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By Sam Spence, special for the Statehouse Report | Dominion Energy’s customers in South Carolina with solar power systems may face higher bills under a new proposal before state regulators this month.
The energy utility says the additional fees are designed to account for differences in how solar customers are charged, ensuring that they share infrastructure costs with Dominion’s non-solar taxpayers.
But supporters of the solar industry and conservation say the regulatory move could kill the state’s solar market, increasing costs for customers who invest their own money in renewable energy.
At stake is a proposal that would add at least $ 428 a year to Dominion’s residential solar customers’ accounts, but typical customers could pay hundreds more.
Dominion and his critics have fought for months on the SC Public Service Commission (PSC). A formal public hearing on the matter is scheduled for March 23.
Energy independence
A 2014 law limited the state’s solar power generation to 2 percent of the state’s peak-hour capacity. In 2019, when the state approached the limit, state lawmakers gave solar energy companies a lifeline under the Freedom of Energy Act. In addition to raising the 2 percent limit and forcing utilities to allow more solar generation capacity, the law set a deadline of May 31, 2021 for regulators, utilities and solar companies to define how solar generation customers would be charged here forward.
About 11,000 Dominion customers maintain residential solar power generation projects in South Carolina, which represents less than 1.5 percent of its total base of 750,000 paying customers, according to the company.
Today, these customers can use any energy generated by their systems in their own systems and sell any surplus energy generated back to Dominion with a program known as net metering. Customers with solar systems ordered or established until May 31, 2021, will continue to receive credits on their accounts equal to the retail value of the energy they produce until 2025 or 2029, depending on when they established the service.
The “solar choice measurement fee” proposed by Dominion, set out in the Freedom of Energy Act, would add two monthly fees to residential customers’ accounts: a “basic installation fee” of $ 19.50 and a “subscription fee” of at least $ 16.20, based on the size of the system. (For companies, the cost of facilities increases to $ 32.50.) With a medium-sized residential system, according to the Solar Energy Industries Association, that subscription would be $ 27 a month, adding an additional $ 558 per year.
These fees, combined with adjusted credits for energy sold back to Dominion, would decrease the value of net residential metering by 55 percent, according to Timothy Beach, a California energy consultant who served as a witness for energy conservation and advocates solar intervening in Dominion’s request before the PSC.
“This tariff would result in a 55% reduction in bill savings for a typical residential solar customer, so that a typical residential solar system would no longer be economical in (Dominion’s) service territory,” Beach told the commission in its statement. of January.
Dominion notes that solar customers must draw power from the grid when their panels cannot generate electricity, a cost that cannot be overlooked.
“The reality is that solar customers in our system still depend on non-solar generating sources 75 percent of the time, and it is only right that they share the costs for a safe and reliable generation,” according to a statement provided by the spokesman. Dominion Energy, Paul Fischer.
Changing positions
Bargaining over the intent of the 2019 law has been the subject of much debate between Dominion and its detractors.
Leaving the responsibility to state regulators, the Energy Freedom Act called for new policies to support the state’s private solar industry and provide solar options that minimize financial impacts – “cost change” – for non-solar customers.
“The intention of South Carolina’s solar legislation was to establish rules that fairly distribute costs and benefits to all customers to eliminate any cost changes or subsidies,” said Fischer.
But the law itself requires that the transfer of costs be eliminated “as far as possible … while guaranteeing access to the client-generator options”.
Davis
And according to co-author of the law, SC Sen. Tom Davis, R-Beaufort, the 2019 law intentionally reflects the time it was written: in the twilight of the VC Summer nuclear fiasco that raised rates for then-time customers. SCE & G and cleared the way for Dominion to invade South Carolina in the first place.
“It has been widely publicized that this new law is about promoting clean energy, and this is partly true,” Davis wrote in a May 2019 Post and Courier op-ed shortly after signing the bill. “But, in fact, it is something more fundamental: it is a first and important step away from the monopolies of energy production that put the South Carolinians on some of the highest electricity bills in the country, and towards competition through an open market of many buyers and many sellers who will put downward pressure on the cost of energy production. “
The total price of solar generation has already dropped 45 percent in the last decade, as the industry has grown to become the seventh largest solar generation state in the country, according to the Solar Energy Industries Association. The group said the expectation is that the industry will almost double again in the next five years – that is, under the current trajectory.
Price off
Energy advocates and industry executives say the higher prices could drive out companies that have already invested in expanding the state’s solar capacity.
“You cannot decrease the value of this measurement by 60% for the consumer and expect many of them to say, ‘Yes, I will invest thousands of dollars, or tens of thousands of dollars for commercial purposes. for this in this endeavor, ”said Frank Knapp, who is intervening as a private customer of solar energy, but who also heads the Chamber of Commerce for Small Businesses in SC.
Moore
Eddy Moore, an energy expert at the Coastal Conservation League, testified that the Energy Freedom Act does more than just stipulate who bears the costs of solar energy.
“This requires the development of fees that will allow customers to produce significant savings on accounts, while serving a broader public good.” he said. “This is a sophisticated goal that seeks to empower customers with new rights, based on the status quo approach to tariffs and tariff design.
“If they adopt this source choice tariff, as proposed by Dominion, basically, we will see the closure of renowned solar companies in South Carolina,” said Knapp, pointing to a state consumer protection website that warns about solar scams.
This apocalyptic scenario for the industry may happen, according to some members of the private solar energy sector.
“We are deeply disappointed that Dominion continues to advocate for policies that harm domestic solar energy and deprive decision-making so that people choose their own energy,” said Tyson Grinstead of Sunrun, one of the largest solar companies from the USA. “We expect the Public Service Commission to consider the benefits of customer choice and domestic solar energy in its decision on Dominion’s anti-solar proposal. “
Dominion counters that the new tariffs would not eliminate consumers’ choice to invest in solar energy.
“The proposed Solar Choice tariff does not discourage Southern Carolinians from choosing solar energy,” said Fischer, explaining that solar customers would be charged lower rates during off-peak hours. “This is a huge victory for customers who want more freedom and control over their accounts.”
Don Zimmerman, the CEO of Alder Energy, based in Charleston, was not so optimistic in his testimony to the commission, calling the proposal “disastrous” and “destructive of the industry” for residential and commercial customers.
“Only one conclusion can be drawn: (Dominion) intends to punish companies that wish to generate their own electricity,” he said.
Sam Spence is an editor at Charleston City Paper. Have a comment? Send to: [email protected]. Make sure to add your name and contact information for verification.