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Managing the Future of the Electricity Grid: Distributed Generation and Net Metering


April 9, 2018


Webinar only

An ELI Public Webinar

“Distributed generation” describes electricity that is produced at or near the location where it is used, and can include renewable energy technologies such as solar photovoltaic panels, which currently account for over 90% of U.S. distributed generation capacity. How to compensate “grid-tied” distributed generation systems—which sell electricity to the grid when more energy is produced than consumed at the use site—is currently the subject of vigorous debate.

Advocates of the prevalent net metering approach, in which distributed generators are compensated for electricity they sell to the grid at the same rate they would pay to receive energy from the grid, argue that it is a crucial incentive for investments in renewable energy, helping to avert health- and climate-related costs of fossil fuel consumption. Critics of this approach argue that it requires utility companies to provide grid maintenance and other services without revenue from distributed generators, and to pass those costs on to utility customers who lack the ability to invest in distributed generation.

In a 2017 article appearing in the Harvard Environmental Law Review, Dr. Burcin Unel and Professor Richard L. Revesz (New York University School of Law) argue that an “Avoided Cost Plus Social Benefit” policy should be adopted for valuing distributed energy generation, whereby distributed clean energy is rewarded for its environmental and health benefits and utilities are compensated for the services they provide–until a more comprehensive retail rate reform can be achieved that ensures the efficient integration of all types of distributed energy resources into the grid.

ELI, co-author Burcin Unel, and commenters from the private sector, government, and advocacy groups discussed this proposal.

Linda K. Breggin, Senior Attorney, Environmental Law Institute

Burcin Unel, Ph.D, Energy Policy Director, The Institute for Policy Integrity at New York University School of Law, Co-Author
Ellen Anderson, former Chair of the Minnesota Public Utilities Commission
Bradley Campbell, President, Conservation Law Foundation
Adam Benshoff, Deputy General Counsel for Regulatory Affairs, Edison Electric Institute

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