New DPU Regulations Promote Adoption of Renewable Energy

Net metering "model tariff" is part of process to benefit customers who generate their own renewable power

BOSTON – Setting in motion a key provision of landmark energy reform legislation signed by Governor Patrick, the Department of Public Utilities (DPU) today adopted new rules that encourage Massachusetts consumers to invest in renewable resources such as solar and wind power.

The new DPU rules govern the financial relationship between the Commonwealth’s electric utility companies and customers who install renewable energy systems through a practice known as “net metering.” The order approved today establishes a “model tariff” enabling electric customers who install wind and solar power to be compensated at retail rates for selling excess electricity they generate back to their electric companies. Prior to the Green Communities Act of 2008, customers who opted to net meter could only be compensated at the lower wholesale rate for their excess power.

“Governor Patrick has set a clear course toward a clean energy future for Massachusetts, and these regulations move us further along that path,” said Energy and Environmental Affairs Secretary Ian Bowles, whose office includes the DPU. “Net metering increases the value of renewable power for consumers who install it for their own use.”

“These rules will put renewable power generated on-site on economic par with electricity purchased from the grid,” said DPU Chairman Paul Hibbard.

Through net metering, customers who generate electricity for their own consumption can earn credits from their electric distribution company if they generate more power than they use. Credits may be banked or allocated to other customers, allowing those without facilities to take advantage of net metering benefits as well.

In June, the DPU adopted net metering regulations reflecting Green Communities Act changes that lifted a previous restriction limiting net metering to on-site generation with a capacity of 60 kilowatts or less. Now, customers who own larger wind turbines or solar power installations – up to 2 megawatts – can offset their electric bills with credits for the extra power they don’t use, and at the higher retail price. The regulations also provide for “neighborhood net metering,” allowing credits for renewable power generation to be shared among households in a neighborhood.

The DPU developed today’s new model tariff following a series of stakeholder meetings that yielded a diverse array of ideas on how to implement the Green Communities Act’s net metering provisions. The next and final step in this process calls for each electric distribution company to file with the DPU its own tariff, detailing how customers will be compensated for their excess electricity, consistent with the model issued today.