This case involves a Complaint filed on the 24th day of May, 2010 by Benjamin Riggs relating to the operation of the Town of Portsmouth Wind Generator Facility. The essential claim in the Complaint is that the Town of Portsmouth receives an excessive rate for the output it sells to the Narragansett Electric Company d/b/s National Grid by reason of a 2009 arrangement between the parties. This transaction purports to be a net metering arrangement between the Town and National Grid.
The issues arising out of the Complaint for review in this case are as follows:
(i) Whether the Town receives an excessive rate for output it sells back to National Grid;
(ii) Whether the Facility is a net metering configuration or a wholesale generator according to federal law.
Applying the law to the facts of the instant matter the Advocacy Section has reached the following conclusions:
National Grid has inappropriately permitted a self-standing generator with no material on site load to be net metered and receive credits at a rate that is higher than its avoided cost. By National Grid's own admission in discovery responses its interpretation of state law as it applies to net metering was done in a manner that violates federal law. National Grid indicated that the Rhode Island statute should be interpreted more narrowly to avoid constitutional issues. National Grid did not follow its own stated position in administering its transaction with Portsmouth.
The Portsmouth Wind facility meets the criteria for a Qualifying Facility under FERC regulations. As discussed above, FERC caps QF purchases at avoided cost. This requirement must be followed by state regulatory authorities when satisfying their obligation to implement PURPA.
The Advocacy Section's review of cases addressing net metering and qualifying facilities at the FERC leads it to conclude that the Facility does not meet the FERC definition of a net metered facility. National Grid's data responses, as well as its response to the Complaint, also support this conclusion.
It appears that the Facility has self-certified as a QF by virtue of its submission of Form No. 556 to the FERC in 2008. Although it has been certified, it has not executed National Grid's standard QF contract. It receives a rate that is higher than National Grid's tariffed QF rate per P.I.P.U.C No. 2035, Section III, Rates For Qualifying Facilities. According to the tariff the QF is equal to the payments received by National Grid for the sale of such QF's output into the ISO-NE administered markets for the hours in which the QF's facility generated electricity in excess of its requirements. This is the rate the Portsmouth Facility is eligible to be paid as a QF under the Tariff and under Federal law. National Grid has incorrectly treated the Portsmouth Wind Facility as a net metered customer and has paid a rate equivalent to the Standard Offer charge, plus the kWh component of the distribution, transmission, and transition charge. This payment is in excess of the avoided cost.
To the extent National Grid has recovered from its customers any lost revenues associated with its arrangement with the Portsmouth Wind Facility, this recovery would appear to be inappropriate based on the conclusion that the payments to the Facility are excessive. At a minimum, any further recoveries of costs by National Grid associated with net metering of the Portsmouth Wind Facility, or any similarly situated arrangement should cease immediately.
The Division should order the parties to comply with the mandates of PURPA as set forth in this memorandum. All payments to the Facility should be at the Qualifying Facilities rate as per National Grid tariff No. 2035.