Michigan - Net Metering

August 13, 2008

Summary

In March 2005, the Michigan Public Service Commission (PSC) approved a consensus agreement that implements a voluntary statewide net-metering program for a minimum of five years. Although this ruling is still in effect, changes may be forthcoming. In August 2008, the PSC issued an order adopting a new net metering standard and directing state utilities to file new tariffs by December 31, 2009. At this point it is difficult to say how net metering in Michigan might change because the order itself provides few parameters or details. However, the order does define net metering as "a simple netting on a one-to-one kilowatt-hour (kWh) basis of electricity delivered by the utility to the customer and electricity delivered by the customer to the utility, at least to the point of zero net usage." Presumably, the utilities' new tariffs must be consistent with this definition. Under the current rules, systems that generate electricity using solar, wind, geothermal, biomass (including waste-to-energy and landfill gas) or hydropower are eligible.* The maximum size of electric generators eligible for net metering is less than 30 kilowatts (kW), unless a utility voluntarily sets its limit at less than 150 kW (to match size categories established by the state's interconnection rules). Non-dispatchable generation (e.g. solar and wind) must be sized not to exceed the customer's annual energy needs, measured in kilowatt-hours. Dispatchable systems should be sized not to exceed the customer's capacity needs, measured in kilowatts. The application fees, procedures and requirements of Michigan's interconnection rules also apply to net-metered systems. There is an aggregate program limit of 0.1% of each utility's peak load or 100 kW (whichever is greater). However, utilities are permitted to use a variety of billing options under the consensus agreement, and most utilities' billing practices do not actually constitute "true" net metering. Any customer net excess generation (NEG) is carried over to the customer's next bill on a monthly basis, at rates which vary by utility. A 2007 PSC Staff Report summarizes the different billing methods currently used by state utilities. Any NEG remaining at the end of a 12-month billing cycle is awarded to the utility, and the value of these credits will be used to offset program costs. Customer-generators retain ownership of all renewable-energy credits (RECs) associated with the generation of electricity. Customers may participate for at least 10 years after entering the program. Participating utilities are required to report their program results annually. The data will be incorporated into an annual report to the PSC by the Michigan Renewable Energy Program (MREP) Collaborative working group. After the fourth year of the program, the MREP Collaborative will submit a report to the MPSC evaluating the program and making recommendations for the future of net metering in Michigan. The following utilities are participating in the program: Detroit Edison (DTE Energy), Northern States Power Company (Xcel Energy), Indiana Michigan Power (AEP), We Energies, Consumers Energy, Wisconsin Public Service Corporation, Alger Delta CEA, HomeWorks Tri-County Electric Cooperative, Cloverland Electric Cooperative, Great Lakes Energy, Ontonagon County Rural Electrification Association, Presque Isle Electric & Gas Cooperative, Thumb Electric Cooperative, Upper Peninsula Power Company, and Alpena Power Company. * In October 2005, the PSC approved a request by Detroit Edison to offer net metering to customers with fuel cells and Stirling engines regardless of the fuel used to generate electricity.

Program Overview

Implementing Sector: State
Category: Regulatory Policy
State: Michigan
Incentive Type: Net Metering
Web Site: http://www.michigan.gov/netmetering
Administrator:
Start Date:
Eligible Renewable/Other Technologies:
  • Geothermal Electric
  • Solar Photovoltaics
  • Wind (All)
  • Biomass
  • Hydroelectric
  • Municipal Solid Waste
  • Landfill Gas
  • Wind (Small)
Applicable Utilities: Less than 30 kW
System Capacity Limit: 0.1% of a utility's peak load or 100 kW (whichever is greater)
Aggregate Capacity Limit: Credited to customer's next bill (rates vary by utility); granted to utility at end of 12-month billing cycle
Net Excess Generation: See summary
Ownership of Renewable Energy Credits: Yes

Authorities

Name: Michigan PSC Order, Case No. U-14346
Date Enacted: 3/29/2005
Effective Date: 3/29/2005
Expiration Date: 3/29/2010 (pending review)

Contact

Name: Julie Baldwin
Organization: Michigan Public Service Commission
Address: P.O. Box 30221
Lansing MI 48909
Phone: (517) 284-8318
Email: baldwinj2@michigan.gov

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.