ERC seeks to amend net metering rules

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THE Energy Regulatory Commission on Monday issued a notice of public discussion on the ERC website on a proposal to close an apparent loophole in net metering rules that could make private owners who ‘export’ excess electricity to the grid eligible for subsidies intended for poor consumers.

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At issue is ERC Resolution 9, series of 2013, which established the rules for ‘net metering,’ a system by which users with their own power supply—typically solar—can transfer the excess to the local distribution grid, which is credited against power they consume from outside.

“Since the lifeline mechanism is based on consumption, it is possible for a net metering customer to become eligible for the discount,” the ERC said, referring to the subsidized lower electric rate granted to low-income customers who use little electricity.

A net meter, according to information provided by the Solar Energy Industries Association (SEIA), runs in both directions. In a solar-equipped home, excess power generated during the day is transferred to the grid, where it is consumed by nearby customers, and the amount transferred out deducted from the amount of grid supply the home uses at night or in cloudy weather.

On average, 20 percent to 40 percent of the output of a solar-equipped house is transferred out to the grid, SEIA explained. In the US, a net metering customer with a 4-kilowatt PV solar installation typically saves about 4,900 kilowatt-hours (kWh), or about $380 annually.

In the Philippines, there are currently 473 participating net metering customers, with a total electricity capacity of 2,954.55 kilowatts, or 2.955 megawatts, a tiny fraction of the approximately 15,800 MW of dependable capacity in the country as of mid-2015.

Lifeline rate may apply
The ERC is questioning what appears to be an oversight in the net metering rules that may let net metering customers take advantage of the so-called lifeline rate, a discounted subsidy rate intended to reduce the electricity costs of poor customers who use little power. Eligibility for the lifeline rate depends on consumption. The threshold varies from distributor to distributor; for Meralco customers, it is 100 kWh or less per month.

Thus it is possible for a net metering customer to ‘export’ enough power to the grid to lower their distributed usage to below 100 kWh, making them eligible for the subsidized rate.

As a result, the ERC proposes to amend the net metering rules to automatically disqualify any net metering user from lifeline rate eligibility.

“This [allowing the subsidy]would be contrary to EPIRA [Electric Power Industry Reform Act], under which the lifeline subsidy is intended for those who cannot afford to pay at full cost,” the ERC said.

Net metering customers should not “enjoy a lifeline discount at the expense of all other non-lifeline customers,” it added.

“As it is, part of the avoided cost is the lifeline subsidy charge, and because of this, the lifeline subsidy requirement as a whole will be shared by fewer end-users, thereby increasing the lifeline charge in [pesos per kWh]paid by all non-lifeline customers,” it said.

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