Rooftop solar fights intensify in Southeast

Source: By Kristi E. Swartz, E&E News reporter • Posted: Sunday, December 1, 2019

How big of a headache can roughly 1,000 rooftop solar customers be for a giant power utility?

A few solar users can’t cause much pain for companies with millions of electricity consumers spread across the U.S. Southeast, according to renewable energy advocates.

But electricity providers say the discomfort will grow if more residents and businesses turn to solar arrays to offset their energy use, become greener and sell any excess power back to the grid. Those customers’ lower monthly bills mean higher utility rates for everyone else, executives from Georgia Power Co. said yesterday.

“Our concern is that we send accurate price signals to customers,” said Larry Legg, Georgia Power’s pricing and rates director, in a hearing before state utility regulators.

Georgia Public Service Commission Vice Chairman Tim Echols said he wonders if the company is sending the wrong message.

“Is it possible that the signal to distributed generation customers is that ‘we really don’t want you to do it’?” Echols asked.

Georgia Power’s approach to rooftop solar has been challenged as the utility pushes to raise rates. Legg said the company is not against renewable energy.

The battle over how electric companies value rooftop solar is playing out across the Southeast, a region that just a decade ago had little renewable energy. Large, utility-scale solar arrays — which more closely resemble the centralized power plants that electric companies are used to — have come to dominate the area as costs have fallen.

Rooftop solar is a different story. Utilities argue that if rates aren’t structured correctly, too many customers generating their own power will eat into revenues, forcing all customers to pay more to make up for the loss.

Renewable advocates say utilities are throwing up too many barriers to early adopters and discouraging others from having clean power at their home or business. States in the Southeast generally lack policies that are economically friendly to distributed solar arrays and the customers who want them, they argue.

One example is playing out just next door with Georgia Power’s sister company, Alabama Power Co. There, state utility regulators last week took up a formal challenge to a rooftop solar fee that has been in place since 2013. Solar boosters argued that the tariff of $5 per kilowatt-month dramatically cuts into the savings that rooftop customers receive (Energywire, Nov. 22).

Solar’s chief downside is that it is an intermittent resource and isn’t available at night or on rainy days. This means customers still must be connected to the power grid unless they have a backup battery system.

Alabama Power wants money for providing that backup power service. If the utility must be ready to supply electricity to rooftop customers at a moment’s notice, those customers need to pay for it, the company argued.

“I cannot change my infrastructure to serve that customer, so I do not avoid the fixed cost associated with that,” said Natalie Dean, Alabama Power’s regulatory pricing manager.

Alabama and Georgia Power are two of three regulated electric companies owned by Atlanta-based energy giant Southern Co.

Alabama has been slow to transition away from fossil fuels toward lower-emission sources of electricity, compared with other parts of the United States. The state is home to a major coal mining company, Drummond Co. Inc., which is also a top employer.

The argument in favor of backup tariffs centers on “cost shifting” — the idea that nonsolar users wind up paying more fixed costs for maintaining the power grid.

Very few electricity customers in Alabama have put solar on their roofs. Indeed, Alabama Power has fewer than 200 customers doing so, executives testified last week.

Lawyers from the Southern Environmental Law Center argued that this figure is too low to make a dent in Alabama Power’s system or its revenues. Charging customers more for rooftop solar makes their investment less economic and will deter others from doing the same, they say.

‘Hostile’ TVA?

There was a time in which the Tennessee Valley Authority, a federally owned utility that covers seven Southeastern states, led the region in distributed solar, according to renewable energy boosters. But that time is long past and shows no sign of returning, they said.

TVA’s board has agreed to close its signature residential energy program after more than a decade because too few customers have signed up for it. It wants to replace the so-called Green Power Providers program with one that works with a group of certified solar installers and uses a standard method to connect customers to the power grid.

“We’re trying to modernize the program, since it’s been around for so long,” TVA spokesman Scott Fiedler said in an interview with E&E News.

The Green Power Providers program has evolved since it launched in 2003. The idea at the time was to jump-start solar in the Tennessee Valley, and it led to roughly 4,000 installations through this year.

Low customer interest, falling costs for utility-scale solar and a desire to better align rates to market conditions are driving TVA to change the legacy program, Fiedler said. TVA issued a draft version of those changes and is reviewing more than 300 comments on that plan.

The Southern Alliance for Clean Energy published its comments on its website and called TVA “increasingly hostile” to solar in the Tennessee Valley. SACE, known for being critical of the public power utility and its renewable policies, wants TVA to enhance the Green Power Providers program, not kill it.

“TVA’s own design changes have driven program underutilization,” SACE officials said, adding that TVA’s proposed alternatives seem counterproductive.

For its part, TVA has approved a long-term energy plan that could include as much as adding 14 gigawatts of solar over the next 20 years. It’s likely that the majority of that will come from large arrays.

S.C. ‘killer’

Solar installers in South Carolina are reeling after a recent decision from state utility regulators that they say will freeze large-scale solar development across the state. The South Carolina Public Service Commission agreed to change the standard contracts between utilities and solar developers in a way critics say would make future solar projects uneconomic.

The PSC was charged with implementing a new state law designed to expand energy options in a state that has historically relied on baseload fuels like coal and nuclear. Electric companies Dominion Energy South Carolina and Duke Energy South Carolina proposed lowering payments to large-scale solar companies and limiting contracts to 10 years.

State regulators’ decision issued earlier this month prompted sharply worded responses from the national solar industry group, the Solar Energy Industries Association, and the South Carolina Solar Business Alliance. They vowed to fight what SEIA referred to as an “egregious decision.”

Members of the solar business alliance pointed to neighboring states that have more favorable contract rates — and more solar power as a result.

“If nothing changes, then our attention and investments will be elsewhere,” said Hamilton Davis, regulatory affairs director for solar developer Southern Current. “As the ruling stands, it’s a deal killer for South Carolina.”