Net metering charges in Virginia

Thursday, December 15, 2011

Virginia regulators recently approved an electric utility's request to impose additional charges on net metering customers with rooftop solar panels or other customer-sited generation.

Net metering -- when utility customers can offset their electric bill by using their own generation -- is a tool to encourage the spread of small-scale generating resources.  Under net metering programs, customers are billed not based on how much electricity they buy from the grid over a given month, but rather based on their purchases netted against what they export from their own generation.  For example, a home or business with solar photovoltaic panels on its roof could use net metering to run its utility bill backwards to the point where the customer has no bill at all.  In some areas, customers can even run up a surplus of power through net metering.

Net metering facilitates distributed generation, in contrast to the centralized utility model that has historically prevailed.  Mixing in some distributed grid-tied generation has advantages for the whole system, such as a reduced need for expensive new transmission lines.  To promote the distributed model, Congress directed electric utilities to make net metering available as part of the Energy Policy Act of 2005.

Now, nearly all U.S. jurisdictions have net metering programs.  Each state's implementation of net metering is unique.  For example, under Virginia law, residential net meterers must pay their utility a "standby charge" -- a monthly amount to compensate the utility for the customer's ability to draw electricity from the grid, even beyond what would be charged under its net-metered bill. 

Earlier, I noted that utility Dominion Virginia Power had asked the Virginia State Corporation Commission to approve “standby” charges on residential net-metered solarphotovoltaic systems larger than 10 kW. Last month, the State Corporation Commission approved part of the utility's request.  The Commission approved a standby charge for transmission and distribution service - $2.79 per kW in monthly distribution standby charges and $1.40 per kW in monthly transmission standby charges.  The Commission denied Dominion's request for generation standby charges for now, but encouraged the utility to come back for another proceeding to determine whether a generation standby charge would be proper.

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