Mississippi’s 11 nonprofit electric cooperatives can’t stand a new net metering rule passed by the Mississippi Public Service Commission in December requiring them to fork over more money to power-generating customers.
The co-ops have asked the PSC for a rehearing, but critics say utilities just don’t like having full control over the power grid and its prices.
Through net metering, utility customers with rooftop solar or other power generation capabilities are paid by their utility for power they send back to the grid. Mississippi is the 45th state with a rule governing the practice, which determines how much utilities must compensate customers.
South Mississippi Electric Power Association CEO Jim Compton told Mississippi Watchdog that forcing utilities to pay customers more for the power they send back imposes added cost onto customers without rooftop solar.
“Rooftop solar is not very efficient and it requires a large rate or subsidy to become affordable,” Compton said. “We don’t think it’s right to pay that subsidy because our customers that don’t have rooftop solar end up paying for it. Is our goal to support rooftop solar or to increase the use of solar energy?”
The rule approved by the PSC would authorize homeowners with rooftop solar to sell their excess power back to the grid for 7 to 7.5 cents per kilowatt hour, a compromise from the 10 cents per kilowatt hour desired by solar advocates and the 4 to 4.5 cents per kilowatt hour proposed by investor-owned utility Entergy. For the first three years of the net metering program, there will be an “adder” of 2.5 cents per kilowatt hour, which the rule says will be replaced once “actual benefits” are determined.
SMEPA and the other cooperatives argue in their rehearing request the net metering rule constitutes rate regulation. The cooperatives’ rates are governed by either the Federal Energy Regulatory Commission or the Tennessee Valley Authority for those receiving power from the TVA, not the PSC.
SMEPA and TVA already have net metering policies. SMEPA is expanding its solar power generation capability, buying power from a 52-megawatt solar facility in Lamar County run by Origis Energy. SMEPA has also built smaller solar facilities, 100 kilowatts or less, controlled by five of its cooperatives — Coahoma, Coast, Delta, Southern Pine and Singing River.
“The rooftop solar industry is a very powerful industry,” Compton said. “They’re well-financed, Solar City for example, and they’ve got support politically from the current president and administration. People certainly have the right to put those systems on their roofs and we’ll buy from them. We’re not questioning that.
“If I can go out here and do a 52-megawatt, 480-acre facility for a certain price, what is the reasoning for us to pay twice that to someone who puts rooftop solar in? Having these large facilities is the most efficient way to increase the amount of renewables in our portfolio.”
Jeff Cantin, president of Gulf States Renewable Energy Association, a New Orleans-based renewable trade association, said Mississippi cooperatives are actively trying to discourage customers from installing rooftop solar.
“They want to pretend these costs are burdening someone else,” Cantin said. “There’s no one with solar panels with a zero bill. Everyone pays something toward the grid. The rule itself is a pretty steep compromise.
“What’s coming out with the co-ops is how they’ve not had to answer to anyone in the past. The commission is trying to say people should be able to generate their own energy and shouldn’t be punished for it. The co-ops don’t like not having complete control over their customers.”
Homeowners can receive a federal residential renewable energy credit of 30 percent on solar, fuel cell, wind or geothermal projects, but that program will come to a close at the end of 2016 unless Congress reauthorizes it. The Mississippi tax code has no incentives for state homeowners on renewable energy, but it does offer a series of tax credits for manufacturers of components used to generate renewable energy.
The state’s 11 nonprofit power cooperatives serve more than 420,000 household and business customers in 55 of the state’s 82 counties.