Net Metering

The Consumers Energy Net Metering Program offers Consumers Energy electric residential and business customers the opportunity to support renewable energy. It enables customers who generate electricity using renewable energy sources to connect to the electric utility grid and to send electricity back to the grid at times when their generation exceeds their own use. The customer receives a credit for the “net excess generation” and may use these credits to offset their use of electricity supplied by the utility. View the  Net Metering brochure .

The program has three categories:

  • 20 kilowatts (kW) and less - Category 1
  • 20-150 kW - Category 2
  • 150-550 kW - Category 3

The following topics also provide more details about the Net Metering Program and customer participation:

 

Availability
Terms and Definitions
Customer Eligibility
Generator Requirements
Metering Requirements
Application Information
Program Termination
 Customer Billing and Net Excess Generation
 Renewable Energy Credits
 Generator Interconnection Requirements
 Frequently Asked Questions
 Michigan Public Service Commission
 Net Metering brochure  

 

Net Metering Program Availability 

The Net Metering Program is voluntary and is available on a first come, first served basis until the nameplate capacity (kilowatts or kW) of all participating generators is equal to the maximum program limit. That limit is 1.0 percent of Consumers Energy’s peak demand for full-service customers during the previous calendar year. Here is the breakdown:

  • 0.50 percent is reserved for Category 1 Net Metering customers
  • 0.25 percent is reserved for Category 2 Net Metering customers
  • 0.25 percent is reserved for Category 3 Net Metering customers

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Terms and Definitions 

Category 1 – Eligible electric generator(s) with aggregate generation of 20 kW or less that use equipment certified by a nationally recognized testing laboratory to IEEE 1547.1 testing standards and in compliance with UL 1741 scope 1.1A.

Category 2 – Eligible electric generator(s) with aggregate generation greater than 20 kW and not more than 150 kW.

Category 3 – Methane digester(s) with aggregate generation greater than 150 kW but not more than 550 kW.

Eligible Electric Generator – A renewable energy system or a methane digester with a generation capacity limited to the customer's electric need and that does not exceed the following:

  1. For a renewable energy system, 150 kW of aggregate generation at a single site
  2. For a methane digester, 550 kW of aggregate generation at a single site

Full Retail Rate – The power supply and distribution components of the cost of electric service. Full retail rate does not include surcharges, the system access charge or other charges assessed on a per meter basis.

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Imputed Customer Usage – Calculated as the sum of the metered on-site generation and the net of the bidirectional flow of power across the customer interconnection during the billing period.

Modified Net Metering – A billing method, as defined by Michigan statute, that applies the power supply energy component of the customer's applicable tariff rate to the net measurement of the bidirectional flow of kilowatt-hours (kWh) across the customer interconnection with Consumers Energy’s distribution system during a billing period or time-of-use period. Category 2 and Category 3 customers qualify for modified net metering.

Net Customer Consumption – When a positive value is the result of subtracting metered outflow from the customer from metered inflow supplied by Consumers Energy. The customer has consumed electricity in excess of what is generated on premises and returned to Consumers Energy.

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Net Excess Generation – When a negative value is the result of subtracting metered outflow from the customer from metered inflow supplied by Consumers Energy. The customer has generated and returned more electricity to Consumers Energy than the amount of electricity supplied by Consumers Energy to the customer's premises.

Renewable Energy Resource – A resource that naturally replenishes and is ultimately derived from solar power, water power or wind power. Renewable energy resources do not include petroleum, nuclear, natural gas or coal. A renewable energy resource comes from the sun or from thermal inertia of the Earth and minimizes the output of toxic material in the conversion of the energy and includes, but is not limited to, all of the following:

  1. Biomass
  2. Solar and solar thermal energy
  3. Wind energy

True Net Metering – A billing method, as defined by Michigan statute, that applies the full retail rate to the net measurement of the bidirectional flow of kWh across the customer interconnection with Consumers Energy’s distribution system during a billing period or time-of-use period. Category 1 customers with a system capable of generating 20 kW or less qualify for true net metering.

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Customer Eligibility 

To participate in the Net Metering Program, customers must generate a portion or all of their own electricity requirements with an eligible electric generator, which utilizes a renewable energy resource.

In order to participate, a customer must meet current payment terms of any pre-existing contracts or tariffs with Consumers Energy, including those imposed by participation in the Net Metering Program, or those required by the interconnection of the customer's eligible electric generator to the Consumers Energy distribution system.

Eligible customers will be placed into the appropriate Net Metering category based on the aggregate nameplate capacity of the eligible electric generator(s) located on the customer's premises.

  • A Category 1 Net Metering customer has one or more eligible electric generators with an aggregate nameplate capacity of 20 kW or less that use equipment certified by a nationally recognized testing laboratory to IEEE 1547.1 testing standards and is in compliance with UL 1741 scope 1.1A located on the customer's premises and metered at a single point of contact.
  • A Category 2 Net Metering customer has one or more eligible electric generators with an aggregate nameplate capacity greater than 20 kW but not more than 150 kW located on the customer's premises and metered at a single point of contact.
  • A Category 3 Net Metering customer has one or more methane digesters with an aggregate nameplate capacity greater than 150 kW but not more than 550 kW located on the customer's premises and metered at a single point of contact.

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Generator Requirements 

The eligible electric generator(s) must be located on the customer's premises, serving only the customer's premises and must be intended primarily to offset a portion or all of the customer's requirement for electricity.

The customer's requirement for electricity shall be determined by one of the following methods:

  1. The customer's annual energy usage, measured in kWh, during the previous 12 month period
  2. When metered demand is available, the maximum integrated hourly demand measured in kW during the previous 12-month period
  3. In instances where complete and correct data is not available, or where the customer is making changes on-site that will affect total usage, Consumers Energy and the customer shall mutually agree on a method to determine the customer's electric requirement for electricity

The aggregate capacity of eligible electric generators shall be determined by one of the following methods:

  1. Aggregate nameplate capacity of the generator(s)
  2. Aggregate projected annual kWh output of the generator(s)

When completing the company's Net Metering application, the customer must provide Consumers Energy with a capacity rating in kW of the generating unit and a projected monthly and annual kilowatt-hour output of the generating unit.

The customer does not need to be the owner or operator of the eligible generation equipment, but is ultimately responsible for ensuring compliance with all technical, engineering and operational requirements suitable for the Consumers Energy distribution system.

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Generator Interconnection Requirements 

The requirements for interconnecting a generator with the company's facilities are contained in Rule B8., Electric Interconnection and Net Metering Standards, the Michigan Electric Utility Generator Interconnection Requirements and the company's Generator Interconnection Supplement to Michigan Electric Utility Generator Interconnection Requirements.

All such interconnection requirements must be met prior to the effective date of a customer's participation in the Net Metering Program. The customer must sign an Interconnection and Parallel Operating Agreement with the company and fulfill all requirements as specified in the agreement.

A customer with a system capable of generating more than 20 kW shall pay actual interconnection costs associated with participating in the Net Metering Program, subject to limits established by the Michigan Public Service Commission.

Links to the interconnection information and requirements are shown below:

 The Interconnection Process brochure , is an overview of the interconnection process, roles and responsibilities.

See the Michigan Electric Utility Generator Interconnection Requirements for interconnection process details and to complete and submit the required information.

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Metering Requirements 

Metering requirements shall be specified by Consumers Energy, as detailed below.

All metering, including the generator meter where applicable, must be capable of recording all parameters metered on the customer's otherwise applicable tariff rate.  More information about metering at Consumers Energy .

Category 1 Metering Requirements

Consumers Energy will use a meter capable of measuring the flow of energy in both directions. At Consumers Energy’s option, either the customer’s existing meter will be used or a single meter with separate registers capable of measuring power flow in each direction will be installed. If the existing meter is used, the company will test and calibrate the meter to ensure accuracy in both directions. If a meter is installed, Consumers Energy will provide the metering equipment without cost to the customer for Category 1 projects. The customer may purchase a meter from the company to measure the generator’s output. The customer will be responsible for installation and maintenance of the generator meter, if purchased. Consumers Energy has no obligation to read the generator meter.

Category 2 Metering Requirements

Consumers Energy will use a meter or meters capable of measuring the flow of energy in both directions and separately will meter the generator output. If meter upgrades are necessary to provide such functionality, Consumers Energy will provide metering equipment without cost to the customer.

Category 3 Metering Requirements

Consumers Energy will use a meter or meters capable of measuring the flow of energy in both directions and separately will meter the generator output. If meter upgrades are necessary to provide such functionality, the customer shall pay the costs incurred. Metering costs must be paid in full prior to participation in the Net Metering Program.

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Customer Billing and Net Excess Generation Credit 

Category 1 Customers

  1. The customer will be billed at the full retail rate, plus the monthly system access charge, plus any applicable surcharges, securitization charges, securitization tax charges and power supply cost recovery factor on net customer consumption for the billing month.
  2. The customer will be credited at the full retail rate on net excess generation for the billing month. The credit shall appear on the bill for the following billing period and shall be used to offset utility charges on that bill. Any excess credit not used to offset utility charges will be carried forward to subsequent billing periods. Net excess generation credit is non-transferrable. In months when the customer has zero net customer consumption or net excess generation, all applicable meter based charges, and surcharges will be billed on the metered inflow supplied by the company to the customer.

Category 2 Customers

  1. The customer will be billed for power supply energy components, including power supply recovery factor, on net customer consumption. The customer will be billed for distribution components including the monthly system access charge, plus any applicable surcharges, securitization charges and securitization tax charges on metered inflow supplied by the company to the customer. General service secondary demand rate (GSD) and general service primary demand rate (GPD) customers will be billed for demand based capacity charges as stated on their applicable rate schedule.
  2. The customer will be credited for power supply energy components on net excess generation. The credit shall appear on the bill for the following billing period and shall be used to offset power supply charges on that bill. Net excess generation credit exceeding power supply charges shall be carried forward and applied to power supply charges in subsequent billing periods. Net excess generation credit is non-transferrable.

Category 3 Customers

  1. Customers on general service secondary rate (GS) or general service primary rate (GP)
    1. The customer will be billed for power supply energy components, including power supply cost recovery factor, on net customer consumption. The customer will be billed for surcharges, securitization charges and securitization tax charges on the metered inflow supplied by the company to the customer. The customer will be billed for distribution components on imputed customer usage along with the fixed monthly system access charge.
    2. The customer will be credited for power supply energy components on net excess generation. The credit shall appear on the bill for the following billing period and shall be used to offset total power supply charges on that bill. Net excess generation credit exceeding total power supply charges will be carried forward and applied to power supply charges in subsequent billing periods. Net excess generation credit is non-transferrable.
  2. Customers on general service secondary demand rate (GSD) or general service primary demand rate (GPD)
    1. The customer will be billed for power supply components, including power supply cost recovery factor, on net customer consumption. The customer will be billed for surcharges, securitization charges and securitization tax charges on the metered inflow supplied by the company to the customer. The customer will be billed for distribution components on imputed customer usage along with the fixed monthly system access charge. General service secondary demand rate (GSD) and general service primary demand rate (GPD) customers will be billed for demand based capacity charges as stated on the applicable rate schedule.
    2. The customer will be credited for power supply energy components on net excess generation. The credit shall appear on the bill for the following billing period and shall be used to offset total power supply charges on that bill. Net excess generation credit exceeding total power supply charges will be carried forward and applied to power supply charges in subsequent billing periods. Net excess generation credit is non-transferrable.

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Application for Service 


To initiate a request to participate in Consumers Energy’s Net Metering Program, a customer shall submit a completed interconnection application, including an application fee of $75 and a completed Net Metering Program application, including an application fee of $25 to the company. The Net Metering Program application fee is refundable if the customer withdraws the application prior to commencing service under the Net Metering Program.

Interconnection Applications, Net Metering Applications and Parallel Operating Agreements are shown below:

Category 1
 Combined Interconnection and Net Metering Application 20 kW and Less  
 Generator Interconnection Application 
 Net Metering Application 
 Interconnection and Parallel Operating Agreement 

Category 2
 Interconnection Application 
 Parallel Operating Agreement 
 Net Metering Application 
 Combination Application for Interconnection and Net Metering 

Category 3
 Interconnection Application 
 Net Metering Application 
 Combination Application for Interconnection and Net Metering 

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Program Termination 

Customer Termination from the Net Metering Program

A participating customer may terminate participation in Consumers Energy's Net Metering Program at any time for any reason on 60 days' notice. In the event the Net Metering customer terminates participation prior to the company's recovery of costs associated with any Net Metering service provided to the customer, the customer shall pay the company for all such costs. In the event that a customer who terminates participation in the Net Metering Program wishes to re-enroll, that customer must reapply as a new program participant subject to program size limitations, application queue and application fees. The company may terminate a customer from the Net Metering Program for the following reasons:

  • If the customer fails to maintain the eligibility requirements,
  • If the customer fails to comply with the terms of the Interconnection and Parallel Operating Agreement,
  • If the customer's facilities are determined unsafe,
  • If the customer fails to maintain compliance with the technical, engineering, or operational requirements suitable for the company's distribution system.

Upon customer termination from the Net Metering Program, any existing credit on the customer's account will either be applied to the customer's final bill or refunded to the customer. The company will refund to the customer any remaining credit amount in excess of the final bill amount. Net excess generation credit is non-transferrable.

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Company Termination of the Net Metering Program
Company termination of the Net Metering Program may occur upon receipt of MPSC order. Upon company termination of the Net Metering Program, any existing credit on the customer's account will either be applied to the customer’s final bill or refunded to the customer. The company will refund to the customer any remaining credit amount in excess of the final bill amount. Net excess generation credit is non-transferrable.

Renewable Energy Credits 

Renewable energy credits (RECs) are owned by the customer. The company may purchase renewable energy credits from participating Net Metering customers who are willing to sell RECs generated if the customer has a generator meter in place to accurately measure and verify generator output. REC certification costs are the responsibility of the customer. The company will enter into a separate agreement with the customer for the purchase of any RECs.

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