Mass. DPU Issues Orders On Net Metering Storage Eligibility, Storage Ownership, Capacity Market
The Massachusetts DPU issues two orders concerning the interaction of net metering and storage systems, and the interaction of storage systems and the ISO-NE capacity market.
In D.P.U. 17-146-A, the DPU found that net metering facilities paired with energy storage systems (paired systems) are eligible to take service under the net metering tariff, subject to strict compliance with the net metering rules and regulations and requirements specific to paired systems set forth in the DPU's order.
In D.P.U. 17-146-A, the DPU found that an energy storage system in the net metering program is a commercially available technology that is capable of absorbing energy, storing it for a period of time, and thereafter dispatching the energy. "We further clarify that any technology with the ability to produce or generate energy is not an energy storage system for net metering purposes. Therefore, the Department defines 'energy storage system' for net metering purposes ('ESS') as: a commercially available technology that is capable of absorbing energy, storing it for a period of time and thereafter dispatching electricity; provided, however, that an energy storage system shall not be any technology with the ability to produce or generate energy."
"This definition applies to the net metering rules and regulations moving forward," the DPU said
In D.P.U. 17-146-A, the DPU found that, "At this time, we find that the Distribution Companies do not have exclusive title to the energy rights associated with an ESS that is part of a paired system. Furthermore we find that allowing paired systems to net meter does not alter a Distribution Company’s obligation to (1) register Class II and III net metering facilities with ISO-NE as SOGs [Settlement Only Generators] and (2) apply any energy market payments obtained to reduce the costs of net metering borne by all ratepayers. Therefore, all Class II and III net metering facilities paired with ESS must meet ISO-NE rules and requirements to ensure that the net metering facility can participate in the ISO-NE energy market."
In D.P.U. 17-146-A, the DPU stated, "At this time, we are not persuaded that the pairing of an ESS with a net metering facility alters the Distribution Companies’ right to the capacity of Class II and III net metering facilities. Therefore, the Department directs all Class II and III net metering facilities paired with ESS to meet ISO-NE rules and requirements to ensure that the net metering facility is eligible to participate in the ISO-NE capacity market. The Department puts host customers of paired systems on notice that they must be aware of current and evolving ISO-NE rules and requirements. It is the host customer’s and not the Distribution Company’s responsibility to ensure that the net metering facility portion of a paired system remains eligible to participate in the ISO-NE energy and capacity markets."
The DPU further addressed capacity market issues in D.P.U. 17-146-B, where the DPU addressed a compromise proposal from stakeholders.
Under the compromise proposal, Distribution Companies are required to monetize the capacity of DG Facilities in one of two ways: (1) directly monetize the capacity by qualifying and bidding that capacity into the FCM to obtain a CSO (“Option 1”); or (2) register the DG Facility in the FCM to passively earn performance incentive payments under ISO-NE’s PFP rule (“Option 2”)
The compromise, adopted by the DPU, also include a buy-out option. Under the DPU's order, each Distribution Company is directed to accept one-time payments from Facility Owners of eligible facilities that make a written request to purchase the capacity rights associated with an eligible facility. The payment shall be calculated based on a buyout formula as modified by the DPU's order and shall result in a permanent transfer of capacity rights from the Distribution Company to the Facility Owner.