The Louisiana Public Service Commission, which regulates utilities outside of Orleans Parish, is slated to discuss proposals Wednesday (April 17) that could have big implications for solar-power users. Thousands of solar energy systems have popped up on rooftops across Louisiana, and some state regulators say the financial burden of installing the necessary utility hookups have been shouldered by other...
The Louisiana Public Service Commission, which regulates utilities outside of Orleans Parish, is slated to discuss proposals Wednesday (April 17) that could have big implications for solar-power users.
Thousands of solar energy systems have popped up on rooftops across Louisiana, and some state regulators say the financial burden of installing the necessary utility hookups have been shouldered by other electricity customers. They also say power providers are getting stiffed in how extra electricity is sold back to the grid.
The five-member PSC may vote on as many as eight measures, according to commissioner Foster Campbell of Bossier City. The issues include:
- Assessing whether utilities and non-solar customers are subsidizing solar users by purchasing unused solar power at retail rates. Among the options for tackling this: keeping the rate at retail, reducing it to a level between retail and the utility's avoided cost, placing the rate at avoided cost, or less than avoided cost.
- Determining whether to place a surcharge to cover fixed costs of using solar power, such as setting up the necessary equipment, known as net metering. Entergy pegs this cost at $65.
- Deciding whether utilities can assert in deciding electricity rates that solar users are also being subsidized in the utility's costs of constructing, owning, and maintaining its electric system, since the solar customers are generating more of their own power.
- Determining whether to grandfather existing net-metering customers under any new rules that are adopted.
In a Nov. 30 report PSC staff recommended that excess power should be sold back to the utility at its average "avoided cost," or the amount the power company would have paid to generate the electricity on its own, a move that New Orleans utility giant Entergy Corp. favors. That would mean solar users who sell electricity back to the grid would get less of a return.
Customers of the region's utility companies, including Entergy Louisiana, which provides power to Algiers and suburban areas south of Lake Pontchartrain, and Pineville-based Cleco Power, which serves customers on the north shore, would be impacted by the potential changes.
The PSC's review is timed with a broader look at the generous tax incentives that Louisiana established four years ago to encourage the proliferation of wind or solar energy systems.
Changes that are approved would not apply to Entergy New Orleans customers because the utility is regulated by the City Council. Still, in recent years, thousands of systems have been installed in the New Orleans area alone.
For utilities, having more of their customer base using renewable energy to generate their own power means less power will be sold. But customers will continue using the company's electrical distribution system just as much, without paying their share to fund repairs and upgrades, the power companies say.
Local supporters of solar power, however, say the costs being borne by others is relatively small, outweighed by the benefits of reduced congestion on the utility's distribution grid from having some customers producing their own power.
Proponents also say net metering users are more likely to buy power from the utility at off-peak times, like at night or during rainy weather, further reducing congestion. Others have suggested that existing net metering users should be exempt from paying any new charges.
Some leaders in the local solar industry have called the commission's review a knee-jerk reaction, a solution without a problem. But some regulators, including PSC commissioner Clyde Holloway of Forest Hill, say mounting costs are being absorbed across the board as more businesses and individuals install the equipment.
Holloway said in an interview earlier this month that he believes solar users should be able to sell excess power back to the utility at a rate of one cent above its avoided cost.
The PSC meeting is scheduled to begin at 9 a.m. in the first floor of the Galvez State Office Building in Baton Rouge.