Governors' Wind Energy Coalition

Consumer advocates are raising legal questions over Georgia Power Co.’s approach to solar power as the utility pushes to raise rates.

The battle centers on how Georgia’s largest electricity provider values rooftop solar and whether the Atlanta-based company is complying with a 2001 law aimed at boosting use of the technology.

The ongoing debate has steered a routine rate review toward questions of how renewable energy is treated in the Peach State.

At issue is a price and billing process that Georgia Power uses for customers who have their own solar panels and want to get credit for the excess electricity they sell back to the company. Under the “renewable and nonrenewable resources” (RNR) tariff, any extra electrons generated by Georgia Power’s customers are not used to offset ones that are needed should demand rise later in the day.

Instead, the utility pays a wholesale rate for those excess kilowatts that flow out onto the grid from distributed resources like rooftop solar. If electricity demand at the home or business rises even moments later, the utility sells that electricity back to the customer at the retail rate, which is higher than the wholesale one.

In other words, the utility nets out the solar imports and exports instantaneously.

“We believe the way that we’ve been doing it … is the right way to do it,” said Larry Legg, Georgia Power’s pricing and rates director, during an October hearing before regulators at the Georgia Public Service Commission. He said the company has been using instantaneous netting since the PSC first approved the RNR tariff in 2003.

Others aren’t so sure. Members of the Georgia PSC staff and solar industry advocates question whether the utility is following the rules according to the 2001 Georgia Cogeneration and Distributed Generation Act, commonly referred to as the Cogen Act.

“The company’s netting practice, under this tariff, raises a legal question under the Cogen Act,” said Kurt Ebersbach, a senior attorney with the Southern Environmental Law Center’s Atlanta office who is representing consumer and solar industry groups.

Jamie Barber, PSC staff’s energy efficiency and renewable energy manager, agreed in her response to Ebersbach. She later told a lawyer representing Georgia Power that the staff had not made any official conclusions, however, and had not taken a legal position on the issue.

“This is the first case where we’ve heard more about: Is the company currently netting correctly in compliance with the Cogen Act?” Barber said in recent testimony.

A chief issue is how the company is interpreting the words “billing period,” which is mentioned six times in the law. Such a term is typically interpreted as monthly. Georgia Power referred E&E News’ questions about the billing period to additional testimony set to be filed tomorrow.

Barber testified that a so-called billing period is the time period over which a customer’s bill is calculated, adding that’s typically 28 to 30 days.

Don Moreland, former chairman of the Georgia Solar Energy Association, said the same in his public comments.

“I get my bill once a month,” he said. “What the [law] does not say is that the company, Georgia Power, can net out my distributed generation amount whenever … their machines can figure it out.”

A question of fairness

Georgia Power treats extra electrons for customers differently under its Community Solar program, which is geared toward customers who can’t install rooftop solar panels or don’t want them.

In that case, any excess generation is subtracted from total electricity use each month.

The distinction plays out this way: A customer using 1,309 kilowatt-hours a month with a 5-kilowatt rooftop solar system would be billed for more than 750 kWh a month under the RNR tariff. Under a 5-kW subscription to the Community Solar program, that same customer would be billed for less than 500 kWh a month.

The difference can add up to as much as 4,000 kWh in one year, amounting to several hundred dollars, according to Vote Solar.

“I was frankly surprised to learn that Georgia Power is favoring customers who buy solar through its Community Solar program over those who get solar installed on their roof by a local Georgia solar installer — we’re just asking for fair treatment — all solar exports should be treated the same,” said Mark Bell, president of Atlanta-based Velo Solar, in an interview with E&E News.

Georgia Power and the PSC have “been involved in discussions about the methodology” that the utility uses, Legg said, but stood behind the company’s practices.

“This is really the best overall for customers across the system because it’s sending the right price signal, which is the most economic use of the system,” he said.

A company spokesman referred questions from E&E News to the upcoming PSC filing, saying there will be “significant discussion” about the topic. The PSC’s review of the utility’s rate request will continue through December.

For Georgia Power’s part, the company agreed to add more than 2 gigawatts of solar to its output as part of the company’s latest long-term energy plan. That will bring the company’s amount of renewable energy to more than 5 GW by 2024.

Much of that electricity is coming from utility-scale solar arrays. Electric companies prefer large-scale solar farms because they are more economical and more closely mirror large generation when compared with distributed solar systems.

Solar representatives in Georgia told the PSC recently that it’s time to do more.

Moreland, who is also the founder of Solar Crowdsource, a platform to facilitate Solarize rooftop solar programs, told commissioners last week roughly 97% of installed solar in Georgia comes from utility-scale systems.

“We’re lagging in distributed generation severely,” he said.