A divided Pennsylvania Public Utility Commission on Thursday set rules and limits for "net-metering" customers who generate their own power from sources such as solar panels.

The PUC voted, 3-2, to adopt regulations that will allow "customer-generators" to produce up to 200 percent of their annual power needs and receive retail electricity prices for any surplus they sell back to the grid.

The rules, two years in the making, had attracted intense interest from utilities, solar advocates, and farmers who generate excess electricity from solar panels or by burning methane from animal waste.

The commission struggled to balance two conflicting mandates: requiring utilities to procure power at the lowest price versus satisfying the Alternative Energy Portfolio Standards Act, which requires utilities to pay "customer-generators" the retail price for their excess power production.

"These regulations are narrowly tailored to balance the commonwealth's policy of promoting the development of renewable generation sources with the commission's mandate of maintaining affordable and reliable electricity service for consumers," Commissioner Robert F. Powelson said.

The commissioners who voted against the new rules, chair Gladys M. Brown and vice chair Andrew G. Place, asked whether the PUC had the authority to set the 200 percent limit. The Alternative Energy Portfolio Standards law already sets a limit for a residential generator of 50 kilowatts.

Acrimonious debates over net-metering rules have broken out in some states where regulators have moved to reduce the economic incentives for customers to generate their own power.

Utilities are concerned that customers who generate their own power are "free riders" on the electric-distribution system, forcing them to raise rates on remaining customers to cover the system's costs. Regulators in some states have moved to impose monthly fees on solar customer-generators.

In December, Nevada regulators approved new rules to triple the fixed charges that solar customers will pay over the next four years and to dramatically reduce the credit that solar customers receive for excess generation.

Solar advocates said the new rules make rooftop solar economics unworkable. After the new rate took effect Jan. 1, several large residential solar companies said they would cease operations in Nevada.

Pennsylvania's new 200 percent limit is actually more generous to solar producers than the rules in surrounding states, said PUC spokesman Nils Hagen-Frederiksen. He said the commission's majority believed the limit was needed to prevent some small residential solar customers from turning the net-metering benefits into a business opportunity.


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