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October 21, 2019 12:15pm

GLI encourages PSC to reassess value of excess energy from net-metered customers

Last week, GLI joined other business organizations in the Commonwealth to encourage the Kentucky Public Service Commission (PSC) to reevaluate how utilities should value excess power generated by net-metered customers. Thanks to the passage of Senate Bill 100 in the 2019 regular session—which modernized Kentucky’s outdated net-metering laws—the PSC now has the authority to set compensation rates for net-metering credits. In a letter to the PSC, GLI, the Kentucky Chamber, Commerce Lexington, and the Northern Kentucky Chamber of Commerce urged Commissioners to begin the process of reassessing current values in order to protect the Commonwealth’s competitive advantage when it comes to affordable energy for businesses.

The Chambers believe now is the appropriate time to reevaluate how utilities should value excess power generated by net metering customers. Nearly two decades ago, the net metering statute was adopted to help the emerging solar industry in Kentucky. Solar was an expensive option, and customers would generate excess power they couldn’t use, which created a need to export electricity to the utility’s grid. The net metering law in Kentucky was established to provide a mechanism for dealing with excess power, while also subsidizing the expensive investment.

Today, solar is a more affordable option that is quickly growing in popularity. According to the Solar Energy Industries Association, the industry saw record growth during the first quarter of 2019, and the association expects solar photovoltaic capacity to double over the next five years. However, a policy adopted to spur investment has now created a cost shift that increases each day with new solar installations. Without new tariffs, utilities must credit the exported power at the retail rate, which equates to a 300% premium relative to other sources of power. Utilities collect this premium from customers such as businesses. However, according to the Solar Energy Industry Association, the price of solar in Kentucky has fallen 34 percent just in the past five years.

Every dollar a business spends on utility bills is a dollar not spent on payroll, business expansion, or philanthropic activities. While energy costs are a part of doing business in any state, outdated energy policy should not force companies to pay more than they have to. — Joint letter to the Kentucky PSC from GLI, KY Chamber of Commerce, Commerce Lexington, and the Northern Kentucky Chamber of Commerce. 

Read the full letter here.