Confusion over the new net metering law
In the 2015 legislative session, the WV Legislature preserved the statute (HB2001) requiring power companies to offer net metering to their customers in the process of repealing a broader law concerning WV’s energy portfolio standard. Instead of amending certain definitions back into the preserved net metering statute, the Legislature also passed House Bill 2201 (HB2201) to accomplish that task. One definition in particular, of a new term “cross-subsidization” inserted by amendment, created an ambiguity about both the meaning of the term and how it would be applied by the WV Public Service Commission.
(c) “Cross-subsidization”, for purposes of this section, means the practice of charging costs directly incurred by the electric utility in accommodating a net metering system to electric retail customers who are not customer generators. [emphasis mine]
(d) The Public Service Commission shall adopt a rule requiring that all electric utilities provide a rebate or discount at fair value, to be determined by the Public Service Commission, to customer-generators for any electricity generation that is delivered to the utility under a net metering arrangement. The commission shall assure that any net metering tariff does not create a cross-subsidization between customers within one class of service. [emphasis mine]
This section of the WV Code can be read narrowly that direct costs incurred by a utility to interconnect an individual net metered customer must be paid by that customer. This is currently the WV PSC rule. If a power company must upgrade a transformer or change switching on a circuit to accommodate an individual customer, the customer pays that cost. FirstEnergy’s lobbyist stated that his company interpreted the bill this way in testimony to the House Energy Committee and the Senate Judiciary Committee during the legislative session.
We had been concerned that AEP and FirstEnergy, the two Ohio-based holding companies that control almost all WV electric customers, would try to expand the “cross-subsidization” issue to include the kinds of indirect cost recovery issues that have been raised by power companies throughout the US. While FirstEnergy has made no public comment beyond its lobbyist’s statements at the legislature, AEP published on op ed piece in the Charleston Daily Mail on March 18, 2015, indicating that they will attack the terms of net metering in WV using HB2201.
The forum for resolution of this issue will likely be the WV Public Service Commission, either in a General Investigation case focused on revising current net metering tariffs or in specific rate cases as the power companies individually attempt to change their net metering tariffs.
Nothing will change until the WV PSC acts
The current PSC rules on net metering will continue to govern any existing or new net metered solar power systems until the PSC determines otherwise. General investigations, rules cases or rate cases generally take at least a year to complete, so there will be plenty of time. The PSC case process is also open to any parties who have an interest in the case. This will give us a strong opportunity to demonstrate that AEP is wrong and that solar power producers actually benefit all other rate payers.
There is also the possibility of a court challenge to any change in the rules that affects the terms of net metering for any solar power producers who installed their system under the existing tariff. This may offer some incentive for people to get their systems installed before the rules change, if they do.
There are two basic ways that power companies in some other states such as Arizona and Wisconsin have eroded net metering. Right now, WV has a system that gives solar power producers a one-for-one credit for the kwh they feed back through their meters at the retail electric rate. Some states just add a monthly fee to net metered customers’ electric bills. That fee is $1.50 per month in Arizona. In Wisconsin, fees are imposed on a utility by utility basis. WE Energies, with the approval of the WI PSC, imposed much higher fees on its customers. In other cases, the amount that solar producers were credited was reduced below the retail electric rate.
Independent studies show that net metered customers provide a net benefit to all other rate payers
There is now a strong body of research that shows net metered solar power producers actually provide benefits to all rate payers. Here are three independent studies that have been done for state public utilities commissions that have come to this conclusion:
Mississippi study by Synapse Energy Economics – http://www.synapse-energy.com/project/mississippi-net-metering-study
MN Value of Solar study – http://www.growsolar.org/wp-content/uploads/2014/10/MN-Value-of-Solar-Methodolgy.pdf
So even if the WV PSC does take up the issue of how net metered customers should be compensated, we have the evidence to support our position, and we will have an opportunity to present it in any case the power companies file.
Additional net metering posts on WV SUN: