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The House Judiciary Committee squeezed in a solar energy-friendly bill Friday, advancing to the full House of Delegates legislation that exempts solar power purchase agreements from state Public Service Commission jurisdiction.

Sunday was the deadline for bills to be advanced from the House and Senate committees in which they originated before the legislative session adjourns April 10.

House Bill 3310 specifies that solar energy facilities located on and designed to meet only the electrical needs of the premises of a retail electric customer do not constitute a public service, nor is the output subject to a power purchase agreement with the retail electric customer.

Under a power purchase agreement, a developer arranges designing, permitting, financing and installing a solar energy system on a customer’s property at little or no cost. The customer buys the system’s electric output from the solar services provider for a predetermined period at a fixed rate, usually lower than the local utility’s retail rate, while the solar services provider gains tax credits and income from electricity sales.

The bill has no tax credit provisions and does not provide any state subsidies.

“In a free market, we’re letting individual parties freely contract with each other, freely,” Delegate Moore Capito, R-Kanawha, House Judiciary chair, said of the bill. “Sounds like capitalism to me.”

House Bill 3310’s exemption of power purchase agreements from state Public Service Commission jurisdiction would come on four conditions, the first being that the aggregate of all leasing, power purchase agreements and net metering arrangements for any utility not exceed a cap of 3% of the utility’s aggregate customer peak demand in the state during the previous year.

That cap already exists for net metering, which allows customers who generate their own electricity from solar power to sell the electricity they don’t use back into the grid. The bill’s second condition sets individual customer onsite generator limits so that solar energy facilities meet only the electrical needs of the retail electric customer’s premises, not to exceed 25 kilowatts for residential customers, 500 kilowatts for commercial customers and 2,000 kilowatts for industrial customers.

The bill also requires customers who enter into power purchase agreements or solar facility leases to notify their utility first, and extends authority to the Public Service Commission to make and govern interconnections for the power purchase agreements and leasing arrangements. The commission would not have authority over the power rates for such arrangements between the onsite generator and the customer.

Public Service Commission Chairman Charlotte Lane told the Judiciary Committee that the commission worked on crafting HB 3310.

“We are happy with this bill,” Lane said. “It’s not designed to hurt any existing customers unreasonably.”

John Scalzo, vice president of regulatory and finance for Appalachian Power and Wheeling Power, testified customers providing some of their own power from a third party could result in “a little less” cost recovery for the utilities that the rest of their customer base would have to support.

Chris Hamilton, president of the West Virginia Coal Association, blasted the bill in an extended back-and-forth discussion with Capito, predicting it would result in a loss of coal jobs as consumers get to “cherry-pick” their electrical load.

Capito called HB 3310 a “very, very watered down version” of Senate Bill 30, a measure which stalled in the Economic Development Committee that was less conditional and did not include language noting the existing cap on net metering arrangements.

“Would it be safe to say if this was a solar bill on steroids that would worry you more?” Capito asked Hamilton.

“No, I believe this is a solar bill on steroids,” Hamilton replied.

Solar United Neighbors, a nonprofit that supports rooftop solar development, had lobbied for SB 30 but welcomes HB 3310.

“I’m pleased to see the issue gaining momentum with support from Republican leadership,” Autumn Long, regional field director for Solar United Neighbors, said Monday.

If the bill is not removed from the House voting calendar, members will vote on any amendments Tuesday, with a vote on passage slated for Wednesday.

“I’m looking forward to listening to the floor session [Tuesday] and the vote on Wednesday,” Long said.

Reach Mike Tony at mtony@hdmediallc.com, 304-348-1236 or follow @Mike__Tony on Twitter.

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