New York net metering laws

In mid-August, New York’s Governor David Paterson signed into law an expansion of New York’s net metering regime. Net metering permits electricity customers to generate electricity on site using their own physical plant and to send, within limits, generation in excess of the site’s needs back to the utility for credit. Most obviously it encourages distributed electricity generation.

The package of legislation signed by the governor increased the amount of distributed generation allowed to be sent back to the grid (per customer and in the aggregate), added customer classes to those eligible to participate in net metering, and expanded the types of generation eligible to participate.

The bills signed into law were A.11146/S.7171 (providing for net energy metering for non-residential solar electric generating systems), A.11592/S.8415 (providing that farm waste electric generating equipment, for purposes of net energy metering, shall not exceed five hundred kilowatts), and A.11582/S.8481 (providing for net energy metering for non-residential customer-generators operating wind electric generating systems). Each bill is available at the New York legislature website. Details of bills A.11582/S.8481 are described below.

These bills modify section 66-l of New York’s Public Service Law [go to “PBS” in link] in a variety of ways to expand the availability of net metering for wind. Changes include:

  • the definition of “customer generator” was expanded to include non-residential customers. Previously, non-residential, non-farm service customers were not eligible to participate in net metering.
  • farm service customers are allowed to net meter wind generators with a rated capacity of 500 kilowatts (up from 125 kilowatts) (residential customers remain at the 25 kilowatt limit)
  • non-residential customers who own or operate wind electric generating equipment located and used at their premises may net meter the lesser of 2 megawatts or the customer’s peak load as measured over the prior twelve months (or, if twelve months of data are unavailable, as determined by the New York Public Service Commission)

Electric utilities subject to the legislation, which is effective January 1, 2009, must develop a model contract and file no later than April 1, 2009, a schedule establishing consistent, reasonable rates terms and conditions for non-residential net metering. The PSC must render a decision on the filed schedule within three months of filing. Current PSC net metering information is found here.

An important limitation is that net metering is available on a first-come, first-served basis, and the utility need net meter rated wind generation only up to an aggregate of three tenths of one percent of the utility’s electric demand in the service area for 2005 (up from two-tenths of a  percent for 2003 demand). Nothing prevents a utility from going beyond these limits, however, and the PSC may increase the limits after January 1, 2012, if it determines that it is in the public interest to do so.

Customers with equipment with a rated generation in excess of 25 kilowatts (up from 10 kilowatts) must pay half the interconnection cost. And whereas the utility previously, and within limits, could require a net metering customer to pay for a dedicated transformer the utility deemed necessary to permit the net metering arrangement, the utility now may require the customer to pay for a transformer and other equipment the utility deems necessary. The amounts a utility may require a customer to pay have remained the same for customers with rated generation capacity up to 25 kilowatts ($750), have increased from $5000 (from $1000) for customers with equipment of rated capacity up to 500 kilowatts, and the PSC will determine standards for non-residential net metering customers (with rated capacity, conceivably, up to 2 megawatts).

The new law also standardized the credit available to net metering customers to that which was previously available only to net metering customers with rated generation capacity up to 10 kilowatts. For all customer classes the credit is now a function of retail electric rates; no longer will larger customers receive a credit at the utility’s (lower) avoided cost rate.

Additional information on New York’s and other states’ net metering practices may be found at the DSIRE website.

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