Net Metering
NorthWestern Energy Net Metering Documents
June 17, 2008
The Montana Public Service Commission (MPSC) recently approved a Tariff for Electric Net Metering of customer-owned electric generation that uses renewable resources (solar photovoltaic, wind, and small-scale hydro) as a fuel. Until its recognition by the MPSC, NorthWestern Energy's Net Metering Program was a pilot program only. The Electric Net Metering Tariff references the new Interconnection Standards for Customer-Owned, Net Metered, Grid-Connected Electric Generating Facilities of 50 Kilowatts or Less Peak Generating Capacity. Together with the new Net Meter Request Form, these documents replace the existing Net Meter Interconnection Agreement.
An electric tariff sets forth rates, terms and conditions of transmission service. In the case of Net Metering, there is currently no extra charge for either power delivered by a net meter or the basic change out of a standard meter for a net meter. The function of the documents remains to be the assurance that generating facilities meet NorthWestern Energy's safety and power quality requirements. In particular, the requirements are designed to prevent back feeding of power from the generating facility to the utility grid during power outages and to match NorthWestern Energy's own power characteristics with respect to voltage and frequency.
At this time, customers should discontinue use of the old Net Meter Interconnection Agreement and begin use of the new 
Net Meter Request Form and attached Interconnection Standards and Net Metering Tariff. If the equipment meets the terms and conditions set forth in these documents, NorthWestern Energy customers need only provide the information requested, then sign and return the one page coversheet by mail to NorthWestern Energy in order to receive a net meter. Upon receipt of the form and inspection and approval of the installation by a state or local electrical inspector, NorthWestern Energy will generate a service order for fabrication and installation of the customer's net meter.
Net Metering Background
Net metering allows homeowners to receive the full value for the electricity that their solar energy system produces. The term, net metering, refers to the method of accounting for the electricity production of a photovoltaic or wind energy system. Net metering allows homeowners with such systems to use any excess electricity they produce to offset their electric bill. As the homeowner's system produces electricity, the kilowatts are first used for any electric appliances in the home. If more electricity is produced from the system than is needed by the homeowner, the extra kilowatts are fed into the utility grid.
Under Federal law, utilities must allow independent power producers to interconnect with the utility grid and purchase any excess electricity they generate. Many states, including Montana, have gone beyond the minimum requirements of the Federal law by allowing net metering for customers with PV or wind energy systems. Under net metering, the electric meter of the customer will run backwards when their solar electric system is producing more energy than they need to operate their home at that time. The excess electricity produced is fed into the utility grid and sold to the utility at the retail rate.
At the end of the month, if the customer has generated more electricity than that used, the utility credits the net kilowatt-hours produced at the wholesale power rate. If the customer uses more electricity than they generate, they pay the difference. The billing period for net metering may be either monthly or annually.
Montana has an annual billing period. On January 1, April 1, July 1, or October 1 of each year, as designated by the customer-generator as the beginning date of a 12-month billing period, any remaining unused kilowatt-hour credit accumulated during the previous 12 months must be granted to the electricity supplier, without any compensation to the customer-generator.
Net metering allows homeowners who are not home when their systems are producing electricity to still receive the full value of that electricity without having to install a battery storage system. The power grid acts as the customer's battery backup, which saves the customer the added expense of purchasing and maintaining a battery system.
Generally, the preferred method of accounting for the electricity under net metering is with a single, reversible meter. An alternative is dual metering, in which customers or their utility purchase and install two non-reversing meters that measure electrical flow in each direction. This adds significant expense to installing a PV system. The current trend around the country is toward a single, reversible meter.
Some utilities are opposed to net metering because they believe it may have negative financial impacts on them. However, a number of studies have shown that net metering can benefit utilities. The benefits include reduced meter hardware and interconnection costs, as well as reduced meter reading and billing costs. Grid-connected PV systems can also help them to avoid the need for additional power generation, may increase the reliability and quality of electricity in the grid, and produce power at peak, when utility generation costs are higher and they often need the extra power.
Renewable Northwest Project has published a Net Metering Q&A with specific information about Montana and answers to commonly asked questions about how net metering works and how it can help you save money on your electricity bill.
