Rate Design and Subsidies
Ahmad Faruqui is a principal with The Brattle Group. He has worked for more than 140 clients on five continents and authored more than a hundred articles, papers, and books on energy economics. His views, expressed in this interview, are entirely his own, and are not necessarily those of his clients or his employer.
A vigorous debate continues over net energy metering, NEM, in frontline states such as Arizona, California, Hawaii, Idaho, Kansas, Massachusetts, Michigan, New York, and Nevada. The debate is being watched with great interest in other states.
The NEM debate is unlike any other conversations in the regulatory arena. It transcends the regulatory boundaries in more ways than one. It embodies a full-throttled argument under oath between divergent experts who are cross-examined by the opposing attorneys.
The typical NEM battle is a set-piece encounter in the commission hearing room. It often gets played out in the public arena. The debate often spills over to the press, to the legislatures - they can pass laws providing rebates to customers who install photovoltaic panels, PVs, and sometimes involves the governor, as happened in Nevada. Ultimately, the issue also involves the U.S. Congress, and it was a topic of conversation in the last presidential election during the Democratic primaries.
To succinctly summarize the policy issues being debated in rate cases and conferences across the country from one perspective, we reached out to a frequent contributor to PUF, Dr. Ahmad Faruqui. He's an economist with The Brattle Group, based in San Francisco, who has testified on NEM rate cases in Arizona, Nevada, Kansas and Idaho, and on residential rate cases generally in several states.