Categories: Politics

State Lawmakers Consider Changes To Small Renewable Energy Reimbursements

Kentucky lawmakers are once again considering changing the state’s net metering rules, which allow people to sell electric utilities the extra energy generated from household solar panels or windmills.

Currently, electric utilities are required to buy back excess energy produced by customers at the same price sold to customers. Kentucky lawmakers considered a bill earlier this year that would have allowed utilities to get approval to buy back the energy at lower rates.

The bill didn’t make it out of committee, but lawmakers are still considering elements of the proposal.

Solar advocates say the legislation would slow down growth in the industry, but electric utilities say the current scheme unfairly compensates solar households for putting energy back onto the power grid.

Indiana recently passed similar net metering changes that allow utilities to buy back energy at lower wholesale rates and charge a fee to small-scale renewable energy generators.

Sen. Brandt Hershman, majority floor leader for the Indiana State Senate, said despite the relatively small number of solar or wind generating households, the current scheme shifts costs onto other energy consumers.

“How long is it going to be before the number of people who do participate in net metering have a distortive impact on the wholesale price of power or the price of power that your individual utility is paying and where does that cost get shifted,” Hershman said during a presentation to Kentucky’s Interim Joint Committee on Natural Resources and Energy.

More than 1,000 Indiana businesses and households participate in that state’s net metering program, which gives a financial credit for sending excess energy back to the electric grid.

There are about 1,000 net metering households in Kentucky.

Rep. Jim Wayne, a Democrat from Louisville, said that the state shouldn’t be looking to lower reimbursement rates intended to incentivize renewable energy.

“It almost sounds like a sledgehammer attacking an ant here,” said Wayne, who added that he uses solar panels and participates in the net metering program.

“I don’t understand why this push for a major shift in a policy that is working for these 1,000 people and is certainly not making a dent in the utility’s economics.”

Adam Benshoff, with utility advocate Edison Electric Institute, said net metering households and businesses are using utilities’ infrastructure for free, thereby driving up costs for others.

“The other customers — the non-private solar customers — are being forced to purchase that at that higher rate and it’s going to have to be passed on to everyone else,” Benshoff said.

Renewable advocates are worried that net metering changes could make it harder for solar and windmill owners to get returns on their investments.

Matt Partymiller with Lexington-based Solar Energy Solutions said since solar currently represents a tenth of a percent of the energy market, the current net metering scheme is fair.

“As the market continues to expand, that becomes less the case,” Partymiller said. “But we’re a long way from that in Kentucky. And we just hate to introduce those regulatory barriers and hurdles so early in this process.”

A net metering bill has not yet been proposed for the upcoming legislative session, which begins on January 2, but the issue is expected to come up again.

Ryland Barton

Ryland Barton is the Capitol bureau chief for Kentucky Public Radio. He's covered politics and state government for NPR member stations KWBU in Waco and KUT in Austin. He has a bachelor's degree from the University of Chicago and a master's degree in journalism from the University of Texas. He grew up in Lexington.

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