Bill to to allow charges on solar users passes Kentucky House

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The path for HB 227 has been long and arduous. The bill to allow utilities to impose discriminatory charges on their customers who adopt solar and cap development made its way slowly to the floor of the Kentucky House, where it was approved this week and will move on to the Senate.

“This is, from a solar industry perspective, a wholly punitive bill; there are no gains here,” said Matthew Partymiller of Solar Energy Solutions LLC. This has been the consensus among solar experts and opponents of the bill, who say HB 227 would cause great harm to the already small solar industry in the state.

The bill would allow state utilities to seek “cost recovery” from their customers who adopt solar while also introducing a hard cap on systemwide PV deployment at one percent, which under current state law is already a point at which solar-affected utilities can request a net metering stall.

With the tariffs on solar imports recently imposed by the Trump administration, these measures would make both buying into and recouping an investment in solar, which is now likely larger than it was before, a harder sell for Kentucky residents. Their investment would be greater, and their returns, weaker. Moreover, the bill’s language is not particularly empowering to state regulators. “We’re concerned that the bill’s language ties the hands of the PSC in a cost-recovery sense,” said Partymiller.

Should the bill be enacted, in its current form, it might allow “for fixed charges, changes to compensation rate, or something of that form,” said Andy McDonald, Kentucky Solar Energy Society, in providing for said cost recovery. While existing solar customers have a theoretical grandfather clause within the bill to continue their net metering for 25 years, McDonald said this provision is ambiguous at best.

“This is very much the bill to kill this young industry before it grows,” said Partymiller, pertaining to the state’s relatively small solar presence. Critics say the bill would create great uncertainty in the state’s solar industry and dissuade new customers, while holding up the state’s PSCs in one legal battle after another. According to McDonald, utilities could hit the PSC with a long series of legal quandaries in seeking cost recovery from this bill. With 23 different utilities in the state, that means the bill could “open up potentially 23 different rate cases,” he said.

The bill has been promoted by Natural Resources and Energy Committee chairman Jim Gooch, using the cost-shift myth, which is especially fraught in Kentucky, a state that has a relatively small solar output, meaning that it would be even more unlikely than most to reach the ten percent of annual electricity generation from solar under which Lawrence Berkeley Labs estimates that a cost shift could occur. According to Sean Gallagher, vice president of state affairs at SEIA, “HB 227 is a solution in search of a problem.”

Despite the small solar presence, Kentucky utilities have put a lot into the promotion of this bill. According to Kentuckians for the Commonwealth (KFTC), the Consumer Energy Alliance (which is housed in a Washington, DC-based lobbying firm backed by major utilities and oil and gas companies) has funded a front group called “Kentuckians for Solar Fairness” to support the bill. According to Partymiller, the amount of money spent by state utilities in support of this bill has been in the “tens of thousands, likely hundreds of thousands.”

However, the bill has not been an easy sell in the House, amidst reported failures to vote by the Natural Resources and Energy Committee, changes to that committee’s membership that KFTC attributed to Gooch not having enough votes to pass the bill (Gooch said February’s three added members were to better represent Western Kentucky, while House Speaker David Osborne was quoted in Louisville’s Courier-Journal as saying the reason was Gooch “having a hard time getting a quorum”), and more than two dozen amendments, none reflected in the version of the bill approved by the House this Wednesday.

Whatever the case, this bill took much reworking before a vote was finally cast Tuesday by the Natural Resources and Energy Committee, after which it was approved by a vote in the House Wednesday. That passage itself was contentious, with what the Courier-Journal reported as “about two hours of debate,” followed by a narrow 49-45 vote. It will go to the Senate, but its trek has not been easy, and the opposition has been bipartisan.

Given the array of forces both for an against HB 227, the future is uncertain for the bill, and thus for Kentucky solar, which could deal a damaging blow to residential solar in the state. Both Partymiller and McDonald suggested that amendments to the bill could be a mitigating factor in what goes through to the Senate, but with less than nine working days left in the state’s legislative session, anything could happen.

 

Correction: This article was corrected at 11:42 AM EST on March 16. An earlier version stated that there were only five days left in the current legislative session, but has been corrected as there are nine. We regret the error.