Power Companies and PSC Rules Discriminate Against WV Businesses and Cities Wanting to Go Solar

Dan Conant is director of both Solar Holler and WV-SUN, West Virginian non-profits that are working with community groups around the state to finally make solar affordable and accessible through innovative financing models and grassroots advocacy.  I have worked and talked with Dan quite a bit over the last two years.  Dan’s work with the practical tasks of expanding solar generation in WV give him unique perspective on solving the problems we all face.  I will be posting Dan’s thoughts occasionally on The Power Line, whenever he wants to share his thoughts.  Here is his first post on The Power Line.

Across West Virginia, even as solar is becoming more and more popular, a very big group is being shut out of going solar altogether—businesses, manufacturers, non-profits, and municipalities—basically anybody but homeowners.

Last fall, I worked with the Wayne County Economic Development Corporation to explore the possibilities for including solar at a wonderful redevelopment project on a capped landfill in Prichard, WV.  Using this brownfield, the WCEDC is bringing new businesses and industry to the county–including a new recycling facility.  The recycling facility would love to incorporate solar not only because it makes sense with their business approach, but also to make sure their power will always be affordable–because we’ve all seen what WV’s utilities are prone to do, year after year.

But when I dug into the numbers, an ugly fact came to light that put the kibosh on the whole project. Businesses, non-profits, and municipalities–anyone with a “general service” commercial electricity account–get paid by the utility just a fraction of what a homeowner gets.  In fact, in this case, the recycling center would get just 40% of what any homeowner in Wayne County would have gotten from APCO for their solar.

How can this be?  It’s because of the way that the WV Public Service Commission set the rules for net metering.  Every month, the solar electricity you produce on your panels is credited against the dirty electricity you use from the utility.  Do a little bit of subtraction and you get the number of kWh on your utility bill.  Simple enough right?

But it doesn’t work that way for commercial electricity users because of a thing called demand charges.  Commercial accounts pay very small amounts per kWh they use.  The bulk of their payments are in the form of demand charges–which charge a set rate for the highest 15-minute instantaneous usage during the entire month.  So if a restaurant has an industrial dishwasher on at the same time as their oven, refrigerators, and lighting, they’re going to pay more for the month than if they had run the dishwasher at night when everyone’s gone, even though they use the same number of kWh during the month.  In APCO territory, the recycling center will pay just 3.62 cents per kWh they use–but pay much, much more for the demand charges.

Unfortunately for businesses, churches, and cities that want to go solar, your solar credits are not allowed to offset your demand charges–only the electricity and transmission fees.  So the recycling center would get just 3.62 cents per kWh for their solar, while the home next door would get 9 cents (because residential rates are a flat rate per kWh).  By the way, the numbers are even worse for companies or organizations being billed by FirstEnergy (just 31% of residential rates).

Companies could actually do better by selling their kWh directly onto the PJM regional electricity wholesale market. (Prices for today were between 6 and 7 cents during the sunny afternoon).  No wonder we’ve seen precious few commercial solar installations in West Virginia.

This simply isn’t fair.  AEP and FirstEnergy are discriminating against non-profits, municipalities, and businesses that want to produce their own energy–taking their solar and turning around, making a killing, and ripping off the folks who need affordable electricity the most.

It’s also a poor economic decision for the state because the solar that these institutions could be producing would save ratepayers on the peak summer electricity spot market (when prices last year spiked to 17 cents per kWh). It would also reduce needed investment and maintenance on the transmission grid.  And that’s before we even get to the environmental and social benefits (including keeping our money in our communities rather than shipping it across the border to out of state behemoths).

Fortunately, there’s an easy solution to this problem. All the PSC has to do is level the playing field—just have utilities pay non-profits and businesses the same fixed rate as homeowners for their solar. After all, solar is solar, no matter who owns the panels.

But the PSC takes its cues from the legislature—and that’s where you come in. We need you to share these challenges and obstacles with your home legislators. The ins and outs of solar power are foreign to our legislators—despite our role as an energy state. We should be taking it upon ourselves in the coming months and years to explain to our individual delegates and senators the promise that solar holds for our state, while also explaining the barriers and hurdles that they can help tear down.

One day soon, I want to see any church, school, city, or business that wants to harness their own power be paid fairly for the electricity they’re producing.

One thought on “Power Companies and PSC Rules Discriminate Against WV Businesses and Cities Wanting to Go Solar

  1. Great post Bill/Dan, the rules for net metering are due for updating next year so we can send comments in to the WVPSC for that when its time. We need to encourage the WV manufacturers association and Energize WV to get on board with this as well. I did not realize the demand charges were so high as to offset the sweetheart low rates that large manufacturer’s pay and had no idea about the small businesses that could be affected as well.

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