Meantime, Washington regulators granted Puget Sound Energy cost recovery for liability insurance that protects the utility from customer damage claims, as well as for damage by net metered generation systems to its distribution system. Washington's net metering legislation applies to the state's three investor-owned utilities - Puget Sound, PacifiCorp and Avista - but only Puget currently has customers standing in line to sell it home generated renewable power. It wanted resolution of the liability issue before entering into any net metering agreements.
Net metering allows owners of small scale renewable energy systems to offset their utility bills by generating their own power and feeding any excess to the grid - running the electric meter backwards.
"Puget had a concern in this litigious world that they could be responsible for something on the other side of the meter," says Peter West of the Renewables Northwest Project, a renewable energy pressure group. "Traditionally, regulators reinforce the concept that the utility is not responsible, especially since metering has to meet all electric and building codes. From our perspective, the issue was made up, but Puget continued to feel strongly about it."
Puget was also concerned about who would pay for damages to its distribution system or to its workers if the net metered generation went awry. It could damage Puget's distribution facilities or it could send electrons into Puget's system when the system is down, endangering workers who repair the lines, according to the utility's Dorothy Bracken.
One way to calm Puget's fears and protect its pocketbook is for the Washington Utilities and Transportation Commission to give it the ability to recover a $10,000 annual premium in its rates. Spread over 900,000 customers, the rate impact will be minuscule. Another way is to modify language in the legislation so that liability in cases of damage is clarified. West says Oregon's 1999 net metering legislation, which Renewable NW helped to formulate, takes care of this problem. This, he says, will give Puget a longer-term fix regarding liability.
West points out that much of this is a non-issue because to hook up to the power grid, the generator already has to install an inverter on its side of the meter. An inverter ensures the direct current power from the renewable generator is inverted to alternating current and matches the power quality delivered on the utility system. It also acts as protection because when the utility system is down, power will not be delivered outside the home. "Utilities are very wary of home generators because many of the gas-powered emergency generators used by customers during power outages are connected into the system wrong," says West. With an inverter that is not a problem.
West is also hoping for a ruling on whether Washington's tax on electricity sold and produced in the state applies to renewable generation under the net billing law. He says a Washington tax ruling says it should. "Public agencies should encourage people to use renewables," West says. "In our minds, this ruling by the state tax authority is harassing people who want to do the right thing."
If the legislation is reopened, West expects Avista, with headquarters in Spokane, Washington, to try to add fuel cells to the list of renewable sources already in the law. The addition of fuel cells will be opposed by Renewables NW, however, because of the pollution emitted from natural gas fired fuel cells. "This legislation is for getting clean renewable energy to the market," stresses West.
Both Oregon and Montana passed net metering legislation in 1999, while Idaho adopted a similar order through its utility commission.