After facing backlash from energy companies as well as Southern District Commissioner Dane Maxwell, the Mississippi Public Service Commission (PSC) has agreed to a new, scaled-down net metering rule.
In a recent interview on MidDays with Gerard Gibert, Central District Commissioner Brent Bailey explained how net metering works and the process Mississippi uses to compensate those who utilize renewable energy sources and push energy back into the grid.
“Net metering, in the true definition, would be for any excess generation that a residence or business provides back to the grid would be compensated at the retail rate. So whatever you buy from the utilities, you get compensated for the same amount,” Bailey said. “In Mississippi, we have not done that and still don’t do that. We do what’s called avoided cost, which is basically the wholesale cost of electricity minus all the other fees, charges, administration, fuel costs, all that kind of stuff. We allow for a value-distributed generation. So, that’s all these other savings that are built in when residents or small businesses self-generate power and push it across the grid.”
With this system already in place, the new self-generation rule was implemented to motivate individuals and small businesses to invest in a renewable source that will distribute power across the grid. Amongst those eager for an increased incentive for solar energy are Mississippi schools. When asked why it is the job of the PSC to be in the business of compensating people for producing self-generated entergy, Bailey said the agency has an obligation to ensure that efficient energy is produced for Mississippians.
“Utilities, I believe, by state law, say they must not only deliver reliable and affordable, but also efficient energy as well. These are means that are helping us accomplish our statutory mandates as well. We try to help empower consumers as much as possible in doing this,” Bailey added.
As natural gas prices continue to rise, there have been warnings from the state level that utility bills could potentially skyrocket in the winter months. Mississippi is a state that relies heavily on natural gas and the PSC is looking to use this new rule to help alleviate the potential financial burden that increased costs for utilities can cause residents to face.
“Across the energy generation field in the state, nearly 80 percent of every electron generated in Mississippi is derived from natural gas as the generation fuel source. You see what the markets have done over the past couple of years — a nearly 400 percent increase over the last two years,” Bailey continued. “By allowing schools, businesses, residents, and others help offset these increasing costs by investing in self-generation resources, beginning to build a new market that hasn’t existed for the most part in Mississippi, but has flourished in other areas, create jobs, bring innovation and new technologies here, and begin to empower customers who, in most cases, are beholden to individual monopoly utilities — this is just one incremental step to helping us accomplish that.”
According to Bailey, compensation for self-generated power will come from ratepayers of investor-owned utilities. Since the program is voluntary, ratepayers will only see an increase in utility bills if individuals or businesses are approved to build renewable energy sources.
Watch the full interview with Bailey below.