ERC notes legal drawbacks in net metering

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    The Energy Regulatory Commission (ERC) said some of the provisions of the Department of Energy’s (DOE) draft department circular to encourage net-metering may not align with other laws.

    ERC issued the statement in a letter to the DOE after the latter crafted its own department circular entitled Policies to Enhance the Net-Metering Program for Renewable Energy Systems and Other Mechanisms to Ensure Energy Security shortly after the ERC has also amended its own version of net-metering rules last October.

    Net-metering is a system that allows the sale of excess power generated from consumer-owned renewable energy installations to the local distribution grid of electric distribution utilities that can be paid via an offset to the monthly power bill.

    The ERC noted possible legal drawbacks of the DOE’s draft circular citing the multiple proposed compensation mechanism is not consistent with the provisions of the Renewable Energy (RE) Act and the Electric Power Industry Reform Act.

    It also warned the draft circular’s Sections 6 (Own-Use RE Systems with Above 100 kW capacity) and 7 (Own-Use RE Systems as Emergency Supply Option) are not supported by the express provisions of the RE Act apart from responsibilities imposed upon ERC under Section 11 has already been addressed with the promulgation of the Amended Net-Metering Rules.

    It said the use of retail rate as one of the compensation mechanism instead of blended generation cost that the ERC adopted in its recently promulgated amended net-metering rules, will consequently increase the generation cost of the distribution utility that in turn may affect consumers.