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Kentucky's Divisive Net Metering Bill Nearing Final Passage

A Senate committee approved net metering legislation with tweaks benefiting solar-powered households on Thursday, but the changes were not enough to sway renewable energy advocates.

The changes to House Bill 227 do little to affect the bill's central aim, which would require state regulators to set rates for the solar power that customers feed back into the electricity grid.

Bill advocates say it’s a fair compromise that updates a 2004 law. That law requires electric utilities to give Kentucky households that produce renewable energy credits for their excess power. Those credits  can be used on future power bills.

But opponents say the latest bill will force out residential solar and let utility companies "corner the market on the sun."

The Senate Committee on Natural Resources and Energy passed a substitute version of the measure Thursday afternoon. Republican Chairman Jared Carpenter revised the measure after meeting with stakeholders from the solar industry.

The revisions closed a loophole for new solar-powered households that would be grandfathered in under the legislation. It also adjusted how state regulators would determine rates and changed language to avoid possible tax liabilities for residential solar customers.

“Those changes have taken a tremendous amount of time in drafting and rewriting and making sure we are doing what we want to do,” Carpenter said. “And that’s protecting our utility companies that provide resources, we want to protect our solar providers… and the most important thing is we want to continue to provide the ability to be a low energy producing-cost state.”

While explaining his vote in favor of the bill, Republican Sen. Ernie Harris said the legislation attempts to balance competing interests.

“The one thing that I trust is the ability of a neutral agency to make a good decision. That’s why I think it’s so important we have the Public Service Commission involved in this,” he said. “Whether they include the benefits or not, I will trust them.”

Tom FitzGerald, director of the Kentucky Resources Council, said the measure doesn’t allow the Public Service Commission to consider the benefits that solar-powered households offer — benefits like making the grid more efficient and resilient.

Other solar advocates said the measure creates an inefficient regulatory process and could still jeopardize customers that should be grandfathered in under the bill.

Jamie Clark, president of Synergy Home, a solar installer, was among those who asked committee chair Carpenter to drop the bill and bring it back next session after meeting with stakeholders.

“The problem is the beginning of the bill was so far to the bad, that even the middle is still bad enough to kill the solar industry in Kentucky,” Clark said.

One of the state’s former top environmental regulators, who helped to pass the 2004 net metering law, came out against the measure Tuesday.

LaJuana Wilcher, a former secretary of Kentucky's Environmental and Public Protection Cabinet under Republican Gov. Ernie Fletcher, said the measure would penalize homeowners with solar panels by requiring them to pay full price for electricity they buy, but credit them less for what they produce.

“Every time solar panels are installed in Kentucky, utilities need a little less pollution control equipment, which costs billions of dollars for ratepayers in the state. Every case of asthma that is avoided has the potential to save taxpayers money in medical costs,” she wrote in an open letter.

This post has been updated.


Ryan Van Velzer is the Kentucky Public Radio Managing Editor. Email Ryan at rvanvelzer@lpm.org.

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