For months, West Virginia regulators have been considering a request by utility companies to change a key solar incentive, which advocates have warned will make solar less affordable and stifle the state’s budding industry. But a bill recently introduced in the state Legislature could protect that incentive.
Currently, the net metering policy allows households and businesses to sell back their surplus solar energy to the electric grid at a fair market value — the same price the power companies charge other residential customers for that electricity. Net metering plays a significant role in making solar panels cost-effective for owners.
HB 5422 would protect that policy by instructing the state Public Service Commission to require utility companies to buy energy from solar customers at a “full retail credit.” Right now, the commission determines the rate at which people and businesses with solar panels are reimbursed by utilities for their excess energy.
But under this bill, utility companies would be required to credit surplus energy produced by solar customers at the same retail rate they charge another customer who uses that energy.
“We have an emerging market in West Virginia with solar manufacturers being located right here and, like Calhoun County, places that desperately need manufacturing and businesses like this,” said Del. Brandon Steele, R-Raleigh, the bill’s lead sponsor. “And if we can make that a hospitable environment, that’s exactly what we need to do.”
House Speaker Roger Hanshaw, R-Clay, has cosponsored the bill. He supports Steele and the legislation, according to House of Delegates spokeswoman Ann Ali.
The bill has been introduced and referred to the House Energy and Manufacturing Committee, but it has yet to be put on an agenda as the deadline for bills to get out of committee is a little bit more than a week away. Ali said in an email that Del. Bill Anderson, R-Wood, chair of the committee, does not have a plan for when or if the legislation may run.
If it ultimately is signed into law, the measure would remove state utility regulators’ ability to determine the reimbursement rate as they consider changing it.
In a rate case filed with the commission last year, Mon Power and Potomac Edison, which service more than half of the state, asked the PSC to allow them to buy back energy from solar customers at a lower rate than what they charge for electricity. The change would only impact future solar customers.
Net metering encourages solar investments and helps customers save money, but the proposed change by utility companies “would stifle the growth of the emerging renewable energy market and overburden our fragile power grid,” according to the West Virginia Environmental Council.
“Mon Power and Potomac Edison do not support a net energy metering credit at the full retail rate,” said a spokesperson for First Energy, the parent company of the two utilities. The spokesperson also said that the utilities are asking the PSC to ensure that solar customers pay “a portion of the fixed costs related to the distribution, transmission, and capacity facilities they use.”
But cost-benefit analyses have found that the current method of net metering imposes no significant increase for non-solar ratepayers and that the economic benefits outweigh the costs, resulting in a net benefit for all customers, according to the Brookings Institution.
“We want to grow all businesses in West Virginia, make sure that everybody has a fair footing,” Steele said. “Whether that’s our electric utility — which has contributed a lot of our tax base and our wage base here in the state — as well as new industries and we want to see that those are fostered and grown.”