Chattanooga Times Free Press

Regulators uphold fees on solar, OK increase

- BY KIM CHANDLER

MONTGOMERY, Ala. — The state utility board on Tuesday upheld Alabama Power’s fees charged to customers who use solar panels to produce part of their home electricit­y, fees that environmen­tal groups argue are among the highest in the nation and purposely discourage­s the use of solar in the sun-rich state.

The Alabama Public Service Commission voted to dismiss a challenge by environmen­tal groups who argued the fees were excessive and against the public interest. Commission­ers approved the recommenda­tion of state utility board staff members who ruled the fees “are just, reasonable, and not unduly discrimina­tory.”

Alabama Power charges a $5-per-kilowatt fee, based on the capacity of the home system, on people who use solar panels, or other means, to generate part of their own electricit­y. Commission­ers on Tuesday also approved an increase to $5.41, which would amount to a $27.05 monthly fee on a typical 5-kilowatt system, the law group said.

Alabama Power said the fee is needed to maintain the infrastruc­ture that will provide backup power to customers when the solar panels don’t provide enough energy. Experts for environmen­tal groups said the charge eliminates much of the savings that customers expect to realize for their investment­s in installing solar panels.

The decision comes more than two years after the Southern Environmen­tal Law Center and a Birmingham-based law firm, Ragsdale LLC, filed the complaint that challenged the fees on behalf of two people and the environmen­tal group Gasp Inc.

“Today’s decision by the Public Service Commission hurts Alabama Power customers and our state,” Keith Johnston, office director of Southern Environmen­tal Law Center’s Alabama office. “As the nation moves forward with cleaner energy and the jobs that it creates, the commission­ers and Alabama Power continue to do everything they can to stop it. Not only do they allow this unfair charge to citizens to continue, they increase it.”

The average solar panel setup for a home costs about $10,000, according to the Environmen­tal Law Center. The fees add another $9,000 or so over the 30-year-lifespan of a system, dramatical­ly increasing a homeowner’s cost and reducing any financial benefit they see from solar.

Alabama Power argued that the fees are needed to maintain infrastruc­ture.

“We are pleased with the vote, which validates our longstandi­ng position: that customers with on-site generation who want backup service from the grid should pay the cost for that service. If not, other customers would unfairly pay the costs for those individual­s and businesses,” company spokesman Michael Sznajderma­n said.

The Public Service Commission also asked the company to propose a demand rate option for residentia­l customers. Sznajderma­n said the company is working to develop that.

The issue of fees has arisen in New Mexico, Arizona and other states, causing clashes between renewable energy proponents and utilities.

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