Community net metering adopted in New York, Pace cited for key program features

July, 17, 2015
Jordan Gerow
Energy and Climate Law Advisor
Community EnergyRenewable Energy
The Public Service Commission approved the Community Net Metering program proposed earlier this year, which will allow developers of community-supported large-scale renewables to get all the benefits of net metering by crediting renewable energy production against the utility bills of their members. Pace would like to thank Governor Cuomo and the Public Service Commission for their leadership on this issue, which will make a huge difference for developers of clean, community-scale renewable energy projects, as well as for customers who want to purchase clean, local energy but lack the means to build it themselves.
Particularly, in the Commission's Order, we were pleased to see the concept of Opportunity Zones for community DG cited to Pace's comments and endorsed by the Commission. That means that utilities will start identifying areas on their systems where large scale community energy projects can be beneficial. These Zones are critical for Phase 1 of this program, as explained further in the notes below.
This Order will have a huge impact on renewable energy development in NYS, and particularly giving access to customers who couldn't traditionally afford to purchase renewable energy. The State is paying attention to this Order, and it's great to see Pace get a shout-out for helping direct a key part of this program, particularly in its nascent stages.
Some additional notes from the Order:
- The program is divided into Phases 1 and 2. 
  • Phase 1: During first six months, utilities will interconnection only projects that locate at sites where they will bolster grid reliability or provide other locational benefits, and those that promote low-income customer participation. Opportunity Zones will be used to define those projects that provide the requisite locational benefits.
  • Some more detail on what will go into the Opportunity zones: "The maps shall meet these criteria: include street-level resolution sufficient to determine if an individual project site address is within an identified Opportunity Zone; be hosted as an interactive map on the utility’s DG Interconnection website; and be provided in ARC-GIS compatible shapefiles to NYSERDA within the 45 day period. The shapefiles will, at a minimum, outline the Opportunity Zone, include map projection data bundled in the shapefile metadata, and, if not shown otherwise, include street labels at the Zone boundaries. The adequacy of the utilities’ Community DG Opportunity Zones will be reviewed before the tariffs opening their service territories to Community DG become effective. If any Zone is found unsatisfactory because insufficiently broad in geographic scope or not demarcated clearly, the utility could be required to offer its entire service territory to Community DG instead of limiting their location to areas of geographic benefit."
  • Phase 2: Beginning May, 2016, customers may interconnection regardless of locational benefit or low-income provisions.


Program Design:

  • Membership restrictions allow large anchor customers, but cap their total share to 40%: "Membership in a Community DG project is set at a minimum of ten. If any of the individual members are sized in excess of a demand of 25 kW, those members collectively are limited to an aggregate distribution of credits constituting no more than a 40% share of the Community DG facility’s output." Multi-tenant building owners may report their individual tenant's loads to prove they don't belong under the 40% cap.
  • The project sponsor may collect and hold credits for a period of time (as member drop-off may occasionally require), which will be furnished to the utility annually before being split up among remaining members to compensate for any annual production shortfall. No mention is made of what happens if that shortfall doesn't exist.
  • Subscription size: "Members must take a percentage that amounts to at least a minimum of 1,000 kWh annually and cannot take a percentage that is more than its historic average annual consumption."
  • Master-metered buildings: Building owner accrues credits and is responsible for distributing them to participating tenants. 
  • Carryover of credits: Members may carry credits month-to-month, but "Any excess credits accumulated at the end of the annual period ... would be returned to the sponsor."
  • One project per customer: "Utilities may also restrict members in a Community DG project to participating in net metering only through that project."