The West Virginia Senate Judiciary Committee has advanced a bill to the full Senate designed to encourage retail customer investment in solar energy by exempting solar power purchase agreements from the state Public Service Commission’s jurisdiction.
The committee signed off Monday on House Bill 3310, which 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 Judiciary Committee moved the bill along after inserting an amendment to add a provision that the agreements must be written in 11-point font or larger so that there’s no print too fine.
Public Service Commission Chairman Charlotte Lane told the committee her agency supports the bill, which passed the House of Delegates in an 83-16 vote Wednesday.
The bill’s exemption of power purchase agreements from state Public Service Commission jurisdiction would be conditional, with one condition being that the aggregate of all 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 customer does not … get any money back,” Lane said. “That was so that there’s no cherry-picking and the rest of the customers on the electric utilities are not then unreasonably affected by the customers being eroded from the electric utility customer base by going to solar panels and going off the grid.”
Another 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.
“With [those caps], this should be a good balance,” Lane said.
John Scalzo, vice president of regulatory and finance for Appalachian Power and Wheeling Power, contended before the judiciary panel that HB 3310 addresses the challenge of fixed costs shifting from one class of customers to another as those in power purchase agreements go back and forth between paying their electric utilities and not paying depending on whether their solar panels are producing electricity at a given time.
“There’s a little bit [of cost-shifting], but it’s reasonable,” Scalzo said. “When the utilities were looking at this, we tried to craft it in such a way to keep that in mind.”
Judiciary Committee members Sen. Randy Smith, R-Tucker, and Sen. Rupie Phillips, R-Logan, who are also chair and vice chair of the Senate Energy, Industry and Mining Committee, voiced concerns with the bill prior to witness testimony. Smith feared the legislation would invite consumers to “cherry pick” their energy sources at the expense of customers who don’t follow suit, while Phillips objected to the possibility that federal subsidies could be involved in the development of solar panels to be installed per permitted power purchase agreements.
The bill has no tax credit provisions and does not provide any state subsidies — something that Delegate Moore Capito, R-Kanawha, chairperson of the House Judiciary Committee in which the bill originated last week, stressed on the House floor Wednesday as he urged passage of the bill.
Autumn Long, regional field director for Solar United Neighbors, a nonprofit dedicated to solar education and advocacy, endorsed HB 3310 to the committee.
“We’re happy to see this legislation moving forward,” Long said. “It’s something we support, and we’re pleased to see the stakeholders relevant to this discussion are in agreement about it.”