Now for some good news. Today the Oregon Public Utility Commission (OPUC) issued an important decision giving a green light to companies seeking to own and operate solar and wind-powered distributed generation facilities. Third-party ownership of renewable distributed generation—especially solar—has really taken off in the past few years because it allows a utility customer to enjoy the benefits of on-site renewable energy, but pay the facility owner only for the electricity generated by the facility.
The company that owns and operates the facility on the customer’s premises receives a payment for the electricity generated by the project and is also eligible for certain tax credits and other incentives. (Sometimes this arrangement is called the “power purchase agreement” or “PPA” model)
The key issues before the OPUC were (i) whether a utility customer was eligible for net-metering under this arrangement and (ii) whether the third-party owner of the solar facility was subject to regulation by the Commission, either as an Energy Service Supplier (ESS) or as a “public utility” under state law.
In its Order, the Commission concluded that utility customers were still eligible for net metering service even if the net-metered facility was owned by (or leased from) a third party.
On the question of whether the third–party owner of a net-metering facility was required to register as an ESS under Oregon’s direct access law, the Commission ruled that a third-party owner was not an ESS. The Commission reasoned that the facility owner was not using the utility’s distribution system and was thus not providing electricity services under “direct access.” This ruling was important to renewable energy providers because at least one existing utility direct access tariff requires an ESS to supply 100 percent of a customer’s load.
As to the question of whether the third-party owner was a “public utility” under state law, the Commission clarified that a third-party owner of a wind or solar-powered net metering facility is not a “public utility.” However, the Commission noted that “[w]ithout a change in the existing legislation” (hint, hint) a net-metered facility that generates electricity from a source other than solar or wind would likely be deemed a “public utility.” Finally, the Commission ruled that the owner of the net-metering facility is entitled to the renewable energy credits (RECs) associated with the output of the facility.
You can link to the decision here: