Mississippi, one of the last states that have not created a net metering policy, might soon have a rule created. On Tuesday, the state Public Service Commission (PSC) voted unanimously to issue rules that will create a framework allowing customers to install rooftop solar and sell excess electricity to their utility company. Public comments are due by July 1, 2015, a hearing will be held, followed by the issuing of final guidelines.
This is the latest development in Mississippi that spans back to 2010 after the PSC opened a docket to explore the policy. In 2014, Commissioner Lynn Posey ordered an investigation study on the economic impact of net metering. Synapse Energy Economics, a research and consulting firm, assisted the PSC and completed the investigation in October. The Synapse study found that the benefits of implementing net metering for solar in the state outweigh the costs in all but scenario. Here are other highlights from the report:
- “Distributed solar has the potential to result in a downward pressure on rates.”
- “Generating from rooftop solar panels in Mississippi will most likely displace generation from the state’s peaking resources – oil and natural gas combustion turbines.”
- “Distributed solar is expected to avoid costs associated with energy generation costs, future capacity investments, line losses over the transmission and distribution system, future investments in the transmission and distribution system, environmental compliance costs, and costs associated with risk.”
These findings are similar to what other independent reports have recently concluded. Another cost-benefit study of net metering in Missouri released in 2015 found net metering is a net benefit for utility customers. Independent studies in Vermont, New York, Texas, and Nevada have all come to the same conclusion.
However, as Utility Dive points out, the report warns that the utilities in the state, including the two investor-owned utilities Entergy Mississippi and Southern Company’s Mississippi Power, distributed solar would decrease revenue and therefore, the value of solar in Mississippi should be calculated. Earlier this month, the Maine Public Utilities Commission released a study that gives a quantitative value of solar produced in the state. The report found that the value of solar power generated is 33 cents/kWh; this is a significant difference from the 13 cents/kWh customers in Maine who have solar panels receive as a credit today.
Entergy Mississippi filed comments against a net metering policy that would credit ratepayers at the retail rate, and not the avoided cost amount. However, the Southern Company subsidiary, Mississippi Power, is unopposed because it reached a settlement with the state chapter of the Sierra Club to diversify its power generation. In the agreement, the Sierra Club would cease its legal opposition to the Kemper coal gasification power plant, and Mississippi Power would remain unopposed to solar net metering.
The issue over revenues is exactly why utility companies (and their trade association the Edison Electric Institute) are waging a campaign against net metering across the country. In fact, documents presented to the EEI Board of Directors in 2012 show the detailed plan to convince lawmakers, regulators, and consumers that distributed rooftop solar is unfair to other ratepayers. EEI and utilities want to squash the solar energy market and continue their entrenchment of the energy monopoly. In an EEI presentation given to utility company representatives, EEI framed their anti-solar plan with the question, “How do you grow earnings in this environment?“
The industry has responded to the increase of customers participating in net metering programs by working with the corporate-funded bill mill American Legislative Exchange Council to create a model resolution calling for the repeal or weakening of net metering laws. Additionally, EEI has now begun to lobby municipal leaders at ALEC’s new organization, the American City County Exchange, over net metering.
The utility industry has also been asking state regulators for an increase in fixed-charges, which according to James Tong and Jon Wellinghoff would allow utilities to have guaranteed profits and push all risk of the utility’s investments onto ratepayers.