Provides for net metering of electric generating systems in areas of non-attainment of ambient air quality standards

BILL NUMBER:A409

Title of bill

An act to amend the public service law, in relation to net energy metering

Purpose

Removes restrictions on net energy metering of solar, farm waste, wind, and fuel cell electric generation equipment, thereby open- ing net energy metering to all users; increases size of systems avail- able for net energy metering; increases each utility's cumulative cap on net metering.

Summary of provisions

Section one: * Defines customer-generator, net energy meter, net energy metering, solar, wind, farm waste and fuel cell generating equipment;

* Sets size-of-equipment requirements for net energy metering;

* Requires electric corporations to provide for the interconnection of solar, farm waste and fuel cell electric generating equipment owned and operated by a customer-generator;

* Requires electric corporations to develop model contracts and file schedules that establish consistent and reasonable rates, terms and conditions for net energy metering to customer generators;

* Provides for a rate structure for net metering;

* Sets safety standards;

* Requires customer-generators to comply with any applicable determi- nations of the Public Service Commission relating to restructuring of the electricity industry.

Section two is the enacting clause.

Justification

Solar, wind, fuel cells and farm waste are prioritized in the State's Renewable Portfolio Standard as fuels for procurement to increase the statewide use of renewable energy. "Net energy metering" is a way for customers of utilities who own and operate such systems on-site to receive a financial credit for excess power that is automat- ically sent back into the transmission grid and used by other electric consumers. Net energy metering helps make renewable power affordable. The financial payments or credits derived from net energy metering offset the high costs associated with capital investments in renewable power generation.

However, current law restricts net energy metering on solar, wind or farm waste generating equipment to certain qualified customers (residen- tial), and to smaller-sized systems, and does not include fuel cells. In each utility's service territory, current law caps net metering based on a minuscule percent of a utility's total electric demand. There are no

technical or reliability reasons to maintain such caps, especially given escalating prices for natural gas and oil.

Customers who are interconnected to the grid and who are generating power from renewable sources automatically send any excess or unused power back into the grid where it is then used by other customers. Without net energy metering, the excess energy flows essentially free to the utility and does not provide customer generators with any financial credit. This situation serves as a disincentive for people or businesses to make the large capital investment in renewable electric generation.

For renewable power to become a sustainable source of electric gener- ation, it is incumbent upon the State to remove any conditions which fetter its penetration into the marketplace. In fact, while all states have net energy metering programs, New York has one of the most limited programs in the nation.

Legislative history

2008; A11357A (Kavanagh) - Energy

Fiscal implications

None.

Effective date

This act shall take effect immediately.