MA considers expanding net metering for small hydro

Tuesday, November 25, 2014

Massachusetts energy regulators are investigating whether to allow more small hydroelectric projects to benefit from a policy known as "net metering."
Net metering allows electric customers with their own small generators to sell the power they produce to the utility grid, offsetting the customer's bill for power purchased from the grid.  This effectively incentivizes electricity consumers to develop customer-sited generation that can generate power at a lower cost than grid-delivered power.  Many states have adopted net metering programs to encourage renewable and other distributed generation.  Most states' programs are restricted by size (a project's maximum generating capacity, or the program's total enrolled capacity) and by technology (e.g. solar photovoltaics usually qualify, but coal usually doesn't).

Massachusetts' current version of net metering allows customers to qualify by installing any type of generating facility, including a hydroelectric facility, as long as the facility is smaller than 60 kilowatts.  Size limits are larger for certain projects powered by wind, solar photovoltaics, or anaerobic digestion, as well as for farm-related "Agricultural Net Metering Facilities" -- up to 2 megawatts for most such projects, or 10 MW for some publicly owned facilities.  But under Massachusetts' current rules, hydroelectric facilities that are larger than 60 kW and are not Agricultural Net Metering Facilities are not eligible for net metering.

Whether that restriction makes sense is now the subject of an investigation by the Massachusetts Department of Public Utilities.  The 2014 enactment by the state legislature of An Act Relative to Credit for Thermal Energy Generated with Renewable Fuels, Chapter 251 of the Acts of 2014, directed the Department to study the feasibility, impacts and benefits of allowing customers to net meter electricity generated by micro-hydro and other small hydroelectric facilities.  The Act directed the Department to develop a report based on this analysis, and to submit the report to the legislature by July 1, 2015.

The Massachusetts DPU opened its investigation on October 16, 2014.  In the Department's order opening the investigation, it posed 13 questions to the public.  Topics ranged from the proper definition of "small hydroelectric" to the pros and cons of allowing new or existing small hydroelectric projects to net meter.   Written comments on these questions are due by the close of business on December 5, 2014.  In addition, the DPU held a technical conference on November 7 at which these issues were explored.

What will the Massachusetts Department of Public Utilities find regarding net metering and small hydroelectric projects?  How will the state legislature respond to the DPU's report expected this coming summer?  Will Massachusetts expand net metering opportunities for small hydropower?

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