Net Metering

NOTE: Although, this post is categorized as netmetering, the policy adopted by MS does not meet DSIRE's standards for a typical net metering policy. Net metering policy allows a customer to offset all of their electricity consumption on a 1:1 parity basis within the billing period. The policy adopted by MS only allows instantaneous generation and use to be credited at retail rate; all of the electricity exports are credited at the utility's avoided cost plus a premium. 

On December 2015, the Mississippi Public Utilities Commission (PSC) through an extensive rulemaking process established a method to compensate and incentivize behind the meter electricity generation in the State. The rule requires all the investor owned electric utilities* in the state to allow their customers to own or lease distributed energy resources to offset their electricity use on site and any sell excess electricity to the utilities. Even though the PSC order defines the program as net-metering, the program only allows the netting of electricity use to occur at an instantaneous basis.  Any electricity exported to the grid will be not be used to 'net' the customers  monthly electricity use, instead it will be credited at the utility's wholesale avoided cost rate plus an additional 2.5c/kWh premium, which both add up to less than the retail rate of electricity. 

Eligibility

Any electric customer in the state, including industrial, large commercial, residential, or commercial customer are eligible to install behind the meter generation systems. The distributed energy system ‘systems’ must be powered through renewable energy sources, including solar, wind, geothermal, wave or tidal, hydro, and biomass. Residential systems are limited to 20KW and must be located on customer’s premises. Non-residential customers can aggregate generation systems within their premises up to 2 MW. 

Systems are allowed to interconnect on a first-come, first-service basis until total systems add up to 3% of the utility’s total system peak demand recorded during its prior calendar year. 

Program Description

The interconnected systems will include a bi-directional meter with two channels that can record both the excess electricity generated by the system (channel 2) and the net electricity supplied to the customer from the utility (channel 1). Channel 1 shall record the net of the total electricity produced by the system and the total customer's electricity usage in real time. Electricity self supplied by the customer will be credited at full retail rate. Any generation of the system that is not used by the customer at that particular instant will be recorded in channel 2. This excess generation will be credited at utilities’ avoided cost plus additional “Non-quantifiable Expected Benefits Adder” of 2.5 c/kWh. This would value the excess generation at approximately 7 to 7.5c/kWh. All the excess generation at the end of the billing period will be converted to monetary credit, and be carried over to subsequent billing period indefinitely. This credit, however cannot be applied to reduce any fixed monthly charge or minimum bill component of the electric bill. 

The “Non-quantifiable Expected Benefits Adder” of 2.5 c/kWh is set temporarily to recognize the additional value of distributed generation on the grid. This amount of the adder will be modified within 3 years based on the calculation of actual benefits of the distributed generation. 

Renewable Energy Credits

The Renewable Energy Credits (RECs) represent the environmental attributes of electricity generated by renewable energy system. Generally, RECs remain with the customer, however, if the customer benefits from the “Non-quantifiable Expected Benefits Adder” (DG adder) while selling their excess generation to the utility, then the RECs are transferred to the utility. 

Third Party Ownership

Third Party Ownership (TPO) model is allowed in the state. Under the TPO arrangement, the customer may contact a third party to build PV solar system and agree to make monthly lease payments for the use of that system. This definition of TPO offered by the PSC only includes leases, and does not include third party sales through a power purchasing agreement (PPA) that have been popular in other States. 

Incentive for low income customers

The two largest investor owned utilities in the state Entergy Mississippi and Mississippi Power are required to offer additional 2c/kwh adder to the first 1,000 qualifying low income customers who wish to net meter. To be eligible for this added incentive, the customers must have household income at or below 200% of the federal poverty level, or similar requirement approved by the Commission. This adder will stay in place for 15 years from the date the customer begins the service.

*The PSC previously required all the electric utilities, including cooperatives in the state to provide net metering to its cooperative members. HB 1139 enacted in April 2016 provided that the PSC can require cooperatives to adopt net metering programs, but may not establish the level of compensation or credits for these programs. The South Mississippi Electric Power Association (SEMPA) member cooperatives may choose to adopt the state net metering law or can file their net metering and interconnection standards before the commission by October 3, 2016. These standards must be consistent with the net metering rule adopted by the state. Cooperatives that participate in the Tennessee Valley Authority (TVA) can continue to participate in the TVA sponsored net metering program to satisfy the rule.