Fair competition is the foundation of a healthy economic system. But, Ohio-based holding company AEP, and its subsidiary Appalachian Power, don’t agree. It is obvious they don’t want to compete with solar energy.
This is the only explanation for James Fawcett’s recent op-ed in the Daily Mail (Net metering law protects power customers, Mar. 17).
Mr. Fawcett and his employer, Appalachian Power, are asking the government to tip the scales in their favor. They want West Virginia’s Public Service Commission to require that customers with solar panels on their rooftops pay the utility for the ability to re-sell, at a profit to the utility, the energy their solar systems generate.
Owners of solar panels don’t always consume every bit of electricity their systems generate. Unused electricity is sent back through their electric meters and resold by the customer’s utility. Net metering ensures solar owners receive fair compensation from the utility for the electricity they generate.
During the 2015 session, the West Virginia Legislature preserved the statute (in House Bill 2001) requiring utilities to offer net metering to customers. But the Legislature created confusion about whether net metered customers would continue to be paid for the full value of the electricity they generate by passing a second bill, House Bill 2201 (HB2201).
Mr. Fawcett, and AEP, would have the PSC impose penalties on net metered customers. These charges would be based on a deliberate misrepresentation of the impact that customers who produce solar energy have on our electric grid.
West Virginia PSC rules already require net metered customers to pay for modifications to existing transformers, circuit switches, and other hardware that a power company must make to accommodate their systems. Appalachian Power is asking the Public Service Commission to put new charges, to be paid to power companies by solar customers, on top of these payments. Appalachian Power wants the Public Service Commission to impose these penalties to squelch competition from solar energy.
AEP is not alone in this effort. In January 2013, the Edison Electric Institute, the national lobbying organization for the major electric utilities issued a report that described competition from solar generators as a direct threat to the electric utilities’ business model. The Institute proposed a strategy to target net metering and strangle the growing competition from customers who were choosing to produce their own electricity.
Utilities across the country have tried, and failed, to make similar arguments in places like Arizona, Utah and Louisiana. Over the past few years, public service commissions across the country have conducted independent studies of the system-wide benefits and costs of net metered solar power systems. Their findings have been overwhelmingly positive toward the benefits of solar energy. For example, Nevada’s Public Service Commission examined net metering and found that it will save the utility grid, and all ratepayers, tens of millions of dollars.
Net metered systems benefit the grid because they provide localized power during the day, when the demand for electricity is highest. Electricity seeks the shortest path of least resistance to an electrical load. This means that net metered customers’ electrons travel directly to their neighbors’ houses. Net metered customers’ electricity uses none of the power company’s wholesale transmission and substation equipment.
AEP is scared of its customers who are choosing to go solar and sharing their excess electricity with their neighbors.
This fight over the right of West Virginians to produce their own energy impacts solar and non-solar customers alike. More locally-produced energy on the electric grid benefits everyone. The Public Service Commission should ignore AEP’s self-interested arguments, preserve economic competition in the state, and protect utility customers from unfair penalties that only benefit power company profits.
Bill Howley is Program Director for West Virginia Sun, an organization that is helping West Virginia communities create affordable renewable power.