FERC Dismisses Petition to Federalize Net Metering by Unanimous Decision

On July 16, 2020, the Federal Energy Regulatory Commission (FERC) dismissed the controversial petition filed by the New England Ratepayers Association (NERA) requesting FERC declare its "jurisdiction over energy sales from rooftop solar facilities."

In April 2020, NERA filed a petition with FERC in an attempt to redirect jurisdictional authority over net metering from states to the federal government. NERA asked FERC to provide a declaratory order by:

"(1)[[D]eclaring] that there is exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter and (2) [ordering] that the rates for such sales be priced in accordance with the Federal Power Act (FPA) or Public Utility Regulatory Policies Act of 1978 (PURPA)."

Commenters in opposition of the petition sought its dismissal on the procedural grounds that NERA failed to disclose the interests it represents, a particular controversy, or specific harm suffered. Commenters argued granting the petition would cause substantial harm and regression to the solar and clean energy industry because it would:

• lead to federal control of retail rates
• fail to effectively consider the variety in net metering programs across states
• undo established state net metering policies
• disrupt state and local energy goals
• harm substantial and long-term investments in clean energy
• risk employment opportunities and jobs in the solar industry
• undermine state economic policies
• affect investments made in light of the retail ratemaking process
• divest states of retail billing, which is strictly a state issue

While FERC declined to address the merits of the petition, it relied on procedural defects to unanimously dismiss the petition. Commissioners asserted that NERA's petition failed to identify a specific controversy or harm, and therefore, no determination from FERC was required. FERC noted its prior rulings in MidAmerican and Sun Edison, where FERC's rulings were required to determine the implementation of certain net metering programs and the participation of such programs by specific parties. (See Sun Edison LLC, 129 FERC ¶ 61,146 at P 1 (confirming that certain solar energy sales to net metered end-use customers do not constitute the sale of electric energy at wholesale in interstate commerce or the transmission of electric energy in interstate commerce for purposes of the FPA); MidAmerican, 94 FERC ¶ 61,340 at P 1 (objecting to the Iowa Utilities Board's implementation of final orders issued pursuant to Iowa's Alternate Energy Production Statute and § 199-15.11(5) of the regulations thereunder, directing MidAmerican to interconnect with three Alternate Energy facilities and to offer net billing arrangements to those facilities.)

While the solar and clean energy activists applauded the decision by FERC to dismiss the petition, Commissioners Bernard McNamee and James Danly addressed in their concurring opinions that the question of jurisdictional authority must eventually be addressed. The order undoubtedly provides a win for the solar and clean energy industry.

Holland and Knight continues to monitor the status of net metering authority at the state and federal level.