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PUC Adopts Net Metering Rules to Connect Small Alternative Energy Generators to Electric Distribution System

June 22, 2006

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today adopted net metering standards which govern how small alternative electric generators – who use technologies such as solar panels or fuel cells – connect to the electric distribution system and how they are compensated for generation they provide into the electric utility distribution system.

“By finalizing the net metering standards, the Commission takes another significant step toward enhancing the state’s energy and economic development future while promoting environmentally friendly electric generation,” said Commission Chairman Wendell F. Holland. “We will continue to move forward with the implementation of the Alternative Energy Portfolio Standards Act to create a better environment and economy for Pennsylvania.”

“Allowing farmers to fully participate in net metering through the use of biodigesters provides them with an important economic opportunity as well as an environmental one,” said Commissioner Bill Shane. “Our action today liberalizes the rules on biodigesters to allow places such as Brookside Dairy in Indiana County to have the opportunity to fully contribute to our electric distribution system.” 

The Commission voted 4-1 to adopt the standards. Commissioner Kim Pizzingrilli issued a statement.  Commissioner Terrance Fitzpatrick dissented and issued a statement.

On Nov. 10, 2005, the Commission introduced the proposed the net metering standards for comment. After considering the comments, the Commission voted to adopt the final rules, which fulfill the Act’s intent to remove barriers to net metering and provide appropriate treatment to customer-generators who wish to net meter.

The net metering requirements set a standard for how electric generation suppliers and electric distribution companies (EDC) meter and compensate residential or small commercial customers who generate electricity using alternative energy sources as defined in the Act.

The standards outline rules such as:

  • EDCs will reimburse customer-generators the full retail rate for each kilowatt-hour produced by the customer during a billing period.
  • At the end of the billing period, the EDC shall compensate the customer-generator if they deliver more kilowatt-hours than they used in that billing cycle.
  • The standards also provide opportunities for small businesses to combine separate meters used within a single operation.  This will primarily benefit commonly owned and operated farming operations.

The rules on net metering are designed to simplify and regulate the manner in which customer-generators work with utilities. It will result in additional options for consumer to take control of their energy requirements using environmentally-friendly energy.

The Alternative Energy Portfolio Standards Act generally requires that a certain percentage of all electric energy sold to retail customers be derived from alternative energy sources such as solar, wind, hydropower, geothermal, biomass, and demand side management resources. The law applies to both electric distribution companies and electric generation suppliers who must demonstrate their compliance on an annual basis.  The level of alternative energy required gradually increases according to a 15-year schedule. 

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition. For recent news releases, or more information about the PUC, visit our website at

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Docket No:            M-00051865, L-00050174

Contact:Press Secretary

Pennsylvania Public Utility Commission
Press Office
P.O. Box 3265, Harrisburg, PA 17105-3265
(717) 787-5722 FAX (717) 787-4193

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