How solar energy works: The simplified version
To the surprise of many, the Kentucky legislature suddenly revived and pushed to final passage late Thursday a controversial bill sought by major utility companies that could make rooftop solar panels less lucrative for homeowners.
Senate Bill 100, sponsored by state Sen. Brandon Smith, R-Hazard, will require the Kentucky Public Service Commission to determine the rates at which residential solar customers are compensated by utilities for selling their excess power back to the grid, a practice known as “net metering.” Currently, utilities must pay the same rate for excess power as they charge residential customers.
After 10 p.m., Republican House leaders announced they wanted to abandon a compromise measure the House adopted Feb. 15 in order to protect Kentucky’s nascent solar power industry.
In February, House members from both parties insisted on the solar-friendly changes before they would pass the net metering bill. Among the changes: When deciding rates, the PSC would have to consider the benefits of solar power as well as the costs, and the solar industry would be allowed to intervene in rate cases.
Later, the bill stalled between the House and Senate, which would not accept the House’s amendment or negotiate the differences in a conference committee, House leaders said. Smith, the senator who sponsored the bill, did not return a call Friday seeking comment.
The PSC recently warned in a letter that the changes proposed in the House amendment were “fatally flawed,” state Rep. Jim Gooch, R-Providence, told the House Thursday night. After a lengthy debate, the House voted 50-to-38 to recede from its amendment and allow the original, utilities-friendly Senate bill to head to Gov. Matt Bevin’s desk for his signature or veto.
The Kentucky Solar Industries Association immediately called on Bevin to veto the bill.
“Monopolies won today,” the association said in a statement. “The action that was taken is a huge blow to the many people employed by small, locally owned businesses in the solar industry. It is a blow to every Kentuckian who wants to choose solar as his or her energy provider.”
The governor’s office did not respond to a request for comment on the bill Friday.
The state’s utility companies have paid several hundred thousand dollars in political donations to state elected officials in recent years, either through political action committees or individual contributions, according to the Kentucky Registry of Election Finance. The PAC run by LG&E and Kentucky Utilities alone has given about $100,000 since January 2017, including maximum donations to the legislative caucuses and chamber leaders, according to KREF.
Several House members angrily protested Thursday, saying that GOP chamber leaders promised them the House would not advance the net metering bill unless it contained many of the protections in the amendment they approved in February. Now, in the final hours of the session, they said, the original bill was being rushed to the governor.
“I’m very sad tonight. I feel like promises that were made to my caucus were not kept,” said state Rep. Joni Jenkins, D-Shively.
House Speaker David Osborne, R-Prospect, told reporters after the night’s session that his chamber was compelled to proceed with the original Senate bill. Having reached an impasse with the Senate on negotiations, the sponsor of the House amendment, state Rep. Jim DuPlessis, “was willing to step away from his amendment,” Osborne said.
In a phone interview Friday, DuPlessis disputed that he agreed to “step away” from his amendment. In fact, he voted against the House dropping his amendment, he noted.
“I felt like we could have gotten it worked out in a conference committee, but the other side just wasn’t willing to do it,” DuPlessis said.
However, DuPlessis, R-Elizabethtown, said he’s not finished with net metering.
He said he will meet this summer with representatives of the solar power industry and utilities companies to craft a compromise that balances the high costs of installing solar panels with the “legitimate concerns” of utilities, such as the so-called “duck curve,” the daily timing imbalance between peak demand and renewable energy production. Another bill will follow in the 2020 legislative session, he said.
By the time the PSC is gearing up to hear solar power rate cases, the legislature could have a new template in place that satisfies everyone, more or less, DuPlessis said.
“It can be a win-win-win situation. We just have to get there,” DuPlessis said. “There were compromises that could have been found here where neither the utilities nor the solar guys would have been hurt. That’s the message I’d like to leave. There were compromises that could have been found, and that’s where we need to turn now.”