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Last month, a three-judge panel of the Commonwealth Court of Pennsylvania held that certain net metering regulations of the Pennsylvania Public Utility Commission (PUC) are unenforceable. The regulations at issue are related to the implementation of Pennsylvania’s Alternative Energy Portfolio Standards Act (AEPS Act), which incentivizes the use of electricity generated by renewable sources such as wind, solar, and biomass.

The Commonwealth Court’s ruling in David N. Hommrich v. Comm., Pa., Pub. Util. Comm’n (674 M.D. 2016), leaves some questions unanswered. In Hommrich, the plaintiff, seeking to install solar photovoltaics, challenged PUC regulations pertaining to net metering that he alleged were unauthorized under the AEPS Act. “Net metering” is a system by which renewable energy generators (most often customers using solar photovoltaics) connect to a public utility power grid, and surplus power is transferred back to the grid, allowing customers to offset the cost of the power they draw from the utility. Hommrich alleged that a project that could be approved for net metering under the AEPS Act could also not be approved under the PUC’s regulations, due to the PUC’s definitions of key terms.

Under the AEPS Act, the General Assembly tasked the PUC “to develop technical and net metering interconnection rules for customer-generators.” Section 5 of the AEPS Act, 73 P.S. 1648.5. The Commonwealth Court grappled with the question of whether the PUC exceeded its statutory authority in doing so. Pursuant to the AEPS Act, the PUC’s implementing regulations provide for how “customer-generators” can “net meter,” and defined both terms. The PUC’s regulations are not known for being internally consistent or easy to parse. One of the primary questions before the Commonwealth Court was whether the PUC regulatory definitions of “customer-generator” and “utility” exceeded the PUC’s rulemaking authority.Ultimately, the PUC revised the definition of customer-generator to incorporate the term “retail electric customer” and added a definition for “utility” to make it clear that the definition applies to retail electric customers and not electric utilities, such as EDCs and so-called “merchant generators” that are in the business of providing electric services. The term “merchant generator” does not appear in the AEPS Act or regulations. The Court held that the PUC did, in fact, exceed its authority and that these definitions are invalid due to their departure from the language of the AEPS Act.”

I review this decision in my column for The Legal Intelligencer supplement, Pa. Law Weekly. Read “Who is a Customer-Generator? Uncertainty Abounds for the Pennsylvania PUC” by clicking here.