The PSC to determine fate of rooftop solar in KY

After a four year fight to determine the future of rooftop solar in Kentucky we are nearing a final decision. The fate of the fledgling solar industry now lies in the hands of the Public Service Commission.

In 2017 the state legislature, backed by utility lobbyists, introduced a bill that would devalue solar net-metering and deliver a devastating blow to the growing solar industry. What they didn’t expect was the major outrage they would receive from solar advocates all across the state. The bill was ultimately pulled from committee by the chair of the Senate Natural Resources committee, never even receiving a hearing.

“What we are seeing in Kentucky is part of a nation-wide effort by large, often foreign owned monopoly utilities. They are making it harder for individuals and businesses to have the choice to produce their own clean energy.” said Chris Zitelli, a partner at Solar by Ecos. “In states where the solar market is still developing, we are perceived as easy targets. We are seeing extraordinary time and money being spent on toppling the small solar market. Meanwhile, they are busy building their own large-scale solar installations. Electric utilities want to hold their monopoly on energy and destroy the individual’s freedom to produce clean energy.”

But that wasn’t the end of the efforts to roll back solar net-metering. Another bill was introduced in 2018 and again solar advocates and industry representatives put up a fight and the bill was defeated again. Making yet another appearance in 2019, a bill was ultimately passed, in the last hours of the general assembly.

SB 100 was much less harmful than the original legislation introduced in 2017 with the solar industry winning several concessions including a grandfather clause for previously net metered customers. SB100 gave the Public Service Commission the role of determining the value of solar net-metering.

“I don’t understand why power companies aren’t leading the way with clean energy in the first place, let alone raising their rates and de-incentivizing customers that want to switch to solar. I know I am not alone in this and that is why the Public Service Commission needs to listen to what Kentuckians want.” Said Shawna McCown, a resident of Boyd County and member of Kentuckians for the Commonwealth. “When a business is a monopoly then it is the duty of the regulatory agency to ensure they can continue to provide the service, while protecting the customers that pay for their product. That is why it is so important that the PSC hears from us in this process.”

In late 2019 the PSC opened up an administrative process to hear from the public, utilities and solar industry prior to the first net metering case, and over 50 people spoke in favor of keeping net metering intact and the value of solar to the grid. Outside of utility industry representatives, only the Chamber of Commerce opposed keeping net metering intact, despite the fact that many small businesses benefit from rooftop solar. On top of the oral comments several hundred written comments were also submitted. Public comment resulted in the PSC agreeing to hire a net-metering consultant and to include both potential costs of distributed generation as well as benefits.

“As a new solar installer I have had inquiries from dozens of small businesses and homeowners across Eastern Kentucky who are looking to use grid-tied solar to offset their electric costs.  For many projects we are able to have them saving money from day one with zero down payment. If our Public Service Commission allows these new rate changes to net metered solar, those opportunities will disappear – taking my new company with them.” Said Ben Tatum of Appalachian EnergyWorks. “Now is not the time to hamstring one of the fastest growing industries in Kentucky, while so many of us need good jobs. With so many small businesses struggling, why would we eliminate such an opportunity for savings?”

Last year Kentucky Power was the first to bring a rate case to the PSC asking for changes to their net-metering policy, followed quickly by both LG&E and Kentucky Utilities. The Utility companies argue that solar net metering should be credited at a rate consistent to the “avoided cost” rate, or the amount that they pay to purchase electricity at the wholesale rate, which works out to somewhere between $0.02-$0.03 per kilowatt hour. Solar advocates argue that the credit should be at least the retail rate because distributed generation actually benefits the utility company and the grid.

“Utilities argue that net metering customers are being subsidized by other ratepayers, but the data shows that even without considering the benefits provided by solar to other customers and the utilities, the impact of net metering on ratepayers is negligible.” said Andy McDonald the Director of Apogee-Climate & Energy Transitions. “If the utilities were truly concerned about their customer’s costs, they wouldn’t be raising their rates again during this difficult time. I believe their real intent is to make rooftop solar unaffordable by reducing the value of solar generation and thereby corner the market for solar power.”

Individuals can submit public comments in the current net metering case for Kentucky Power which will likely set the precedent in other rate cases. Comments can be submitted to the Public Service Commission by emailing info.psc@ky.gov, reference the case number 2020-00350 (LGE) or 2020-00349 (KU).