Net-Metering Advocates Push for Support | Jackson Free Press | Jackson, MS

Net-Metering Advocates Push for Support

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Net-metering advocates like James Wade, president and CEO of Alternate Energy Solutions, says the state should not be one of the last to embrace the policy.

Advocates for net metering pressed legislators this morning to submit and pass laws during this legislative session making the consumer-based electricity policy a reality in Mississippi.

Consumers who own some form of renewable energy facility, such as solar panels or a wind generator, could use met metering to sell any excess energy they produce back to the power companies. Mississippi does not have a net-metering policy, despite federal laws requiring one. Under net-metering policies enacted in other states, power companies "pay" their customers connected to the power grid through equivalent retail credit. Without a net-metering policy, individual power generators are paid considerably less their excess energy than the rate the power companies charge for electricity.

"If you have a renewable energy generating product like solar, net metering allows you to get full retail value. So if you're charged 13.9-cents a watt to get full retail value the utility companies would have to pay you 13.9-cents a watt," said James Wade, President and CEO of renewable energy installation company Alternate Energy Solutions. "Mississippi is one of the few states that don't use it, and we don't need to be the last to adopt it."

Power companies oppose net metering, however, arguing at a 2009 legislative hearing that the equal exchange rate would actually cost them more money in the end. Mississippi Power Company Manager Larry Vogt told a legislative panel last year that most Mississippi Power customers would be virtually subsidizing the investment of customers with solar panels.

"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 still 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.

The state government is currently ducking federal requirements by not enacting net metering, meaning the policy could end up being adopted through the court system, if an energy-generating customer decided to sue his power supplier. Sen., David Baria, D-Bay St. Louis, discouraged the idea of using the court system to install the policy, however.

"This kind of thing should be created through legislative change, not the courts," said Baria, who has argued in favor of net metering in the past.

Any bill he or other senators try to submit will likely hit a brick wall in the Senate Public Utilities Committee, however. Committee chairman Nolan Mettetal has killed net-metering bills in previous sessions.

Jagdeo Singh, CEO of alternative energy design and manufacturing company Alliance Electric Construction, is working to make solar construction cheaper, and argues that-owners can more easily afford the solar upgrades to their homes with enough incentives through electricity savings. Singh embraces the renewable energy movement, and has personally financed the installation of numerous electric-vehicle charging stations in and around Laurel, Miss., in expectation of incoming EVs like the Chevrolet Volt. One "fill-up" at a charging station costs about $4.

Singh says the time is right for net metering to be a reality in Mississippi, and that the state is fighting an unchangeable tide in discouraging the policy: "This kind of thing will become the law of the land in the next few years, whether or not (legislators) want it," Singh said. "It will pave the way for Mississippi to ride the wave of new investment in renewable energy in the coming years."

Previous Comments

ID
154892
Comment

I am glad to see this being covered. I am absolutely, positively for net metering to be a reality for all of us, but its public advocates need to change one aspect of their request -- they should not demand that the utility pay them retail rates, but wholesale rates instead. Think about it this way -- if you were an apple farmer, could you walk into Kroger and expect them to exchange them at a retail rate for a box of cereal? No, because the essence of their business is buying apples at wholesale and then selling them at retail, and using that difference to pay the expenses of running the business and make a profit. When you eat your own apples that you grow, you SAVE the equivalent of the retail price on them, but once you start introducing them to the market via a market maker (like a grocery store or a consolidated utility) you should expect to be PAID wholesale. That is the way our economic system works. I don't understand how utilities could provide serious opposition to this request if they are asked to pay wholesale rates.

Author
Leland Jr
Date
2010-01-07T14:43:35-06:00
ID
154893
Comment

Leland, would you e-mail me at ladd@jacksonfreepress.com, please? I have a question for you.

Author
DonnaLadd
Date
2010-01-07T15:33:37-06:00
ID
154901
Comment

I am very glad to see it being covered, also. Leland Jr., I haven't thought through the details on this, but your reasoning makes sense. We need to enact laws that lay the groundwork for our becoming, as individuals and businesses, energy independent. I don't know how to get from where we are to energy independence, but it seems to be that this is one of the start buttons.

Author
J.T.
Date
2010-01-08T00:09:38-06:00
ID
154913
Comment

I've got to agree with Leland Jr. Utilities are required to purchase fuel or electricity at the lowest reliable rate. Retail net metering, first is not reliable. Sometimes my solar panels produce more than I need, sometimes they won't. But you can't build a statewide grid energy disbursment plan based on sometimes Mr. Jones produces a little extra solar power. Second, the buy back should be at the lowest possible wholesale rate. That's what we demand the utilities do when buying electricity from other companies. That should also be the rule in buying electricity from a "home" generator. Third, as Leland Jr. said, there are built in costs besides electricity: maintenance, construction, regulations, taxes, etc that go into rates. Those costs would keep the power flowing both ways. Unless a person with home solar panels wants to be responsible for the construction and maintenance cost to keep themselves connected to the grid, then they have to pay for them in some way. Net billing makes home generation work fairly for the generator, the utility, and the generator's neighbors.

Author
Curley
Date
2010-01-08T11:21:46-06:00
ID
154916
Comment

I don't believe that it's an either/or proposition. In other words, there's surely a lot of space between "pay the lowest possible price" and "pay the highest possible price," and there are probably also other alternatives not defined by that narrow band. Australia, for example, pays householders four times the retail rate. It's fine to say that electric companies have costs that need to be covered, but we should thoroughly examine how how many of those costs (construction of the grid, for example) are already paid for. How much profit to shareholders is built into utility costs? How much of the cost would remain the same regardless of where (and for how much) electricity is bought and sold? One of the things net metering would accomplish is a shift from big centralized power sources to smaller, more efficient sources. Of course the power companies are fighting it: Net metering could cut into their profits. On the other hand, America must make definitive moves to wean itself from unsustainable, dirty and expensive sources of power, and paying lowest wholesale prices for electricity produced through green energy sources does not give any incentives to people and companies who want to invest in the technologies. The power companies want to define the conversation through their profit margins, but Americans will lose if we let them. America is way behind the international curve on renewable energy sources.

Author
Ronni_Mott
Date
2010-01-08T14:06:06-06:00
ID
154923
Comment

Ronni, good points, some of the things that seem important are green incentives, a level table between big energy and Americans for dialogue, laws that are implementable (e.g., I have heard somewhere about safety issues of the energy going back up the grid from the consumer, so arriving at details of costs is a good start, AND lawmakers need to keep the whole subject before it in all respects here-on-out. I read the other day that there are no plants in the United States producing solar panels. If that is true, to my feeble brain, that sounds crazy. We are bringing in a plant in Tunica to build pipes for oil activity. Wouldn't if be phenomenal if MS could have the First plant producing solar "stuff."

Author
J.T.
Date
2010-01-08T16:45:34-06:00
ID
154927
Comment

As regulated monopolies (which is a combo of two of the most power-laden words in modern capitalism), very little is likely to cut into utilities' profit margins since those profits, assuming a certain level of performance is achieved by the utility, are effectively guaranteed by the government. Requiring incentives to be paid means that someone has to pay them - and it will be the ratepayers, one way or another. Adding a fee to everyone's bill is the direct way to get incentive money - but deciding how to divvy that up is gnarly. Reducing the profit margin would make the cost of capital go up (and utilities are capital-intensive businesses), meaning that, yep, the ratepayers would pay more through a higher base rate. (We have government employees who are tasked with watching all the components of that base rate, and so we *shouldn't* be paying for fully depreciated equipment today or in the future.) As we all know, there is no free lunch. You can't pay incentives without getting them from somewhere, and with a regulated monopoly in the mix there's no way to avoid all of us going dutch for lunch. Maybe the closest thing to a free lunch might be a guarantee on how much you can make from selling your lunch?

Author
Leland Jr
Date
2010-01-08T21:57:21-06:00
ID
154928
Comment

I'm confused, Leland Jr. with the free lunch terminology? Maybe I just didn't read the blogs carefully. I agree with your assessment of the power and protection of the utility companies. As we all know, however, changing times chane times. Even the strongest eventually have to bow under certain circumstances, if no more than to lean over enough to sit down at the table and talk. I am ready to be emancipated from foreign oil. I don't think I'm alone. Energy production and usage is one area of our lives that I think is wide open for huge change, though I admit that the only reason we aren't all using solar and wind power right now is that the energy companies don't own the sun and the wind.

Author
J.T.
Date
2010-01-08T22:34:04-06:00
ID
154938
Comment

I'm with J.T. on this, Leland Jr.—and, I assume, most Americans. If utilities are guaranteed profits, as you say, it's time for a new game plan. Other states have implemented net metering effectively, so why not Mississippi? I imagine utilities used the same arguments elsewhere and lost. We need to deal with our foreign oil and dirty energy addictions, and that means moving toward green and renewable energy sources. Stopping subsidies that once made sense must be part of that plan. "We've always done it that way" is a lousy excuse for any policy, and just because the big energy companies want to continue with the status quo doesn't mean that America needs to keep doing it their way forever. Gnarly doesn't mean impossible to untangle (or cut loose). Maybe we can take a lesson from Alexander the Great and the Gordian knot. Personally, I think big energy companies have done enough damage and have had a pretty good run. It's time to move into a new era.

Author
Ronni_Mott
Date
2010-01-11T13:58:36-06:00
ID
154958
Comment

A perspective - at The Green Project in New Orleans, we had 20KVA of solar-electric panels working well before Katrina, and restored afterward. We did not have (nor require) storage capacity. At the time, the public utility did not have a plan to purchase power from ordinary customers, but we rarely had surplus power. Sunday afternoons in good weather and high sun angle was about the only time that we really had much to sell back. Our building offered enough relatively low cost and low risk roof area to comfortably accommodate up to about 30KVA. Since we were on a commercial account with a fairly steep peak load provision, solar paid for itself in a few years by producing the most power at the same hour that we consumed the most. Peak demand imposes high fixed and variable costs on the utility. Point of use, distrubuted solar-electric plants, such as ours, reduce utility variable costs at once. When a built up area becomes dense with solar-electric, peak power demand for the area drops, and, long term, distribution fixed costs also go down as new plant replaces old. What would be a useful and fair allocation of gains from distributed, privately owned plants such as installed at The Green Project? For a residential user with a fixed cost per KW, or an account with a low peak power charge, the pay back is typically much slower than we experienced. This is a disincentive for both parties. The utility has good records of demand and routinely estimates the maximum demand likely, plus a safe margin. With a given amount of solar installed, max demand might change to a time of reduced solar output, say a cold winter night, or a cloudy, hot day. Whether customer storage was present would also figure in. I am not sure when utility demand would peak with extensive distributed solar, but every customer would want to have power available from the utility at all times, of course. It's feasible to analyze historical demand, even meter by meter, using weather service local data and power demand histories. I've done it for a large and complex public use facility in New Orleans. From there, it is a straight forward task to recommend solar plant size for a customer based on use. This has the advantage of minimizing cost to each party. A more complicated model would would optimize over a region that includes concentrated use, such as a city downtown. This is still within the capability of utility planners, who have developed engineering, operating, and financial models. I've not touched on financing and fair ROI, just a few, practical operational and economic basics. With appropriate planning, solar-electric can be a big help economically, and, of course, environmentally. Ours held up well and worked reliably, even when restored after Katrina.

Author
dreynolds
Date
2010-01-11T20:13:19-06:00

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