Regulators uphold fees on solar, OK increase

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.