Misconception about net metering

The Tribune’s recent article, “Make money from CUC with net metering” is not correct. Properly applied, net metering does not produce money for the power company nor the user. It does allow an independent producer to supplement, through their own power generation, the power that they receive from the grid for their use and to return that power at a later time for no charge. To use the example in the article, if a customer produces 2,000 kwhs, but only uses 1,500 kwhs, he or she could sell the remaining 500 kwhs to CUC for half of CUC’ rate. That is not net metering. That is an electricity production business for profit. Business profits are taxable income. An example of net metering is when a customer uses 3,000 kwhs in a month from CUC when the customer’s source in not producing (such as no wind for wind generator) but during the month when the wind blows it produces an extra 2,000 kwhs that are put back into the CUC grid. The 2,000 kwhs are returned to CUC via the electrical meter that also runs backwards. So the customer gets 3,000 kwhs from CUC and returns 2,000 kwhs. The customer’s net use for CUC electricity—hence the term net metering—is the 1,000 kwhs usage now showing on the meter. He pays CUC for that electricity. Net metering applies only to those customers that would still owe CUC at the end of the month regardless of the amount of the customer’s electricity production. At this time, the savings from the net metering are not considered taxable income in the U.S.

Electricity production for profit opens up a host of problems for CUC and the producer. Two electricity meters are needed at each source. One to meter power in and one to meter power out. It would require a separate accounting system so CUC would to know who to pay and how much. And at the end of the year CUC might have to send IRS forms 1099 for miscellaneous income to some of those producers that made a few bucks selling their electricity to CUC. For the rest, that are tax returns, business licenses, GRTs, etc, for those small producers. Also, as commercial power plants, small producers will most likely need permits or waivers from EPA, DEQ, CRM, DLNR, DFW, and others. That is federal law. Selling your power to CUC at their terms—50 percent of the rate CUC charges—makes no sense if your production and amortized equipment costs exceed the price CUC is offering to pay. And since the purchase price of the excess power was established as law, they can change that law to 25 percent or 10 percent or whatever they choose, whenever that choose or when the legislators need new SUVs. But actually, I think that years ago federal courts ruled that monopolies such as CUC must pay small irregular producers the full rate for power purchased. The Legislature should check into that issue before they pass more bills loaded with their gobbledygook. With net metering none of this applies and CUC gets supplemental power to its grid and a reduction in demand with a lot less hassle and expense for everyone involved.

Net metering will never provide a significant amount of electricity to CUC’s grid. It would take thousands of CUC customers producing small amounts of electricity and participating in net metering to put a small dent in the island’s demand for electricity. But there is individual satisfaction that would come from producing renewable energy and taking some control over your electricity use and expenses. I am all in favor of that concept.