Net Metering

Nebraska Governor Dave Heineman signing the state's "net metering" law

In May 2009, Nebraska became the 43rd state with a “net metering” law when Governor Dave Heineman signed LB 436 in May 2009 after the measure received strong support in the Unicameral.

The “net metering” law allows residential and small-business customers to set up renewable electricity generators on their property, self-generate a portion of the electricity they need, and receive a credit of their utility bill for any excess electricity they are able to put onto the grid.

The measure was adopted to encourage customer-owned renewable electricity resources like wind, solar, biomass, hydropower, methane, and geothermal. The credit that a utility provides for customer-generated renewable electricity is the same as that utility’s avoided cost—in other words, exactly what it would cost a utility to generate that electricity or purchase it from another utility.

As of March 2011, 83 Nebraskans had installed a total of 1.5 megawatts of renewable electric generation on their property and interconnected it with their local utility pursuant to LB 436. These installations generated 407,402 kilowatt-hours (kWh) of electricity in less than two years (May 2009-March 2011). Of that sum, customers put 83,618 kWh of electricity back onto the grid, for use by other customers. We expect those numbers will keep rising in the coming years.

Advanced meters, like the one shown, can track electricity generated by customers and sold back to utilities

Customer-owned renewable electric generation is in the public interest. It is an important element in diversifying the state’s electric resources and economy, according to LB 436. Utilities install a “net meter” on the customer’s premises for free, and the law prohibits utilities from charging self-generating customers any additional fees or charges.

The net metering credits help customers offset some of the cost of installing onsite renewable electricity generation. Customers typically don’t install this equipment to make money. Rather, they want to reduce their environmental footprint by increasing their use of electricity generated without sulfur dioxide, nitrogen oxide, or carbon dioxide emissions. But the net metering payments could shorten the payback period of that customer-owned generation by up to several years.

The net metering law also contains important safety-related interconnection guidelines to make sure customers and utility employees are not injured, and electrical equipment is not damaged, by the operation of customer-owned electric generation.