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Michigan Adopts State-wide Net-Metering

March 31, 2005

Now all across Michigan, those shiny banks of inverters will help spin business and residential meters backwards.

Photo: SMA America

Lansing, Michigan []

For at least the next five years, residents and businesses in Michigan will be able to take advantage of net-metering -- often the last crucial step to widespread voluntary consumer adoption of renewable energy systems like solar electric systems and small wind turbines.

"Every kilowatt of electricity generated by renewable energy is a kilowatt that does not produce harmful emissions."

- Michigan Public Service Commission Chairman J. Peter Lark

The Michigan Public Service Commission (MPSC) approved an amended consensus agreement that implements the voluntary statewide net metering program for a minimum of five years. The program covers all renewable energy sources including solar, wind, geothermal, hydroelectric, and biomass, which includes waste-to-energy and landfill gas.

"Today's announcement is an important step in encouraging the use of renewable energy sources," said MPSC Chairman J. Peter Lark. "Residential and small business customers of Michigan electric utilities will be able to put any excess electricity generated back on the electric grid. It's like running the meter backwards."

Under the agreement, net-metered customers will be credited for net excess generation (NEG) at the utility's retail price of generation. Any credits will be carried over from month to month, limited to a 12-month billing cycle. At the end of each 12 billing-month cycle any cumulative NEG credits, may be retained by the utility and the customer's credit will be reset to zero. The value of any generation credits retained by the utility will be used to offset net metering programming costs, thus benefiting net metering customers.

In its order, the MPSC approved an amended version of the consensus agreement. It includes a definition of net metering; basic provisions for utility cost recovery; rates and charges covering customer billing and credits for net excess generation; the total program size for each utility; the maximum size of eligible electric generators; eligible generator technologies; customer application fees and interconnection standards; duration of the program; utility reporting requirements; and program monitoring and evaluation. Based on comments filed, the Commission rejected a provision in the agreement that would have required that all renewable energy certification associated with the customer's generation be owned by the utility.

"Using renewable energy sources makes Michigan that much less dependent on traditional fossil fuels," said Lark. "The whole state benefits because we reduce the demand for electricity produced at plants using fossil fuels. Every kilowatt of electricity generated by renewable energy is a kilowatt that does not produce harmful emissions."

On May 18, 2004, the MPSC issued an order calling for the development of a net metering program. Investor-owned and cooperative electric utilities as well as MPSC staff on Dec. 3, 2004 filed an application seeking approval of a consensus agreement for a voluntary, statewide net metering program. The MPSC on Dec. 21, 2004 issued an order allowing comments to be filed on the consensus agreement. Twenty-seven comments were received.

Utilities are required to report by June 30 each year all data needed to monitor and evaluate its net metering program for the previous 12 months. The data will be incorporated into the annual report to the MPSC by the Michigan Renewable Energy Program (MREP) Collaborative working group. After the fourth year of the program the MREP Collaborative will submit a report to the MPSC evaluating the program and making recommendations for the future of net metering programming in Michigan.

Utilities that signed the agreement have until April 28 to file their proposed tariffs.

Updated: 2016/06/30

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