Renewable Energy Law Alert: Oregon Revises Net Metering Rules to Encourage Increased Use of Renewable Energy

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Under revised net metering rules in Oregon, businesses, schools, and other non-residential customers of Portland General Electric and PacifiCorp will be able to install up to 2 megawatts of onsite electrical generation, such as solar panels, and qualify for a net metering program that credits the customer-generators for the surplus energy created. Coming only weeks after the Oregon legislature passed a renewable portfolio standard (25% renewable energy by 2025), the new rules continue the trend in Oregon to promote clean, renewable energy.

The new rules adopted by the Public Utility Commission of Oregon on July 24, 2007,1 promote investment in small-scale generation of renewable energy by Oregon's business community. Net metering allows these small generators of onsite renewable electrical power to reduce their electric bill by sending surplus electricity back onto the electrical distribution grid. When surplus electricity flows back onto the grid, the meter dial literally reverses direction, and the utility pays the customer-generator for the surplus energy, thus reducing, or even eliminating, the customer-generator's electric bill.

Under the old rules, residential and nonresidential customer-generators were limited to a maximum of 25 kW, which approximates the amount of power used by an average house. But, in 2005, the Oregon legislature enacted Senate Bill 84. Senate Bill 84 authorized the Commission to adopt rules increasing the size of eligible net metered facilities. The new rules increase the maximum size for nonresidential net metered systems from 25 kW to 2 MW, creating a bigger incentive for Oregon companies, schools districts, and other non-residential utility customers to put solar panels on the roofs of their factories, warehouses and other buildings. The maximum size for residential net metered systems remains 25 kW.

The Commission's task was to find an appropriate balance between encouraging investment in on-site renewable energy generation and protecting utility system safety and reliability. Aggregation of meters was one area where this balancing act played out. Aggregation concerns the ability to combine several net metered facilities so that a surplus from one facility can offset a deficit at another net metered facility. However, increasing the number of aggregated meters can create administrative, safety, and reliability problems for the utilities.

The balance the Commission struck permits the customer-generator to utilize the excess generation energy credits to offset its own usage at more than one meter, subject to certain limitations. The final rule from the Commission allows aggregation of one customer-generator's net metering facilities, if the aggregated facilities are of one rate schedule and exist on one property site. In other words, (1) multiple customer/generators may not aggregate metered facilities; (2) one customer-generator may not aggregate metered facilities subject to different rate schedules, such as residential and commercial; and (3) the metered facilities must be located on contiguous property under one owner.

The new net metering rules also provide more extensive regulations regarding mechanical and safety requirements, interconnection requirements, review procedures based on size and complexity of the net metering facility, billing standards, and other aspects of net metering not discussed here.

A copy of the Commission order and the final net metering and interconnection rules are available at


1 OAR ch 860, div 39

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Jennifer H. Martin
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