Warren Buffett’s Energy Company Says Net Metering Should Be ‘Eliminated’

by Stephen Lacey Originally appearing in GreenTech Media Berkshire Hathaway Energy, the holding company owned by famed investor Warren Buffett, is weighing in on the debate over how to compensate distributed generation. In a strategy document written by SVP Brent Gale for a legal conference in July, Berkshire Hathaway Energy outlined its position on net metering, saying it should be scrapped in favor of a system that recognizes utility fixed-grid costs and utilizes distributed generation at times when it's needed most. "Maintaining the status quo and allowing DG customers to continue to be served by residential rates that do not reflect the costs of serving DG customers and which shift costs to other customers is arguably the situation that would be deemed unreasonably discriminatory," wrote Gale in the document. Berkshire Hathaway owns a number of regulated utilities, including NV Energy and PacifiCorp. NV Energy and Rocky Mountain Power, a power company run by PacifiCorp in Utah, are both lobbying to make changes to net metering and add fixed charges to the bills of customers getting credited for their solar power. NV Energy CEO Michael Yackira previously told Greentech Media that PV gets a "free ride" through net metering policies that don't charge solar customers for using the grid as backup. Solar advocates fighting changes to net metering dispute those claims, saying solar provides a net benefit to the grid by reducing the need to invest in expensive peaking plants. They also criticize utilities like Rocky Mountain Power with very low rates of solar penetration that are attempting to kill competition. "Only about .3 percent of Berkshire Hathaway utility customers in Utah use solar net metering. But even that reduction in market share appears too threatening to Berkshire Hathaway," said Will Craven, a spokesperson for the Alliance for Solar Choice (TASC), a solar industry advocacy group. They also point to a July study that showed net metering was not passing on costs to other ratepayers in Nevada. Berkshire Hathaway doesn't say it's against distributed generation. In the document, Gale wrote that it "has the potential to benefit the grid." Instead, the company believes an entirely new system should be created for solar that recognizes the value of the grid and doesn't shift costs to other customers. Gale proposed a new rate system for customers hosting distributed energy systems that includes a fixed monthly charge and a demand charge that will "avoid ramping up of purchases on the grid as DG production wanes." "The value of DG deliveries to the grid is not a function of the utility's bundled rate for generation, transmission and distribution services, which is the presumption inherent in NEM," wrote Gale. That argument echoes the view of the Edison Electric Institute, which has undertaken a campaign to change net metering policies around the country. Berkshire Hathaway has invested $15 billion in utility-scale renewable energy projects through its subsidiaries over the years. In July, Warren Buffett said he was prepared to double that number , telling the crowd at a utility conference that he's going to "keep doing that as far as the eye can see." The company has invested heavily in transmission in order to connect all those projects to the grid. In May, Berkshire Hathaway acquired transmission developer AltaLink to expand its reach. MidAmerican Transmission and its subsidiaries operate 1,021 miles of electrical lines around the country. Buffett has received a lot of praise for his strong backing of wind, solar, geothermal and hydropower. But rooftop solar advocates say those investments set Berkshire Hathaway's interests firmly against distributed generation. "That gives them financial incentives to oppose DG, regardless of what their ratepayers may want," said TASC's Craven. All over the country, utilities, policymakers, regulators and solar advocates are sparring over whether to charge solar customers more for using the grid. In most states, utility commissions or legislatures have chosen to study the value of solar on the grid, rather than make an immediate decision to change net metering. Recently, Massachusetts considered implementing a minimum bill policy to account for utility fixed costs without completely killing the economics of solar. Minnesota took a more comprehensive approach and created an optional "value-of-solar" methodology for distributed systems that accounts for the technology's environmental benefit and ability to offset power plant investments.

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Warren Buffett’s Energy Company Says Net Metering Should Be ‘Eliminated’

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