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The West Virginia Legislature passed a bill designed to encourage retail customer investment in solar energy by exempting solar power purchase agreements from the state Public Service Commission’s jurisdiction.

The House of Delegates approved Friday evening minor adjustments made to the legislation by the state Senate.

House Bill 3310, which specifies 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 of 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’s exemption of power purchase agreements from state Public Service Commission jurisdiction would be conditional. One condition would be 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, a billing mechanism that credits customers who generate their own electricity from solar power for returning the electricity they don’t use back into 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.

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

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