December 24, 2015

Virtual Net Metering

OLR Report 2015-R-0264 describes the virtual net metering program, including data on (1) projects that are currently operational or approved but waiting to proceed, (2) the value of distributed virtual net metering credits, and (3) the program's cost to ratepayers.

Traditional net metering allows a renewable energy system's owner to receive billing credits for power generated by the system, in effect running the meter "backwards."  If the system produces more power than the owner used in a billing period, the credits can be applied to future bills.  With virtual net metering, the system's owner can share these excess credits "virtually" with other owner-designated accounts, thus running their meters backwards too.

In Connecticut, the law limits virtual net metering to municipal, state agency, and agricultural customers who meet certain requirements (CGS § 16-244u).  Among other things, the law specifies (1) which types of renewable energy systems can participate for each customer type, (2) generating capacity limits, (3) the types of accounts that can share virtual net metering credits with the host facility, and (4) that credits are calculated at the wholesale power generation rate plus a portion of the electric company's transmission and distribution rates which decreases from 80% to 40% over three years.

The law also caps virtual net metering credits at $10 million per year, divided between the state's electric distribution companies (Eversource and United Illuminating) in proportion to their respective customers' electrical load.  Within that total, each eligible customer type (municipal, state agency, and agricultural) is further limited to 40% of the allowed credits.

Read the full report here.