolio of generation, demand and storage flexibilities (Distributed Energy Resources) is key to a successfull energy transition. The US is a prosumer paradise!

Holger Schneidewindt

About Holger Schneidewindt

Holger Schneidewindt is an energy lawyer and policy advisor. He has a decade of experience in energy policy with particular interest and expertise in prosumer subjects, especially related to alternative and renewable energies. As consultant for a German energy consumer NGO, he worked on the “Birth and Rise of Prosumers” along Germany’s pioneering energy transition.

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