Dive Brief:

• The Pennsylvania Public Utility Commission finalized rules for net metering in the state last week, voting 3-2 to allow utility customers with distributed generation (DG) to produce up to 200% of their annual electricity consumption and receive retail rate electricity prices for electricity they send back to the grid, the Philadelphia Inquirer reports. 
• The ruling ends years of debate between utilities and renewables advocates about how to balance a mandate requiring utilities to procure lowest-price generation and a legislative mandate imposed in 2004 requiring utilities to offer a retail rate bill credit to customers for exported electricity. 
• The new 200% limit applies equally to those who export electricity generated with distributed solar or generated by burning methane from animal waste. Residential generators are limited to 50 kW or less in capacity. 

Dive Insight:

Utility regulators in Pennsylvania finalized net metering rules last week that guarantee retail rate remuneration for electricity that owners of rooftop solar and other DG send back to the grid. 

In more than two years of debate, regulators weighed the imperatives of Alternative Energy Portfolio Standards Act, passed in 2004, which stipulates that "customer-generators shall receive full retail value for all energy produced on an annual basis," with a separate mandate to provide lowest-cost electricity. 

"These regulations are narrowly tailored to balance the commonwealth's policy of promoting the development of renewable generation sources with the commission's mandate of maintaining affordable and reliable electricity service for consumers," PUC Commissioner Robert Powelson said.

Former Pennsylvania PUC Commissioner James Cawley said last June that increased distribution generation, driven by net metering, could result in an over-burdened transmission and distribution system and a lack of revenue for needed system investment. Other stakeholders expressed concern that some owners of distributed generation would use the retail rate credit to profit from net metered generation.

Those issues were at the core of the tension between Pennsylvania utilities and renewables advocates, mirroring similar controversies in many other states. 

Hawaii regulators voted last fall to replace NEM with a new incentive system. Nevada regulators last month voted to incrementally lower the credit value to below the wholesale electricity rate by 2020. California regulators voted to keep the retail rate credit in place but to reconsider it in 2019. Solar advocates argue the solar value proposition is compromised by a reduced credit. Utilities argue their non-solar owning customers bear an unfair share of system costs.

Correction: An earlier version of this post referred to James Cawley as a current PUC commissioner. That was incorrect. His term expired in March 2015.