Ohio’s largest utility pushes to slash rooftop solar compensation

The Citizens Utility Board of Ohio, Interstate Gas Supply, the Retail Energy Supply Association, Solar United Neighbors, the Ohio Environmental Council, and the Environmental Law & Policy Center have all filed formal replies with the PUCO, urging regulators to reject AEP’s arguments and to keep the current net-metering rules in place for all ratepayers.

AEP’s Ohio media relations office wrote via email, ​“Under net metering, a portion of the distribution-related charges are essentially shifted to other customers when the charges are calculated only for the net portion of the electricity delivered,” because infrastructure costs ​“are designed to be spread across the customers the system was built to serve.”

The company did not respond to Canary Media’s request for data showing how it or other regulated utilities would be hurt by net metering for customers who pick competitive energy suppliers or take part in community aggregation programs. The company has come after net metering before — and ultimately lost.

More than a decade ago, AEP took its arguments to limit net metering to the Ohio Supreme Court. The court ultimately dismissed that case after the PUCO released new rules that generally favored the company. A year after hearing lawyers’ arguments urging it to reconsider those rules, however, the commission changed course.

The current policy, adopted in December 2018, requires regulated utilities to compensate all rooftop solar customers for excess power, but it does not allow credit for distribution charges or for any avoided capacity charges.

AEP’s gambit to change the rules now surprised advocates for renewable energy, such as Mryia Williams, Ohio program director for Solar United Neighbors. ​“The PUCO staff had already concluded that net-metering rules are working as intended, and they didn’t think any changes needed to be made,” she said, referring to a Nov. 5 administrative law judge’s order in the rules docket.

The utility has not offered any data or other detailed assessment to justify its proposed changes, Williams said. And many rooftop solar owners relied on the current regulations when calculating whether to make the investment. ​“Everybody is just wanting to make sure that what’s already been promised is continued,” she said.

Plus, rooftop solar customers already pay for equipment to feed excess power to the utility. Levying distribution costs for electricity that customers wind up feeding back to the grid would, in effect, charge them for supplying the utility with distributed energy. Other energy suppliers don’t have to pay that expense, so it shouldn’t be something utilities can charge residents for either, said Nat Ziegler, manager of community solutions for Power a Clean Future Ohio.

Moreover, reducing net-metering compensation and limiting who can get it would discourage more people from adding rooftop solar, said Joe Flarida, executive director for Power a Clean Future Ohio.

“More generation on the grid will help limit the amount of price increases we’re seeing,” Flarida explained. ​“Certainly, if we can encourage more distributed energy, that would offset the amount of added power we need on the grid.”

Power a Clean Future Ohio is among the hundreds of groups and individuals who filed public comments with the PUCO, in addition to the formal party filings. That level of response represents a big change from a decade ago, Rutschilling said, noting increased interest in rooftop solar over the past few years.

People’s electricity bills have already jumped dramatically as grid operators like PJM have sounded the alarm about needing more electricity to meet demand from data centers, increased electrification, and other factors. And results of the most recent auction will almost certainly increase costs even more.

A bill introduced last fall would declare it state policy to ​“ensure affordable, reliable, and clean energy security,” with ​“clean energy” specified as meaning electricity from nuclear or natural gas, with no reference at all to renewables. But any new nuclear power requires years of review, and even with expedited permitting, Rutschilling noted, orders for new natural gas plant turbines have lag times of several years.

“We need as much generation as possible,” he said. ​“We need to have things like distributed energy.”