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Caution urged in developing ‘rooftop solar’ rules

templateBy JACK WEATHERLY 

No one has spoken out officially against allowing “rooftop” solar production of electricity in exchange for credit on utility bills in Mississippi.

But a number have urged the Public Service Commission to use caution in adopting rules for so-called net metering, which would regulate home generation.

For that reason the commission decided at an Oct. 6 hearing to extend the comment period to Oct. 20. Anyone interested in making a comment on the proposed rule may send an email to executive.secretary@psc.state.ms.us

The PSC voted in December 2010 to open a docket on net metering and later commissioned Synapse Energy Economics of Cambridge, Mass., to do a study on the practice that is being used in some fashion in 44 states.

The study, filed with the PSC on Sept. 29, 2014, found that net metering “has the potential to result in downward pressure on rates” in the state. The commission subsequently set a July 1, 2015 deadline for written comments and suggestions on its draft rule.

In advance of the Oct. 6, 2015 meeting, the Mississippi Attorney General’s office suggested that “it may be appropriate (for the commission) to consider the first steps as a pilot program.”

Solar-generated electricity in the United States in 2000 was minuscule. But according to the U.S. Energy Information Administration, solar and wind are growing at the fastest rate among renewable resource fuels, which collectively could constitute 15 to 22 percent of energy generation by 2040. Renewables are gaining support because they avoid production of carbon, a pollutant, a result of burning fossil fuels.

A flaw in the commission’s draft proposal is that it is “theoretical,” not using data from Mississippi utilities, according to Entergy Mississippi.

Entergy Mississippi, an investor-owned utility that has 435,000 customers, used its data and found that a typical residential customer could reduce the monthly bill by $40, or 30 percent.

However, that model, based on the PSC draft, would result in shifting costs to other customers, according to Jeremy Vanderloo, assistant regulatory counsel for Entergy, who said at the Oct. 6 hearing that that has been “documented and it’s causing problems in other states around the country.”

If net metering is instituted it must be done equitably, Entergy has argued.

To avoid shifting costs from those who benefit from generating electricity to those who don’t – including those at the lower end of the economic scale – Entergy suggested that the compensation be settled each month, rather than at the end of a 12-month period, which was proposed by the commission.

Rolling over excess energy month after month would leave the producer with a negligible carryover at the end of 12 months because of the offset of usage, said Shelly Bass, regulatory counsel for the utility. Plus, it would unfairly shift costs to nonparticipants in net-metering, she said.

Crystal Utley Secoy, special assistant attorney general for consumer affairs, submitted in writing that the setting of “avoided cost” rates be done by a third party, not a utility. Avoided costs are those that are not incurred by a utility because it does not have to generate that electricity.

Mississippi Power Co., another investor-owned utility, serves about 187,000 customers, primarily in southeast Mississippi, likewise would endorse compensation at the utility’s avoided cost.

Nevertheless, Mississippi Power argues that, overall, “net metering of a solar (generation facility) creates upward pressure on rates paid by its customers.”

Entergy’s Bass said in an interview that “the conclusion that net metering in Mississippi is going to have a downward pressure on rates is simply false.”

“And the participants that are grasping hold of the Synapse report are leading this discussion down a path that is incorrect.”

The Synapse study found that the effect of net metering need not shift costs to those who don’t produce electricity if done properly.

Bass said Synapse report is “a theoretical cost-benefit analysis” that does not rely on data from Mississippi utilities.

As a safety valve, the Mississippi Power suggests a review of the process, if it is adopted, after five years.

The Alliance for Solar Choice, which, according to it website, was founded by rooftop solar companies, cited the commission staff report that the proposed rules would “create the potential for increasing economic activity and job growth.”

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