Net metering has supported renewable energy generation, particularly the proliferation of solar generation in New York and also has helped renewable energy projects maintain financial viability.

By statute, New York state utilities are required to offer net metering of electricity to generators of certain renewable energy resources, depending on the size of the project. Net metering means that, to the extent that there is surplus energy that is not used by the utility customer on behalf of whom such energy is generated, the excess may be sold to the utility at the customer's retail rate, as long as the size of the project meets the statutory size of projects permitted to take advantage of net metering.

Net metering has supported renewable energy generation, particularly the proliferation of solar generation in New York, and also has helped renewable energy projects maintain financial viability. However, some have opposed the expansion of net metering because of the cost to ratepayers of having their utility pay retail rates to renewable generators for purchasing power. This would potentially raise customers' rates for electricity, so opponents of net metering expansion are concerned that this practice is uneconomic.

In the July 28, 2015, Staff White Paper on Ratemaking and Utility Business Models issued in Track 2 of the Public Service Commission's ("PSC") Reforming the Energy Vision initiative (Case 14-M-0101), the PSC Staff ("Staff") supported the continuation of net metering for the solar industry and recommended that a bill-crediting transaction mechanism, similar to that used in net metering, be considered for other distributed resources. While Staff's recommendation has not yet been adopted by the Commissioners, Staff support for net metering, which many solar companies feared would be eliminated, appears to be a positive step. Comments to Staff's proposal can be filed with the PSC and are due by October 26, 2015.

For Further Information

If you have any questions about this Alert, please contact Phyllis J. Kessler, any of the attorneys in our Energy, Environment and Resources Practice Group, any of the attorneys in our Renewable Energy and Sustainability Practice Group or the attorney in the firm with whom you are regularly in contact.

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