Net Metering

Summary

Eligibility and Availability

Net metering is available to all "qualifying facilities" (QFs), as defined by the federal Public Utility Regulatory Policies Act of 1978 (PURPA), which pertains to renewable energy systems and combined heat and power systems up to 80 megawatts (MW) in capacity. There is no statewide cap on the aggregate capacity of net-metered systems.

All utilities subject to Public Regulation Commission (PRC) jurisdiction must offer net metering. (Municipal utilities, which are not regulated by the PRC, are exempt.) Customers are required to be billed for service in accordance with the rate structure and monthly charges that the customer would be assigned if the customer had not interconnected a QF.

Net Excess Generation

For net-metered systems 10 kilowatts (kW) or less, the utility has a choice in how to compensate customers for net excess generation (NEG). The utility may credit the customer on the next bill for the excess kilowatt-hours (kWh) generated, by either:

• Crediting or paying the customer for the NEG supplied to the utility at the utility's energy rate (i.e., avoided cost rate); or,
• Crediting the customer for the kWh of NEG supplied to the utility. Unused credits are carried forward from month-to-month, provided that if a utility opts to credit customers and the customer leaves the system, the customer's unused credits for excess kWh generated are paid to the customer at the utility's energy rate. 

Utility-specific information on net metering can be found at the following websites:

• PNM Resources (Public Service Company of NM) - Rider No. 24
• Xcel Energy (Southwestern Public Service Company) - Tariff No. 3018.33 
• El Paso Electric Company - Rate No. 16

For all other net-metered systems up to 80 MW, the NEG delivered from the QF to the utility is purchased by the utility at the utility's applicable time-of-use or single period energy rate. If a customer has NEG totaling less than $50 during a monthly billing period, the excess is carried over to the customer’s next monthly bill. If NEG exceeds $50 during a monthly billing period, the utility will pay the customer the following month for the excess.

The energy rate to be paid for the energy supplied by the QF in any month shall be the respective month's rate from the utility's current schedule on file with the PRC. Each utility shall file with the PRC its schedule containing monthly energy rates that will be applicable to the next twelve-month period. Each month's energy rate contained in the schedule is the average of the economy energy purchases by the utility for the corresponding month of the immediately preceding 12-month period. The energy rate contained in the schedules is required to include the savings attributable to the avoidance of losses due to transmission, distribution, and transformation as applicable for different voltage levels of interconnection. 

Utilities with retail time-of-use rates on file with the PRC must file schedules reflecting monthly energy rates calculated for peak periods only and off-peak periods only which shall be applied to QFs whose generation is limited to peak periods only or off-peak periods only. 

Interconnection

The PRC adopted revised interconnection standards for customer-sited generators in July 2008.

If provision of the net metering option requires metering equipment and related facilities that are more costly than would otherwise be necessary absent the requirement for net metering, the QF must pay all incremental costs associated with installing the more costly metering equipment and facilities.

The QF must give the utility at least 60 days written advance notice to interconnect, and the utility must specify within 15 days the reason(s) why it cannot interconnect as requested if it is unable to do so. Within 10 days of receiving notification of the intent to interconnect from a customer with a QF 10 kW or less in size, the utility must notify the customer of any metering costs.