Massachusetts Department of Public Utilities Investigates Issues Relating to Net Metering, Energy Storage, and Forward Capacity Market Participation

On October 3, 2017, the Massachusetts Department of Public Utilities (“DPU”) opened a new docket (D.P.U. 17-146) to investigate two issues: whether energy storage systems paired with net metering facilities are eligible for net metering and what should be done to clarify the rights of net metering facilities to participate in the Forward Capacity Market (“FCM”).

These issues have been percolating for years.  In fact, D.P.U. 17-146 follows directly from prior dockets in which the DPU avoided addressing these policy issues.

  • In June of 2015, SolarCity filed a petition for an advisory ruling on whether a project that combined solar generation and energy storage was eligible to net meter as a Class II net metering facility.  SolarCity resolved the issue underlying its petition outside of the DPU process and withdrew its petition before further proceedings took place. However, National Grid filed comments noting the importance of investigating the issue and urging DPU action.
  • In its recent rate case, National Grid initially proposed ratemaking treatment for the costs and proceeds associated with bidding the capacity of net metering facilities into the FCM.  However, the issue was not addressed because, in February of 2016, the DPU severed National Grid’s proposal from the rate case and reserved it for a future proceeding.
  • In July of 2016, Genbright petitioned the DPU for a declaratory order regarding net metering facilities’ rights to participate in the FCM and for clarification on the applicability of net metering regulations to energy storage projects.  Last month, the DPU suspended its review of that petition in order to open this new docket.
  • In May of this year, Tesla filed a petition for declaratory relief and an advisory ruling with respect to the eligibility of energy storage and solar facilities to net meter where (1) the solar net metering facility has a capacity of less than 60kW, (2) the battery storage charges only from the solar net metering facility, and (3) the battery storage does not export power to the grid.  The DPU issued a narrow advisory ruling, applicable to Tesla only, that such facilities “should be eligible to net meter,” but reserved broader policy issues for this new docket.

For now, the DPU is just seeking comments.  Comments on issues relating to the eligibility of energy storage systems to net meter are due on November 17, 2017, and comments on net metering facilities and the FCM are due on February 1, 2018.

Don’t underestimate this docket.  It reflects a frequent reality in clean energy policy: regulatory frameworks change more slowly than technology.  As the deployment of energy storage with renewable generation becomes more common, and as greater interest develops in accessing the FCM value associated with net metered systems, regulatory frameworks will need to adapt.  The comments received in this docket are likely to set the stage for future policy actions, and policymakers’ early decisions on these issues could have long-lasting consequences.

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