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Insights > Company Supports Fair Net Metering Rule
Company Supports Fair Net Metering Rule
10/02/2015
Entergy Mississippi is on record supporting the Mississippi Public Service Commission’s proposed rules on net metering, with suggested but important revisions designed to ensure the rules minimize the potential for harm to customers that either choose not to install self-generation or cannot afford to do so.
We believe our customers should have the choice to self-generate electricity from renewable resources, as well as the ability to provide excess energy to the distribution grid, just as they do today. However, the delivery of electricity back to the grid must be done in a way that does not harm other customers or the communities we serve.
As the proposed rules are written, we believe they would increase the monthly bill of typical, non-net metering customers. This would be unfair to the majority of our customers, who either cannot afford to install solar rooftops or choose not to do so.
Because our lower- and fixed-income customers likely cannot generally afford technologies like rooftop solar panels, any shift in costs created by adopting new net metering rules will likely result in higher electric rates for our customers, many of whom are low- and fixed-income customers that struggle to make ends meet.
Despite popular belief, customers with rooftop solar panels still need the electrical grid, not only to deliver their excess electricity they produce to the grid, but to get electricity when the sun isn’t shining. About 68 percent of our costs to provide reliable, safe and affordable electricity are fixed (the people, poles and lines); therefore, as electricity usage decreases due to self-generation, the revenue we collect from customers to recover these fixed costs falls, creating a shortfall that results in higher electric rates paid by the remaining customers. A shortfall in revenue can be addressed by an increase in fixed monthly charges, which are paid by all customers, or by an increase to the variable kilowatt-hour rate, or some combination of the two.
Increasing our rates, however, places a higher and unfair burden on customers who do not self-generate by shifting costs that are incurred to serve net metered customers onto non-net metering customers. This is harmful to customers who choose not to self-generate or who cannot afford to self-generate.
Therefore, our suggested modifications to the proposed rules recommend that any energy delivered by the utility to the net metered customer be appropriately billed at our normal rates, and any excess energy that the customer delivers to the grid be compensated on the customer’s electric bill at an appropriate rate based on the costs we avoid.
We believe this approach represents a fairer and more equitable way to address net metering and energy delivered to the grid so that other customers are not harmed to the same degree as under the current draft rules. We believe solar energy can contribute to a diverse mix of energy resources for our customers, but we want to ensure it’s executed in a manner that’s fair for all.
What is Net Metering?
Net metering refers to a public policy that generally allows retail customers to offset electricity purchases from the grid with energy generated behind their retail meter. The most common example is a residential customer who installs rooftop solar panels for the purpose of generating electricity for use in his or her home. While solar panels do produce usable electricity for the customer, that production is often sporadic during the day and in any event is not sufficient to fully power the home (or to provide the power to start an air conditioning system, for example), meaning that the customer must continue to stay connected to the grid and rely upon his or her electric utility for electric service. At certain times of the day, those solar panels may generate more electricity than the customer is using, and that extra electricity gets delivered to the grid of the electric utility.
The primary policy considerations of net metering include the manner in which electric utility costs that the customer avoids by self-generating electricity for the customer’s own use are treated (and whether or not those costs are subsidized by other customers who choose not to install self-generation), the bill credit received by the net metering customer for excess self-generated energy that is delivered to the utility’s grid, and how self-generation equipment is safely interconnected to the grid so as to protect first responders, our employees, and the communities that we serve.
