III. Net Generation Output Metering (NGOM)

The CEC's report assesses whether and under what circumstances utility tariffs should require a DG facility to install NGOM. NGOM permits the utilities to monitor the energy output of a DG facility. Currently, NGOM is required by the utilities' Rule 21 for certain purposes and in cases where "less intrusive and/or more cost-effective options for providing the necessary DG Facility output data are not available." NGOM is required currently for those DG facilities receiving incentives under the Self-Generation Incentive Program (SGIP) for project evaluations, those cogenerators receiving special gas rates to determine the amount of gas qualifying for the discounts, and facilities receiving standby charge exemptions to evaluate operating efficiencies.

The utilities have advocated for NGOM at all new DG facilities and assert that those meters should be "revenue quality," whether owned by the utility or the customer. From the utilities' perspective, the purpose of the NGOM would be to provide accurate information for billing a DG customer for certain charges that are normally assessed on the basis of demand or departed load, such as standby charges, cost recovery surcharges or other nonbypassable charges. PG&E observes that meters may be required in the future for assessing renewable production (green energy tags or renewable portfolio standard compliance). DG parties generally believe NGOM should only be required when the customer receives publicly-funded incentives or tariff exemptions.

The CEC agrees that NGOM is required when the customer receives publicly-funded incentive payments and/or specific tariff exemptions, other than NEM customers. Otherwise, the CEC does not believe that NGOM is required. The current Rule 21 explicitly states that utilities shall only require NGOM to administer a tariff "to the extent that less intrusive and/or more cost effective options for providing the necessary Generating Facility output data are not available." The CEC endorses the Commission's existing policy³ of permitting estimated load for purposes of calculating the Cost Responsibility Surcharge (CRS).⁴ While the CEC shares the utilities' concern that the estimated billing data may not be as accurate as metered data, and could result in customer billing disputes, the CEC believes a customer's right to confidentiality is more important in this case. If the frequency of billing disputes increases substantially, the CEC states it will revisit this issue. We presume that the CEC will work with Commission staff to monitor the number and nature of the DG complaints we receive. The CEC also advises that in situations where NGOM is required, utility-grade meters are not needed as long as installed meters are acceptable and conform to the requirements set forth in Rule 22.

The CEC recommends the Rule 21 Working Group develop tariffs to implement these recommendations. The utilities would then submit tariff changes by advice letters.

The utilities reply to the CEC's recommendation by questioning whether privacy is a significant issue in this context, especially since the metered information is used for billing as it is for any customer. PG&E argues that large DG facilities should be required to have meters in order to assure system reliability and consistency with Independent System Operator (ISO) tariffs.

We adopt the recommendations of the CEC with regard to NGOM and herein direct the utilities to submit tariff modifications following consultation with the Rule 21 Working Group. We note that metering requirements for projects receiving subsidies and incentive payments are governed by Section F of Rule 21. Our decision today does not affect current SGIP rules. Likewise, the requirement for NGOM metering to receive gas discounts is governed by gas tariffs rather than Rule 21 and is not affected by our decision today. The provision that exempts a DG from installing a NGOM meter "when less intrusive methods or cost-effective means of providing data are available" is already included in Rule 21. We clarify, as PG&E requests, that any DG under the DL-CRS tariff may install a meter if it objects to estimated metering information. We also presume that the rules we develop here do not preempt those in ISO tariffs or otherwise adopted by the Federal Energy Regulatory Commission (FERC) for projects that might affect system reliability. At this point, the matter does not appear to involve the ISO since the utilities schedule DG power. We recognize, however, the utilities' responsibility to manage load and deliveries to the ISO can be complicated in cases where energy resources are not metered. We may address this issue at a future date if lack of metering creates reliability problems for the utilities.

We address in a subsequent section whether meters are required for combined technology DGs.