The Impact of Shorter Netting

Deck: 

Increased Uncertainty for Consumers

Fortnightly Magazine - January 2018
This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.

Several states — such as Nevada, Arizona and Utah — recently replaced their net metering policies with a construct called net billing. The customer pays the normal retail rate for any net imports, and is credited at a second rate for any net exports.

While much of the debate centered on the value of this export rate — is it at, above, or below retail? — the new policies also changed a second, less obvious aspect of net metering: the ‘netting period’ over which net exports or imports are determined.

The ‘net’ in net metering and net billing indicates that a customer is only charged on the difference between their total imports and exports for a period of time. For example: I import ten, I export seven, and I’m charged for three. The ‘netting period’ simply defines when this subtraction occurs.

For net metering, the imports and exports are traditionally netted at the end of each month. For the new net billing arrangements, however, utilities have proposed reconciling the two at much shorter intervals — every hour, fifteen minutes, or even instantly.

This full article is only accessible by current license holders. Please login to view the full content.
Don't have a license yet? Click here to sign up for Public Utilities Fortnightly, and gain access to the entire Fortnightly article database online.