Surviving in Post-Hommrich Pennsylvania
Two and a half years ago the Pennsylvania Supreme Court affirmed Commonwealth Court Judge Michael Wojcik's Opinion in Hommrich v. Commonwealth of Pennsylvania, Pennsylvania Public Utility Commission; 231 A.3rd 1027 (Pa. Cmwlth. 2020). A recent review of the net metering applications and other requirements of several Pennsylvania electric distribution companies (EDC’s) demonstrates that some EDCs have not implemented the holdings of the Hommrich decision in these important informational and decisional materials for customers and developers. To fully promote the General Assembly’s intent of incentivizing alternative energy through net metering, the Public Utility Commission (PUC) should require stricter compliance with the law as interpreted in Hommrich.
In Hommrich, the Commonwealth Court held that several regulations (52 Pa. Code §§ 75.01, et seq.), which were promulgated over the objection of the Independent Regulatory Review Commission (IRRC), went beyond the statutory authority conferred on the Public Utility Commission (PUC) under the Alternative Energy Portfolio Standards Act (Act) and that those provisions were contrary to the requirements of the Act. 73 P.S. §§ 1648.1, et seq. The effect was to invalidate several sections of the PUC’s regulations.
Specifically, the PUC's definition of "customer generator" was found to add a requirement not found in the Act, that a customer generator be a "customer" of the utility, thus implying the need for independent load. The stricken regulations also included a definition of "utility" which is not in the Act. The court made it clear that the Act's definition of Customer Generator does not require any electrical use beyond the needs of the facility itself "a nonutility owner or operator of a net-metered facility may utilize net metering so long as “any portion” of the electricity that the customer-generator generates is used to offset part of the customer-generator’s electrical requirement". Id. The court invalidated the definitions of customer generator and utility. In furtherance of its view that no independent load is required to qualify for net metering, the court also struck 52 Pa. Code § 75.13(a)(1) which required load that had a purpose other than to support the operation, maintenance or administration of the alternative energy system to be present for a project to qualify for net metering.
Despite the court’s holdings that prohibit EDCS from denying net metering eligibility on the basis of lack of customer status or independent load, EDCs continue to have language in customer-facing documents that imply customer generators without independent load may not qualify for net metering.
For example, one EDC's net metering application requires an applicant to acknowledge that "operation of Customer's generation facility is intended primarily to offset part or all of a customer's electricity requirements." Regardless of the EDC’s intent or lack thereof, this phrase is clearly incorrect and misleading, and may confuse or scare off unknowing potential net metering projects. EDC’s customer or developer facing documents should not contain requirements inconsistent with the law.
Other EDC's have similar provisions in their application. For example, another EDC's application asks if the applicant intends to "export" power without defining "export". The available multiple choice answers include: "Yes, Significant annual export/No net-metering/IPP" (emphasis added), suggesting that if a project is going to produce significantly more energy than it consumes that it is not eligible for net metering, which is contrary to the Act. This EDC recently revised its net-metering application to take out language related to the 2007 version of the Act. There are likely other examples.
The PUC is no better when it comes to keeping its regulations current. While the PUC did withdraw a policy statement that had limited the size of third-party owned net-metered projects, to 110% of the customer-generator's annual electric consumption, the PUC order was issued a year after the Supreme Court affirmed the Commonwealth Court's Hommrich decision. The regulations at issue were stricken in 2021 and the PUC has yet to clean them up to reflect their status, nor has the PUC holistically required EDCs to modify their forms or applications to reflect the state of the law after Hommrich. To ensure EDCs are appropriately applying net metering standards and rules, it would be best for the PUC to investigate what EDCs are stating when interacting with potential net metering project developers and provide specific guidance on what net metering related forms and agreements should and should not say. Likewise, the PUC should remove the stricken sections from its regulations so that the unsuspecting public is aware that the law has changed.