Wisconsin utility seeks stricter net metering policy

Solar power advocates are contending that Wisconsin Public Service Corporation discourages investment in renewable energy by the low rates it pays individual producers and reductions it has proposed on solar installation capacity.

The Green Bay-based utility counters that it wants to price electricity appropriately, so consumers without solar installations aren’t subsidizing those who have them.

The issue is coming to a head as WPSC is seeking more restrictive solar energy policies in a rate case pending before the Wisconsin Public Service Commission.

Jim Kerbel of Amherst has been installing solar electric systems for 33 years, but blames WPS polices for diminishing his sales to WPS customers. Meanwhile, WE Energies and Alliant Energy customers continue to buy systems from him, as their polices result in better cost recovery for systems that can cost thousands of dollars.

“It’s hard to sell a system to a (WPSC) customer … You have to size it to produce just what the customer consumes (in electricity),” Kerbel said.

Craig Buttke, co-owner of Northwind Renewable Energy in Stevens Point, agreed with his competitor, Kerbel, that consumers view WPSC’s policies as a disincentive to installing solar electric systems.

“(WPSC) gets the benefits from the green energy produced and local distribution of the power, production during peak periods that lows demand for new generation … but you can’t get your money back on the rates they pay,” he said.

In an arrangement known as net metering, owners of solar electric systems sell power to utilities in excess of what they use. WPSC pays the retail rate, about 12 cents per kilowatt hour, to owners of systems installed before March 2011 and the wholesale rate of about 3 cents per kilowatt hour for systems installed after March 2011. However, the 12 cent rate will expired in 10 years, which also chafes system owners who want it to reflect the time to recover the cost of their systems.

WPS’ own records show that fewer customers are seeking agreements that allow them to sell power to the utility. In 2011, it reached a high point of agreements with 52 residential customers, but only three have been recorded this year to date. Agreements with commercial customers experienced a similar drop off.

The lower buy back rate lengthens the pay back period for solar system owners, which already can take 9-14 years.

“People just frown at that. (Solar) is still a better investment than putting your money in the bank,” said Kerbel.

Solar systems generate more electricity between April and October, when days are longer, and less during winter months, when electrical demand can be higher.

WPSC is the only major utility in the state that applies net metering on a monthly basis, where customers “true up” the difference each month between what they consume and generate.

Other utilities “true up” on an annual basis, offsetting power produced throughout the year against consumption, which also improves the cash flow of solar systems, according to advocates who want WPSC to return to an annual “true up.”

“The smaller the system, the more expensive per kilowatt hour it is to produce electricity,” said Michael Vickerman, RENEW Wisconsin’s policy director. “The question is, why are customers of one utility receiving such a raw deal when you can go to Xcel or Alliant or MG&E, all which calculate net metering on a 12-month basis?”

The PSC first authorized monthly net metering for another Wisconsin utility and also authorized it for WPSC in a rate case two years ago, said Kerry Spees, a WPSC spokesperson.

Net metering in general overpays the solar producer when it involves the 12 cent retail rate, said Dennis Derricks, a WPSC vice president.

“To the degree we pay more for power to the (solar) resident or farm customer, we have to make it up from others. In fairness to all customers, we don’t want them to be subsidizing other customers,” Derricks said.

WPSC can obtain electric power for about 3 cents per kwh and adds a few cents per kwh to solar generated power to reflect the cost savings of not having to transmit it distances. However, the utility still needs an infrastructure in place to send power to a home or farm with a solar installation when it isn’t producing power, Derricks said.

Net metering shifts infrastructure costs to those who don’t have solar systems, including lower-income individuals not able to pay the significant upfront costs. Spees views solar installation as a “reverse Robin Hood” situation where only those who can afford the system reap its benefits.

WPS’ critics oppose the utility’s request to limit net metering to 20kwh systems, down from the current 100kwh capacity.

A 100kwh system makes sense for large dairy operations and other businesses, said Vickerman, so they can produce as much energy as they consume. Instead, WPSC wants systems larger than 20kwh net metered and credited at the wholesale, not retail, rate for the electricity they generate.

WPSC undervalues the benefits of solar-generated power where electricity is consumed where it’s produced, said Vickerman. The cost savings of not having to transmit power over long distances from power plant to consumer are considerable. In addition, solar facilities don’t need the costly pollution-control equipment coal-fired plants require.

Solar facilities also add to the value of a residence, he said, as people will pay more for a house that generates some of the power it needs.

Richard Stephens and Mary Bratz, who installed a 5kwh system at their Almond residence, wrote the PSC that WPS’ proposals would have a negative impact on economic development.

“We know that many of these small (renewable energy) businesses in the state are already suffering because of the economic recession and a seemingly negative attitude toward wind and solar by segments of state government. Any disincentives to (photovoltaic) and wind systems in the state would further depress business and likely result in job losses.

“(WPSC) has the right to remain profitable, but should not be an impediment to the development of renewable energy. We ask the PSC to take this into account when considering (WPSC’s) application.

Karen Dostal is the environmental education coordinator for Stevens Point Area Schools, has a 3.2 kwh solar system on her Custer residence, and worked to get the 140-solar panel array installed in the Boston School Forest near Plover.

She also said WPSC needs to promote clean energy and make it more cost effective for residents and businesses to install solar systems.

“As a nation, we need to look at other energy sources than fossil fuels. If the incentives are there people will invest … We’re turning the wrong direction in not investing in solar energy, and as a result people aren’t being employed in that industry,” she said.

Asked whom WPSC’s policies hurt most, Kerbel replied, “the children.”

“They’re the ones who are going to have to put up with the carbon and mercury pollution if (WPSC) continues to rely on coal-fire generation to the extent they are. They want to block solar power. It’s so obvious. They don’t want competition; if you’re a monopoly, why let others own their own systems,” he said.

The PSC will take public comments on WPSC’s rate case until Sept. 27.

Source: Wausau Daily Herald


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