MONTGOMERY, Ala. (AP) — Environmental groups on Thursday challenged Alabama Power’s charges on those who use solar panels to produce part of their home electricity, a fee the utility maintains is necessary to cover providing backup power.
The Alabama Public Service Commission held a hearing on the petition to abolish the fee. Commissioners heard both the utility giant’s defense of the fee and advocates’ contention that it is unprecedented and purposely discourages the use of solar panels in a sun-rich state. Commissioners will likely not rule until next year.
Alabama Power charges a $5-per-kilowatt fee, based on the capacity of the home system, on people who use solar panels, or other means, to generate part of their own electricity. That amounts to a $25 monthly fee on a typical 5-kilowatt system.
An energy expert testifying on behalf of petitioners said the charge “eliminates much of the savings that customers expect to realize for their investments” in installing solar panels.
“The charges are one of the principle reasons sun-rich Alabama trails other states in solar development,” Karl R. Rábago, of the Pace Energy and Climate Center, testified. “I know of no other investor-owned utility that assesses a charge this punitive for backup service.”
Alabama Power said the fee is charged to maintain infrastructure to provide backup power when the solar panels don't provide enough energy. The utility is asking to increase the charge to $5.41.
“If they don’t produce, I have to stand ready to serve them,” Alabama Power pricing manager Natalie Dean testified at the hearing.
Dean was asked by an opposing attorney about the lack of a similar fee charged by Alabama Power’s their sister company, Georgia Power. She replied that is a different jurisdiction and the fee is based on calculations in Alabama.
“The bottom line of this is there is cost to providing this backup service,” Alabama Power spokesman Michael Sznajderman told reporters. Sznajderman noted that fee applies to all means of home power generation, not just solar.
Fewer than 200 Alabama Power customers pay the fee.
The Southern Environmental Law Center and a Birmingham-based law firm, Ragsdale LLC, filed the complaint on behalf of two people and Gasp Inc., which advocates energy production that reduces air pollution.
The average solar panel setup for a home costs about $10,000, according to the environmental law center. The fees add another $9,000 or so over the 30-year-lifespan of a system, dramatically increasing a homeowner’s cost and reducing any financial benefit they see from solar, the law group said.
“This is a huge hurdle to residential rooftop solar in the state. It’s really curtailing its use and it’s holding Alabama back,” said Keith Johnston, managing attorney for the Southern Environmental Law Center’s Birmingham office.
Teresa Thorne, 65, had a four-kilowatt system installed on her roof in Blount County, Alabama. She told The Associated Press earlier this month that fee, “cuts my savings in half.”
The two-hour hearing grew testy at times. Solar energy proponents packed the meeting with many wearing “Let It Shine” stickers. At least three audience members were ejected for recording or livestreaming the proceeding with their phones.
The ejected audience members included Laura Casey, a Democratic candidate for PSC president, and Kari Powell, who ran last year. Both said they believed they were within their rights to record the meeting under state law. The PSC contended that recording was not allowed.
Casey said supporting solar “makes sense for Alabama.”
“It’s economically important. It’s environmentally important. Also from a homeland security standpoint, to not have these massive grids that are vulnerable to attack.”