March 29, 2005

The Michigan Public Service Commission (MPSC) today approved an amended consensus agreement that implements a voluntary statewide net metering program for a minimum of five years.  Utilities that signed the agreement have until April 28 to file their proposed tariffs. 

Net metering occurs when customers produce electric energy in excess of their needs, providing power back to the serving utility and permitting the customer to receive a credit for power they supply to the system.  The program covers all “renewable energy source” electric generating technologies as defined in Public Act 141:  solar, wind, geothermal, biomass, including waste-to-energy and landfill gas or hydroelectric.

“Today’s announcement is an important step in encouraging the use of renewable energy sources,” said MPSC Chairman J. Peter Lark.  “Residential and small business customers of Michigan electric utilities will be able to put any excess electricity generated back on the electric grid.  It’s like running the meter backwards.”

The MPSC on May 18, 2004 issued an order calling for the development of a net metering program.  Investor-owned and cooperative electric utilities as well as MPSC staff on Dec. 3, 2004 filed an application seeking approval of a consensus agreement for a voluntary, statewide net metering program.  The MPSC on Dec. 21, 2004 issued an order allowing comments to be filed on the consensus agreement.  Twenty-seven comments were received.

In its order today, the MPSC approved an amended version of the consensus agreement.  It includes a definition of net metering; basic provisions for utility cost recovery; rates and charges covering customer billing and credits for net excess generation; the total program size for each utility; the maximum size of eligible electric generators; eligible generator technologies; customer application fees and interconnection standards; duration of the program; utility reporting requirements; and program monitoring and evaluation.  Based on comments filed, the Commission rejected a provision in the agreement that would have required that all renewable energy certification associated with the customer’s generation be owned by the utility.

Under the agreement, net-metered customers will be credited for net excess generation (NEG) at the utility’s retail price of generation.  Any credits will be carried over from month to month, limited to a 12 billing-month cycle.  At the end of each 12 billing-month cycle, cumulative NEG credits, if any, may be retained by the utility and the customer’s credit reset to zero.  The value of any generation credits retained by the utility will be used to offset net metering programming costs, thus benefiting net metering customers.

Utilities are required to report by June 30 each year all data needed to monitor and evaluate its net metering program for the previous 12 months.  The data will be incorporated into the annual report to the MPSC by the Michigan Renewable Energy Program (MREP) Collaborative working group.  After the fourth year of the program the MREP Collaborative will submit a report to the MPSC evaluating the program and making recommendations for the future of net metering programming in Michigan. 

Information on MREP activities is available on the MPSC Web site:  michigan.gov/mrep.

“Using renewable energy sources makes Michigan that much less dependent on traditional fossil fuels,” said Lark.  “The whole state benefits because we reduce the demand for electricity produced at plants using fossil fuels.  Every kilowatt of electricity generated by renewable energy is a kilowatt that does not produce harmful emissions.”

The following utilities signed the consensus agreement:  Alpena Power Company, Indiana Michigan Power Company, Edison Sault Electric Company, Upper Peninsula Power Company, Wisconsin Public Service Corporation, Wisconsin Electric Power Company, Northern States Power Company, Consumers Energy Company, The Detroit Edison Company, the Michigan Electric Cooperative Association, and the Michigan Electric and Gas Association.

The MPSC is an agency within the Department of Labor & Economic Growth.

Case No. U-14346

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