September 20, 2020

Volume X, Number 264

September 18, 2020

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FERC Dismisses Petition to Review Jurisdictional Challenges over Net Metering

On July 16, 2020, the Federal Energy Regulatory Commission (FERC) dismissed the New England Ratepayers Association’s (NERA) petition for a declaratory order. In its petition, NERA asked FERC to (1) declare that there is exclusive federal jurisdiction over wholesale energy sales from generation sources located on the customer side of the retail meter, and (2) order that the rates for such sales be priced in accordance with the Federal Power Act (FPA) or Public Utility Regulatory Policies Act of 1978 (PURPA), as applicable.

Rather than decide the issue on the merits, FERC dismissed NERA’s petition on procedural grounds. FERC’s standard with respect to declaratory orders is that they are issued to terminate a controversy or remove uncertainty. In this case, FERC found that the issues presented in the petition did not warrant a generic statement and thus, FERC exercised its discretion to decline to address the issues raised by NERA. FERC reasoned that NERA did not identify a specific controversy or harm that the Commission should address in a declaratory order.

NERA’s logic is this: FERC has jurisdiction over net metering, with respect to energy sales from rooftop solar facilities and other distributed generation located on the customer side of the retail meter whenever the output of such generators exceeds the customer’s demand or where the energy from such generators is designed to bypass the customer’s load. Under those circumstances, according to NERA’s petition, energy is delivered to the local utility for resale to the utility’s retail customers for compensation. Thus, according to NERA, the transactions are wholesale sales in interstate commerce, which should be priced at either the utility’s avoided cost of energy (if the sale is made pursuant to PURPA) or a just and reasonable wholesale rate (if the sale is made pursuant to the FPA).

Commissioners McNamee and Danly concurred with the majority opinion. While agreeing that the petition should be dismissed on procedural grounds, both Commissioners emphasized that the Order does not address substantive issues underlying NERA’s petition and is not a decision on the merits of the petition.

©2020 Pierce Atwood LLP. All rights reserved.National Law Review, Volume X, Number 216


About this Author

Andrew Kaplan Energy Attorney

Andrew Kaplan focuses his practice on providers of energy storage, demand response, ancillary services, and electricity and gas transmission and supply, both in the wholesale and retail markets. He regularly represents clients before the Federal Energy Regulatory Commission (FERC) and Independent System Operators/Regional Transmission Operators (NYISO, ISO-NE, PJM, Midcontinent ISO, California ISO, SPP and ERCOT), and many state public utility commissions. Andrew has won significant rulings before FERC that helped to pave the way for growth among leaders in the energy storage industry....

Ruta Skučas Energy Electric Natural Gas Attorney

Ruta Skučas counsels her clients on energy issues, focusing primarily on electric and natural gas matters, before the Federal Energy Regulatory Commission (FERC), state and federal entities, including federal courts and state public utility commissions. Her clients range from financial institutions and power marketers to traditional utilities.

Ruta's clients benefit from her years of experience working at FERC. Following graduation from law school, she served as law clerk to several FERC Administrative Law Judges (ALJs), where she assisted the ALJs in administrative litigation and settlements.  Ruta returned to FERC after 8 years of private practice. At FERC, Ruta served as Commissioner Cheryl LaFleur’s legal advisor, focusing particularly on PJM, MISO and natural gas issues.  She helped the Commissioner shape electric and natural gas policy, including on transmission planning and cost allocation through Order No. 1000.  She also worked in FERC's Office of General Counsel where she drafted orders relating to PJM, MISO, electric reliability and natural gas.  She also continued her work on Order No. 1000 in the General Counsel's office, working on the compliance filings for several regions.

Ruta assists her clients in developing and implementing strategies to comply with regulatory requirements.  She also counsels clients involved in formal and informal investigations by FERC's Office of Enforcement.

In addition to Ruta's time at FERC she also practiced energy law at White & Case LLP, with a focus on the federal regulatory aspects of project finance transactions, as well as mergers and acquisitions.

Honors & Distinctions

  • In 2015, named to the National Law Journal's inaugural list of "Energy & Environmental Trailblazers."

Professional Activities

  • Member, DC Bar Association

  • Member, Energy Bar Association

  • Board Member, Foundation of the Energy Law Journal, 2014-2016

Civic Activities

  • Member, Organizing Committee of the 2016 Lithuanian Folk Dance Festival in Baltimore, MD