Net metering policies have been in effect since the 1980s, but not all of those policies still make sense today. Keep reading to learn what net metering is, and to find out how net metering might be costing your family more than you should have to pay for your home’s electricity.
What is Net Metering?
Net metering is a billing arrangement between a utility company or nonprofit electric coop and a smaller power producer (like the Watt Family, who has installed solar panels on their roof).
The solar energy the Watt Family generates is used to power their home. Sometimes they’re even able to create even more energy than they need. When that happens, they can send their extra energy back to the electric coop to be shared with the coop’s other member-owners.
The net metering billing arrangement between the Watt Family and the coop decides how the Watt Family will be credited for the excess energy it sends back to the power company. This is dictated in part by state and federal legal requirements.
What is a Net Meter?
The net meter itself is a tool that tracks exactly how much energy the Watt Family is using from the coop’s power sources and exactly how much solar energy the Watts are sending back to the coop after powering their own home.
Net metering started out with good intentions: it was designed as a simple way to track energy sharing by smaller energy producers like the Watts. While net meters are still fine, the policies surrounding net metering don’t always makes sense today.
Why Net Metering Policies Don’t Make Sense Today
Under current net metering legal regulations, your electric coop may have to pay small producers like the Watt Family retail price for the wholesale electricity they add back to the power grid.
When that happens, your coop incurs costs that it cannot recoup. The coop has to shift some of that cost on to you, its member-owners, in your monthly electric bills.
Unfair Cost Shifting
If your local grocery store had to pay farmers retail prices for eggs, milk, or meat, your grocery bills would get a lot more expensive. That wouldn’t be fair to you, the shopper, right?
Electrical power is no different. If your coop is required by law to pay small power producers like the Watt Family retail prices for their wholesale power production, your electricity bill gets more expensive. That’s not fair to you, the Missouri electric coop member-owner, and that’s why we call it unfair cost shifting — because you shouldn’t have to pay the price of independent renewable energy production by other member-owners in your community.
Missouri’s Coop Member-Owners Cannot Afford to Foot the Bill
A large majority of Missouri’s coop member-owners live on fixed incomes or low wages and cannot afford to install renewable energy systems. These member-owners need reliable, affordable electricity for their homes without any fancy bells or whistles.
These fixed- or lower-income member-owners don’t have access to alternative energy sources like solar panels or wind energy because they simply cannot afford the installation costs. If they have to pay higher electric coop rate to subsidize those members who do have the ability to install renewable energy sources, it creates a system imbalance.
Equity in Electricity
Your local coop appreciates — and sometimes needs — the extra electric power that small producers like the Watt Family add back to the grid. The goal is to fairly reward families like the Watts for producing extra power without unfairly shifting the cost of renewable energy production on to the majority of our member-owners.
Your coop’s principles make us stewards for our entire communities, which means that we must advocate for policies that make sense for all of our member-owners. Come back to the blog to learn about policy options that encourage renewable energy creation without unfairly shifting its cost on the member-owners who can least afford it.
Consumers today want to know where their food comes from. They want to know how it was produced and they want assurances that it is safe and healthy to eat.
There’s a growing trend to keep it local, buying foods that were produced close to home instead of being shipped in from some far off location. I’ve even heard people say they want to know the farmer who raised that pork chop or beef steak.
If you’re that kind of person, you need to join me at the Missouri State Fair set for Aug. 11-21. I can’t think of a better place to meet those farmers who put the food on our table.
Unlike state fairs in other states, Missouri’s fair continues to be a showcase for agriculture. You can see that in the Ag Building where Missouri beekeepers sell jars of honey, Alewel’s Country Meats tempts us with their delicious ham biscuits and the winner of the giant pumpkin and watermelon contests — sponsored by Rural Missouri — will be on display.
I always enjoy seeing the livestock raised and shown by the youth of our state. Anyone who puts that much effort into producing a grand champion is destined to do great things in the future, I believe.
I’d like to invite you to stop by the Missouri’s Electric Cooperatives Building, the coolest place at the fair thanks to its ground-source heat pump. We always have a great time visiting here with electric cooperative members from around the state.
Buddy Bear, the Rural Missouri mascot, will make personal appearances and you can get your picture taken at the Just4Kids booth. We will once again have energy experts from Missouri’s electric cooperatives on hand to show you ways to trim your electric bill down to size.
You can discover the value of being a cooperative member, take a picture at our new bucket truck selfie stop, learn about our commitment to renewable energy and recharge your cell phone while the kids color a picture.
We also have an important issue we’d also like to discuss with you while you are at the fair. We call it “Fairness Down the Lines,” and it deals with the importance of having everyone who uses the rural electric grid pay their share of its cost.
Special interest groups want to change Missouri’s net metering law, unfairly shifting costs from the select few who have solar panels on their homes to the member-owners who do not.
Our perspective is simple: because all members are continuously connected to the grid, all members should pay evenly to maintain it. Special interest groups, however, have other ideas.
In the 2016 legislative session, these groups filed legislation and tried to use an initiative petition to obtain their unfair agenda. Missouri’s Electric Cooperatives and other utilities helped stop those special interest groups in 2016, but we know they will soon be back to attempt these changes again.
That’s why we want to educate you on our “Fairness Down the Lines” campaign.
Missouri’s electric cooperatives are strong supporters of agriculture and the Missouri State Fair. We hope you will attend this year and, as the 2016 theme suggests, “See what crops up.”
You can find more information about this year’s Missouri State Fair on page 32 of this issue or by visiting www.mostatefair.com.
Consider this: Two cars drive down a stretch of Missouri highway. Both benefit from the smooth pavement, the guardrails, the new bridges and the wide shoulders. Both contribute to the potholes and other wear and tear on the roads.
What’s the the difference? One car runs on gas. Its driver pays a tax on every gallon of fuel purchased to power the car. Money collected from this tax pays for the repair and improvement of state and federal roads and bridges.
The other car runs on electricity. Its driver never stops at a gas station to buy fuel and, as a result, never pays the tax. The electric car owner has a “free ride” so to speak as he or she uses Missouri’s highway system.
State and federal transportation officials are aware of this disparity as more and more drivers switch to hybrid or all-electric vehicles. Likewise, electric utilities like your electric cooperative are concerned that this type of situation could also affect the electric grid we all depend upon.
This is why we have launched our “Fairness Down the Line” initiative. It deals with the importance of having everyone who uses the rural electric grid pay their fair share of its cost.
Special interest groups want to change Missouri’s net metering law, unfairly shifting costs from the select few who can afford solar panels on their homes to the member-owners who can’t afford solar panels.
In the 2016 legislative session, these groups filed legislation and tried to use an initiative petition process to achieve their unfair agenda. Missouri’s Electric Cooperatives along with other utilities helped stop those special interest groups in 2016, but we know they will be back to attempt these changes once again.
Members with solar panels benefit from the same grid you and I use nearly 24 hours of every day — either to buy power for their home when the sun isn’t shining or to sell power when their panels are generating more energy than the member needs. Shouldn’t these members pay their fair share to maintain the grid since they use it?
One little-known fact is that solar panels require a connection to the grid to function. It takes electricity to operate the device that converts DC power from the panels to AC power used in the home.
During a power outage, solar panels by design shut down. This ensures they don’t continue to generate power, which could move out over the grid, causing injury or death to lineworkers making repairs.
The co-op business model in Missouri has been successful because we work to provide what members want at a price they can afford. In fact, the third Cooperative Principle — which addresses Members’ Economic Participation in the cooperative — speaks to this: “Members contribute equitably to, and democratically control, the capital of the cooperative.”
At annual meetings all summer long, and at the Missouri State Fair, we talked to thousands of members who agree with us. They told us they want affordable and reliable electricity. They told us they don’t mind paying their share of the costs associated with bringing them electricity. But they draw the line at paying other’s share of these expenses.
We will be visiting more with you about this issue. Our goal is to ensure the price charged for electricity is fair for all. Please join the conversation on fairness by visiting www.4energyfairness.com or www.facebook.com/moelectriccoops.
Net metering is a process that enables Missouri Electric Cooperative Member-Owners with a wind or solar system on their home or business to export power that is in excess of their immediate on-site needs.
If a Member-Owner generates more power than he or she purchases from your Cooperative during the monthly billing period, your Cooperative provides the member with a credit.
Member solar panels generate to the grid: 1,000 kWhs
Member receives from the grid: 950 kWhs
Member receives avoided cost credit for:50 kWhs
Under current net metering laws, the cooperative is not able to recover distribution expenses and demand costs through kilowatt-hour sales when a member installs a solar array or wind turbine. Those distribution expenses and demand costs are then spread to the cooperative membership without solar or wind to maintain vital infrastructure – distribution lines, poles and equipment, along with the transmission network and power plants delivering 24/7 electricity to all members.
A survey poll was recently completed all across Missouri to see what Missourians think about net metering. The survey showed that 82 percent of Missourians think that reliable and affordable electricity is the top priority for net metering.
Most importantly, the majority of electric users in Missouri said that when it comes to proposed net metering law, fairness to all Member-Owners — having everyone pay their fair share of costs — is more important than offering subsidies to Member-Owners who have solar and wind systems.
Our 2016 Missouri Electric Cooperatives membership survey showed that nearly 80 percent of Member-Owners are not willing to pay more for their electricity to help subsidize their neighbors who want to install small scale renewables.
The energy output from a solararray or wind turbine does not typically coincide with a Member-Owner’s peakload: early in the morning on a cold winter day. That is why a diverse powersupply including coal and gas is so important. The chart below shows thatreplacing Missouri’s existing baseload resources with 5,000 megawatts of windor solar leaves a huge gap between what Member-Owners need to power their homes and what wind or solar would provide on a peak winter day.
Renewable interest groups and solar vendors are pushing for changes to current net metering statutes. Those changes would increase subsidies paid by Members-Owners who don’t have wind or solar.
Key points of those changes include:
System Size: Current law limits net metering to systems of 100 kilowatts or less. Proposed changes would increase the size to 500 kilowatts or less. This would allow businesses to put in larger arrays that generate more electricity, reducing the kilowatt hours they purchase from your Cooperative. This shifts more costs to the rest of your Cooperative’s Member-Owners.
Retail Rate Credits for Net Excess: Paying the retail rate for a kilowatt hour unfairly shifts costs onto Member-Owners who do not have a solar or wind system. It also forces your Cooperative to pay a higher cost to purchase power than it would incur with its own generators.
Annualized Net Metering Billing: This has the same effect as paying retail for any net excess. Annualizing the net metering account would carry the monthly net excess forward as kilowatt hours at a retail rate, not a credit for kilowatt hours at avoided cost.
Missouri’s Electric Cooperatives are open to alternative sources of generation. This is apparent with our leadership to bring the first wind farms to Missouri.
In 2015, wind provided 12 percent of our Member-Owners’ kilowatt hours. The 750 megawatts of wind power on our system is projected to produce the amount of energy used by about 181,000 Member-Owner households in a year. In addition, about 8 percent of our power needs in 2015 were met by hydropower. This is a clean and inexpensive generation source.
Missouri’s Electric Cooperatives’ “Take Control & Save” energy efficiency program is designed to help you use energy more efficiently, creating significant cost savings for you. The energy savings from the “Take Control & Save” program could power about 96,000 homes for a year.
Most of Missouri’s Electric Cooperatives’ Member-Owners have a fairly simple rate structure made up of two parts: a member charge and a kilowatt hour charge. The member charge is a fixed amount, and the kilowatt hour charge varies based on the number of kilowatt hours you use during the month.
The member charge helps your Cooperative recover a small part of the fixed distribution costs of serving you, including expenses such as administration, operations, and maintenance. However, the majority of revenue needed to cover your Cooperative’s distribution costs comes from your bill’s kilowatt hour charge.
Your kilowatt hour charge is made up of three parts — energy (kilowatt hour), demand (kilowatt), and distribution system expenses — which are shown proportionally in the graph below.
Most Member-Owners cannot afford a significant increase in their electric bills. According to the Associated Electric Cooperative’s 2016 Triennial Survey, 15 percent of Member-Owners have average annual household incomes that are less than $25,000, and 58 percent have household incomes that are less than $75,000.
Across all income levels, Member-Owners rank affordability as the most important factor for your Cooperative to consider, and 79 percent of Member-Owners are not willing to pay more for their electricity to help subsidize their neighbors who want to install small scale renewables.
Since the 1930’s, Missouri’s Electric Cooperatives have delivered safe, affordable, and reliable electricity with the principle that all Member-Owners should be treated fairly and should evenly contribute to the fixed costs that keep the electric grid operating.
Special interest groups want to change Missouri net metering law, unfairly shifting costs from the select few Missouri Electric Cooperative Member-Owners who have solar panels on their homes to you: the majority of Member-Owners who do not.
Our perspective is simple: that all Member-Owners are continuously connected to the grid, so all Member-Owners should pay evenly to maintain it. Special interest groups, however, have other ideas.
In the 2016 legislative session, special interest groups filed legislation and tried to use an initiative petition to obtain their unfair agenda. Missouri’s Electric Cooperatives and other utilities helped stop those special interest groups in 2016, but we know that they will soon be back to attempt these changes again.
That’s why we want to educate you on net metering and our “Fairness Down the Lines” campaign. Please take some time to watch the net metering video and to go through the facts below. Your involvement is vital to our success. If you’d like to stay up to date, send a message to the email address below.