Florida man takes FPL to court, alleging the utility acts like a net metering regulator

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A group of Florida homeowners petitioned the Florida Public Service Commission (FPSC) challenging Florida Power and Light’s (FPL) net metering approval process. The petition was denied by the FPSC, and one of the petitioners has challenged the decision before the Florida Supreme Court, claiming that the utility corporation has been allowed by the FPSC to act as a regulatory body and has failed to promote residential solar energy systems and net metering.

The argument boils down into three main points of contention:

  1. By enforcing an unadopted corporate policy to limit net metering system size based on 115% past annual consumption, FPL acts as a regulatory agency with the open approval of the FPSC.
  2. The FPSC is overstepping its authority by granting utility corporations the discretionary authority to impose insurance policies with a covarage of up to 1 million dollar on net-metered solar system larger than 10 kW in capacity.
  3. FPSC enforces an “As-Available-Energy” compensation scheme for surplus solar electricity generation beyond self consumption. This practice dismisses the undeniable costs associated with greenhouse gas emissions.

System overbuild

The complaint originated when one of the petitioners, Achim Ginsberg-Klemmt, was informed by FPL that a solar system of his, a system he designed and installed himself, would have its net metering approval withdrawn due to “system oversizing.”

According to FPL’s annual consumption policy, “Systems should not be sized so large that energy produced by the renewable generator would be expected to exceed 115% of the customer’s annual kWh consumption.” Ginsberg-Klemmt asserted that the tenants at his rental property would be purchasing electric vehicles, and that the corresponding charging infrastructure would easily meet the demand. FPL withdrew the net-metering approval for this residence based on the 115% guideline, but the solar system has continued to generate solar electricity without FPL’s approval for over a year, and, according to Ginsberg-Klemmt, has been participating in net metering.

A third solar system which Ginsberg-Klemmt had planned but had not yet constructed was denied based on the same corporate FPL guidelines, so he ironically proposed electric heaters to heat the outside air at the site in order to generate the necessary electricity demand needed in order to pass the officially endorsed net-meter permitting requirements.

“It’s not a rule,” Ginsberg-Klemmt told pv magazine. “If it were a rule, it would be officially ratified, the PSC would have had to vote on it, it’s not a rule. Basically, the 115%, that’s the FPL board coming up with a guideline and nobody complains… The fact that everybody kind of accepts FPL as an authority is ridiculous. What do they have to say about my installation? It’s my home, they’re not authorized to tell me anything.”

Ginsberg-Klemmt continued to insist that FPL should not be allowed to limit the size of solar systems as long as they are sized below 90% of the permitted electric panel power rating.

Insurance issues

Additionally, FPL customers who wish to install and operate solar systems which are adequately sized to power their electric cars and cover most or all of their electricity needs, 10KW to 100KW, must select the “Tier 2” category for their interconnect agreements. Concurrently, these homeowners have to add liability insurance to the economic equation of their Tier 2 solar systems, which inevitably drags the economical break-even point further into the future.

Here, Ginsberg-Klemmt argues that FPSC’s Rule 25-6.065 (5)(e) grants Florida utilities the descretion to enforce a costly and unnecessary liability insurance requirement on customers who wish to install robust solar net metering systems.

“This liability insurance is so expensive that people cave in and just build an under 10 kW system because it’s a pain in the neck to build a bigger system. That’s the real problem, they discourage people from [building] big solar systems.”

He argues that bigger solar systems have smaller relative fixed costs than smaller systems, which allows for relatively quicker payback times, while also supporting other possible infrastructure investments, like EV chargers. By adding the cost of insurance, these improved economics are wiped out. In Ginsberg-Klemmt’s case, the insurance on his home system would cost roughly $677 annually.

Surplus generation compensation

Ginsberg-Klemmt points out that larger solar installations can send more energy to the grid when generating surplus electricity, helping to offset the system’s considerable cost. However, beyond the self-consumption limit, surplus electricity is currently credited under an “As-Available-Energy” rate of 2.5¢/kWh.

This is not an FPL-specific policy, it’s one employed by numerous utilities to prevent homeowners from installing systems wildly oversized to their homes in order to make significant net metering profits once the system has paid for itself. Arguments against this policy say that it is a non-issue, as the net metering rates paid by the utility will still be lower than the avoided cost incurred if the utility were to install a comparable system.

However, for Ginsberg-Klemmt, the issue is not that the credit is lowered, it’s that the credit is so low, in conjunction with the insurance fees that accompany a large installation, that it does little to offset the insurance costs and less to incentivize homeowners to install a system over 10 kW.

In this issue, Ginsberg-Klemmt argues that the “As-Available” rate should take into account greenhouse gas emissions costs and the high value of solar electricity generated during on-peak hours. In Florida, peak generation can extend closer to peak demand than in other areas of the country, where the sun starts to set and generation starts to die down just before peak demand. It’s because of this, Ginsberg-Klemmt attests, that solar is inherently more valuable, regardless of if it is excess — as it is eliminating the greenhouse gas emissions that fossil generation would produce at the same time.