Go Solar: Make Utilities Give Consumers a Fair Price for Surplus Electricity

Sun MoneyThanks to Luke Metzger at the Environment Texas blog for this take on pending net metering legislation (read: making sure folks with solar panels get paid back for the excess energy they produce):

On Monday, the Texas House will decide whether to promote solar energy by requiring utilities to pay consumers fair prices for surplus solar power or to codify anti-consumer practices in order to benefit big utilities like TXU. Here’s the story.

Sick of riding the rollercoaster of high electric rates and concerned over pollution and dependence on foreign oil, many Texans are turning to solar power to get more choices than their electric company provides. More than 40 states help consumers do this by requiring electric companies to pay a fair price for the surplus electricity solar panels put back on the grid (known as net metering). In return, the electric grid benefits from a supply of pollution-free electricity during peak-demand time periods, such as hot summer afternoons, avoiding congestion costs and dampening real-time on-peak wholesale energy prices. The more renewable generation that is located at customer’s houses and businesses, the less will need to be charged in the future to all customers’ electric bills for wires, fuel and pollution costs. Incentivizing solar will also help create jobs and attract manufacturers to the state.

In addition to consumer rebates and tax credits, net metering is a key financial driver making solar power a cost-effective investment for consumers. Texas had such a policy in place in the 1980s, but with the restructuring of the electric market, old definitions of electric utilities no longer applied and net metering was inadvertently ended.

In 2007, the Texas Legislature attempted to correct this mistake by declaring the intent in HB 3693 that “that net metering…be deployed as rapidly as possible.” Unfortunately, because net metering was not defined in the legislation, the Public Utilities Commission of Texas (PUCT) determined that “use of the term ‘net metering service’ could be confusing … and is not necessary to implement the statute”. Their rule essentially makes net metering optional, leaving the decision to purchase surplus electricity up to the Retail Electric Providers. In their 2008 report, the International Renewable Energy Council (IREC) singled out Texas as a state with one of the “Worst Practices” with regard to net metering.

CSHB 1243 (Rep. Gallego, D-Alpine) improves the situation by requiring electric companies to pay consumers at least 80% of the retail price, minus non-bypassable charges. While this would not have been considered true “net metering”, it would have been a big improvement over current rules.

Rep. Gallego has been a longtime advocate of renewable energy, but now, electric companies like TXU and Reliant have convinced him to amend the bill so they only have to pay the wholesale price, which can range between zero and just 1/3 to 1/2 the retail price, minus administrative fees of their choice. In addition, the amendment caps the size of renewable energy systems to just residential systems under 10 kw. Schools, churches, and small businesses would be left in limbo on buyback just as they are today. For example, the Shallowater High School — in a suburb of Lubbock — installed a 150 kW and wanted to go bigger.

Proponents of the Gallego amendment argue this compromise is the best policy that can be passed at this point, despite the fact that the House State Affairs committee already passed the original (good) Gallego bill and the full Texas Senate passed nearly identical language in SB 545. They also argue that, even if the buyback rate is lousy, at least consumers who serviced by electric coops could finally get some renumeration. However, coop customers would be covered under Rep. Solomons’ HB 1866, which has already passed the House and will soon be considered by the Senate.

We can do much better than this TXU-written policy.