Net Metering Arbitrage

A very smart colleague came up with this one while running his tractor.

Net metering faces two obstacles:  one practical and one political.  The practical problem is that not many customers do it because they need to work through rules, contractors, and arithmetic.  The political problem is that it's economically irrational:  the effective payment to the customer-generator from running the meter backwards is the full retail rate (which reflects the utility's running costs and its fixed costs), whereas the cost the utility avoids is only its running costs.  Net metering does not avoid sunk costs.  Net metering may boost renewable energy but the customer-generator is overpaid—by other ratepayers, by utility shareholders, or both. 

In capitalism, where there's inefficiency, there's arbitrage.  How about this:

Entrepreneur pays the customer-generator a fixed amount.  In return, the customer gives up her net-metering right to have her meter run backwards when she generates.  So the customer receives a normal bill based on her consumption, unadjusted by her production.  But she gets a monthly check for a fixed amount from the entrepreneur.

Now what happens?  The entrepreneur contracts with the utility.  The entrepreneur would receive from the utility a payment reflecting what the utility normally would provide the customer-generator:  a payment reflecting the retail rate times the kwhs generated by the customer.  Except they make a deal:  Instead of the utility paying that full amount (which would bring no savings to the utility compared to paying the customer), the utility pays some discounted amount.

Everyone is better off.  The customer-generator is receiving a steady amount, rather than bill credits that vary unpredictably with windiness and sunniness.  The utility (and its ratepayers and shareholders) is better off because the cost to the utility of "buying" customer generation is now lower than the full retail rate (which was over-compensation to begin with).  The entrepreneur is better off because he's made a buck arbitraging inefficiency.

As far as I can tell, no element of this transaction triggers either the Federal Power Act or traditional state utility law.  It's like what we used to call "factoring," where a third party buys the utility's receivables at a discount, giving the utility money up front and doing a better job of collecting on bad debt.  It's a transaction in money, not power. 

Factoring while tractoring:  Not a bad insight.  Any comments?