Net Metering

Summary

NOTE: Although this entry is categorized as net metering, the policy adopted by the Mississippi PSC does not meet DSIRE's definition of net metering, as excess generation is not netted one-to-one against consumption over the billing period. 

The Solar for Schools programs were suspended pending further investigation by the Mississippi PSC according to an order filed in early April 2024 (See Docket No. 2023-UN-16)

In December 2015, the Mississippi Public Service Commission (PSC) established a method to compensate and incentivize behind-the-meter electricity generation in the state. The rule requires all the investor-owned electric utilities* in the state to allow their customers to own or lease distributed energy resources to offset their electricity use on-site and sell excess electricity to the utilities. Even though the PSC order defines the program as net metering, the program only allows the netting of electricity use to occur on an instantaneous basis.  Any electricity exported to the grid will not be used to 'net' the customer's monthly electricity use; instead, it will be credited at the utility's wholesale avoided cost rate plus an additional 2.5 cents/kWh premium, which adds up to less than the retail rate of electricity. 

Eligibility

Any electric customer in the state, including residential, commercial, and industrial customers, is eligible to install behind-the-meter generation systems. The distributed energy system must be powered through renewable energy sources, including solar, wind, geothermal, wave or tidal, hydro, and biomass. Residential systems are limited to the lesser of 110% of the customer's annual peak demand or 20 kW and must be located on the customer’s premises. Non-residential customers can aggregate generation systems within their premises up to the lesser of 110% of the customer's annual peak demand or 2 MW.

Aggregate Cap

Systems are allowed to interconnect on a first-come, first-served basis until total systems add up to 3% of the utility’s total system peak demand recorded during its prior calendar year. Utilities must seek Commission approval before refusing additional Net Renewable Generation requests.

Excess Generation

The interconnected systems will include a bi-directional meter with two channels that can record both the excess electricity generated by the system (channel 2) and the net electricity supplied to the customer from the utility (channel 1). Channel 1 shall record the net of the total electricity produced by the system and the total customer's electricity usage in real-time. 

Electricity self-supplied by the customer will be credited at full retail rate. Any generation of the system that is not used by the customer at that particular instant will be recorded in channel 2. This excess generation will be credited at utilities’ avoided cost plus an additional “Non-Quantifiable Expected Benefits Adder” of 2.5 cents/kWh. This values the excess generation at approximately 7 to 7.5 cents/kWh. All the excess generation at the end of the billing period will be converted to a monetary credit and be carried over to subsequent billing periods indefinitely. This credit, however, cannot be applied to reduce any fixed monthly charge or minimum bill component of the electric bill. 

The “Non-quantifiable Expected Benefits Adder” of 2.5 cents/kWh is set temporarily to recognize the additional value of distributed generation on the grid. The amount of this adder may be modified in later years based on the calculation of the actual benefits of the distributed generation. 

Renewable Energy Credits

The Renewable Energy Credits (RECs) represent the environmental attributes of electricity generated by renewable energy systems. Generally, RECs remain with the customer, however, if the customer benefits from the “Non-Quantifiable Expected Benefits Adder” (DG adder) while selling their excess generation to the utility, then the RECs are transferred to the utility.

Third-Party Ownership

The Third-Party Ownership (TPO) model is allowed in the state. Under the TPO arrangement, the customer may contact a third party to build a PV solar system and agree to make monthly lease payments for the use of that system. This definition of TPO offered by the PSC only includes leases and does not include third-party sales through a power purchase agreement (PPA).

Under the PSC-approved Solar for Schools program, school districts must negotiate pricing and capacity for a solar PPA with third-party solar developers to construct, own, and operate a facility. For more information view Entergy Mississippi's SFS-1 rate and Mississippi Power's SFS rate.

Incentive for Low-Income Customers

The two largest investor-owned utilities in the state, Entergy Mississippi and Mississippi Power are required to offer an additional 2 cents/kWh adder to the first 1,000 qualifying low-income customers who wish to net meter. To be eligible for this added incentive, the customer must have a household income at or below 225% of the federal poverty level, or a similar requirement approved by the PSC. This adder will remain in place for 15 years from the date the customer begins the service.

*The PSC previously required all the electric utilities, including cooperatives in the state to provide net metering to its cooperative members. H.B. 1139, enacted in April 2016, provided that the PSC can require cooperatives to adopt net metering programs, but may not establish the level of compensation or credits for these programs. The South Mississippi Electric Power Association (SEMPA) member cooperatives may choose to adopt the state net metering law or can file their net metering and interconnection standards. These standards must be consistent with the net metering rule adopted by the state.