The Battle to Sell “Green” Power to Utilities Comes to Jackson

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Sen. David Baria, D-Bay St. Louis, said opposition and advocates of net metering should reach some middle ground on their arguments.

by Adam Lynch
November 16, 2009

Mississippians who generate their own electricity through green technologies should be able to sell any excess back to power companies, Julia O'Neal told a legislative panel this morning. O'Neal said the process of net metering allows individuals to sell excess electricity generated through the use of solar panels or windmill generators, back to power companies at market rates. Net metering is necessary to offset customers' investment in personal power generation, she said.

"Solar panels are expensive to buy, though the price will drop as more people buy them and they are more mass-produced. But right now, the way Mississippi Power refuses to do net metering, it really isn't worth the customers investment to install solar panels or anything like that because they won't get a return on their investment," O'Neal said.

Mississippi lawmakers heard a variety of arguments between Mississippi Power Company and net metering advocates like O'Neal during a joint legislative hearing on energy efficient homes and buildings today. The legislative panel consisted solely of Democrats including Sens. David Baria, D-Bay St. Louis and Debbie Dawkins, D-Pass Christian, along with Rep. Dirk Dedeaux, D-Perkinston. Dedeaux said he had invited numerous Republicans to participate.

Mississippi Power Company Manager Larry Vogt told the panel that Mississippi Power customers would be subsidizing their customers' investment in solar panels if they bought the power back from those customers at the same rate they charged.

"When customers buy power, they're using our whole power delivery infrastructure, including power production, transmission, distribution substations and service lines, and other things. That price we charge them includes charges for generation and delivery and maintenance, but the energy we buy from the customers only avoids our cost for fuel. We would have to transfer the costs for transmission onto our other customers who don't have solar panels," Vogt said.

Mississippi Power says a solar-panel equipped customer with a current monthly bill of $130 could see their bill reduced to about $25 with net metering. But the company also says that its $76 of fixed costs must then be transferred to customers who do not have solar panels or some form of personal power generation.

Instead, Mississippi Power advocated for a process known as "net billing," in which the power company inflates the cost of the power the solar-using customer buys from the power company. The company claims the higher rate essentially charges the customer for the fixed transmission and infrastructure costs. Under net billing, a $130 monthly bill would be reduced to $102 under Mississippi Power's net billing proposal.

Deveraux Galloway of Solar Power of Mississippi, which sells and installs solar panels, says that kind of cost offset is not enough to entice enough people to invest in solar installation.

"It's not enough to offset it because Mississippi does not offer any other incentives," Galloway told the Jackson Free Press. "Suppose we install $24,000 worth of solar panels to power a four-bedroom home, which uses 1200 kilowatts a month. You can write off 30 percent of the total cost thanks to a federal incentive, but with a savings of only $30 a month it would take about 30 years to see a return on your costs," Galloway said.

He added that other power companies are also trying to discourage solar investment by charging customers $50 a month for net metering services, virtually eliminating any savings customers would derive from installing solar panels.

"There's no question that they want to kill the effort to produce more power producers in the state, but I'm still confident that in the end, we will prevail," Galloway said.

Baria said he wished advocates and opposition to net metering could come to some form of agreement on the middle ground.

"This is the future for the country," Baria said. "We should get ahead on it."

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